SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date earliest event reported) July 30, 1999
--------------
PENNSYLVANIA ELECTRIC COMPANY
-----------------------------
(Exact Name of Registrant as Specified in Charter)
PENNSYLVANIA 1-3522 25-0718085
- --------------------------------------------------------------------------------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
2800 Pottsville Pike, Reading, PA 19640-001
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 610-929-3601
------------
<PAGE>
Item 5. Other Events.
- ------- -------------
On July 30, 1999, Pennsylvania Electric Company (the "Company") entered
into a Selling Agency Agreement with Salomon Smith Barney Inc. and Banc of
America Securities LLC, as agents (the "Agents"), providing for the issuance and
sale of up to $275,000,000 aggregate principal amount of Medium Term Notes,
Series E. Reference is made to the Company's Prospectus dated July 30, 1999, for
further information regarding the offering, including the use of proceeds.
Item 7. Financial Statements, Pro Forma Financial
- ------- -----------------------------------------
Information and Exhibits.
-------------------------
(c) Exhibits
(1) Selling Agency Agreement, dated July 30, 1999, between
Pennsylvania Electric Company and Salomon Smith Barney Inc.,
and Banc of America Securities LLC, as agents.
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED HEREUNTO DULY AUTHORIZED.
Pennsylvania Electric Company
By: /s/ T. G. Howson
--------------------------
T.G.Howson
Vice President and Treasurer
Date: August 5, 1999
Exhibit (c) (1)
Pennsylvania Electric Company
$275,000,000 Medium-Term Notes
Selling Agency Agreement
July 30, 1999
New York, New York
Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Banc of America Securities LLC
BankAmerica Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255-0001
Ladies and Gentlemen:
Pennsylvania Electric Company, a Pennsylvania corporation (the
"Company"), confirms its agreement with each of you with respect to the issue
and sale by the Company of up to $275,000,000 aggregate principal amount of its
Medium-Term Notes (the "Notes"). The Notes will be issued under the Company's
Senior Note Indenture, dated as of April 1, 1999, between the Company and United
States Trust Company of New York, as trustee (the "Trustee"), as heretofore
supplemented and as it is to be further supplemented by one or more Company
orders relating to the Notes, said Indenture, as heretofore supplemented and as
it is to be further supplemented, being hereinafter referred to as the
"Indenture". The Notes will be issued in minimum denominations of $1,000 and
integral multiples of $1,000, will be issued only in fully registered form and
will have the annual interest rates, maturities and, if appropriate, other terms
set forth in a supplement to the Prospectus referred to below. The Notes will be
issued, and the terms thereof established, in accordance with the Indenture and,
in the case of Notes sold pursuant to Section 2(a) hereof, the Administrative
Procedures attached hereto as Exhibit A (the "Procedures"). The Procedures may
only be amended by written agreement of the Company and you.
<PAGE>
For the purposes of this Agreement: the term "Agent" shall refer to
either of you acting solely in the capacity as agent for the Company pursuant to
Section 2(a) and not as principal (collectively, the "Agents"); the term
"Purchaser" shall refer to one of you acting solely as principal pursuant to
Section 2(b) and not as agent; the term "you" shall refer to you collectively
whether at any time any of you are acting in both such capacities or in either
such capacity; the term "Effective Date" shall mean the later of (i) each date
and time that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective and (ii) the date of the filing
with the Securities and Exchange Commission (the "Commission") of the Company's
most recent Annual Report on Form 10-K; the term "Execution Time" shall mean the
date and time that this Agreement is executed and delivered by the parties
hereto; the term "Basic Prospectus" shall mean the form of basic prospectus
relating to the Securities contained in the Registration Statement at the
Effective Date; the term "Prospectus" shall mean the Basic Prospectus as
supplemented by the Prospectus Supplement; the term "Registration Statement"
shall mean the registration statement referred to in paragraph 1(a) below,
including incorporated documents, exhibits and financial statements, as amended
at the Execution Time; and the terms "Rule 415" and "Rule 424" refer to such
rules under the Act.
Any reference herein to the Registration Statement, the Basic
Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (the "Exchange Act") on or
before the Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, the Prospectus Supplement or the Prospectus, as the case may
be; and any reference herein to the terms "amend", "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be, deemed to be incorporated
therein by reference.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, you as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended, and the rules and regulations
thereunder (the "Act"), and has filed with the Commission a registration
<PAGE>
statement on such Form (Registration Numbers: 333-62295, 333-62295-01 and
333-62295-02), including the Basic Prospectus, which has become effective,
for the registration under the Act of, among other things, $725,000,000
aggregate amount of various securities, including the Notes (the
"Securities"). Such Registration Statement, as it may be amended at the
date of this Agreement, meets the requirements set forth in Rule
415(a)(1)(ix) or (x) under the Act and complies in all other material
respects with said Rule. The Company has included in such Registration
Statement, or has filed or will file with the Commission pursuant to the
applicable paragraph of Rule 424(b) under the Act, a supplement to the
Basic Prospectus, relating to the Notes and the plan of distribution
thereof (the "Prospectus Supplement"). In connection with the sale of
Notes, the Company proposes to file with the Commission pursuant to the
applicable paragraph of Rule 424(b) under the Act further supplements to
the Basic Prospectus and the Prospectus Supplement specifying the interest
rates, maturity dates, interest payment dates, redemption provisions, if
any, and, if appropriate, other terms of the Notes sold pursuant hereto or
the offering thereof.
(b) As of the Execution Time, on the Effective Date, on the date
when any supplement to the Prospectus is filed with the Commission, as of
the date of any Terms Agreement (as hereinafter defined) and at the date
of delivery by the Company of any Notes sold hereunder (a "Closing Date"),
(i) the Registration Statement, as amended as of any such time, and the
Prospectus, as supplemented as of any such time, and the Indenture will
comply in all material respects with the applicable requirements of the
Act and the Trust Indenture Act of 1939, as amended, and the rules and
regulations thereunder (the "Trust Indenture Act"), and the documents
incorporated therein by reference fully complied or will fully comply in
all material respects with the Exchange Act; (ii) the Registration
Statement, as amended as of any such time, did not or will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and (iii) the Prospectus, as supplemented as of
any such time, will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations
or warranties as to (i) that part of the Registration Statement which
shall constitute the Statement of Eligibility and
<PAGE>
Qualification (Form T-1) under the Trust Indenture Act of the Trustee or
(ii) the information contained in or omitted from the Registration
Statement or the Prospectus (or any supplement thereto) in reliance upon
and in conformity with information furnished in writing to the Company by
you specifically for use in connection with the preparation of the
Registration Statement or the Prospectus (or any supplement thereto).
(c) Neither the issue and sale of any of the Notes nor the
consummation of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a breach or
violation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to,
(i) the charter or by-laws of the Company or any of its subsidiaries, (ii)
the terms of any indenture, contract, lease mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of its subsidiaries is
a party or bound or to which its or their property is subject, or (iii)
any statute, law, rule, regulation, judgment, order or decree applicable
to the Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its subsidiaries or any of
its or their properties.
(d) The Notes and the Indenture conform in all material respects to
the description thereof contained in the Prospectus (and any supplements
thereto).
(e) The Indenture has been duly authorized, executed and delivered,
has been qualified under the Trust Indenture Act, and constitutes a legal,
valid and binding instrument enforceable against the Company in accordance
with its terms (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium
or other laws affecting creditors' rights generally from time to time in
effect, and to general principles of equity); and when the Notes have been
duly executed by the Company, authenticated by the Trustee and payment
therefor has been made by the purchaser thereof, they will be valid and
binding obligations of the Company in accordance with their terms and
entitled to the benefits provided by the Indenture.
(f) The Registration Statement has become effective under the Act;
any required filing of the
<PAGE>
Prospectus, and any supplements thereto with respect to the Notes,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement has been issued, and no
proceedings for that purpose have been instituted or threatened, and the
Registration Statement and the Prospectus comply as to form in all
material respects with the applicable requirements of the Act and the
Trust Indenture Act, and the Exchange Act with respect to the documents
incorporated by reference, and the respective rules thereunder;
(g) This Agreement has been duly authorized, executed and delivered
by the Company;
(h) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries incorporated by reference in the
Prospectus and the Registration Statement present fairly in all material
respects the financial condition, results of operations and cash flows of
the Company as of the dates and, for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except as
otherwise noted therein).
(i) The Company is duly incorporated and is validly subsisting as a
corporation in good standing under the laws of the Commonwealth of
Pennsylvania with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business as
described in the Prospectus (and any supplements thereto), and is duly
qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such qualification, or
is subject to no material liability or disability by reason of the failure
to be so qualified in any such jurisdiction.
(j) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and the Trust Indenture Act, and the approval of the Pennsylvania
Public Utility Commission (the "PaPUC"), and such as may be required under
the blue sky laws of any jurisdiction.
(k) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its
<PAGE>
subsidiaries or its or their property is pending or, to the best knowledge
of the Company, threatened that (i) could reasonably be expected to have a
material adverse effect on the Company's performance of this Agreement or
the consummation of any of the transactions contemplated hereby or (ii)
could reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), business prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth or incorporated by reference in or
contemplated in the Prospectus (exclusive of any supplement thereto); and
there is no franchise, contract or other document of a character required
to be described in the Registration Statement or Prospectus, or to be
filed as an exhibit thereto, which is not described or filed as required;
(l) Since the date of the most recent financial statements included
in the Prospectus, there has been no material adverse effect on the
condition (financial or otherwise), business prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus.
2. Appointment of Agents; Solicitation by the Agents of Offers to
Purchase; Sales of Notes to a Purchaser. (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 of the Agents agrees, as agent
of the Company, to use its reasonable best efforts to solicit offers to purchase
the Notes from the Company upon the terms and conditions set forth in the
Prospectus (and any supplement thereto) and in the Procedures; provided,
however, that each of the Agents in its sole discretion can suspend from time to
time its efforts in offering for sale, and soliciting purchases of, the Notes.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Notes. Upon receipt of instructions from
the Company, the Agents will forthwith suspend solicitation of offers to
purchase Notes from the Company until such time as the Company has advised them
that such
<PAGE>
solicitation may be resumed. Notwithstanding the foregoing, if, at any time and
from time to time during the term of this Agreement, the Company delivers to
each of you a written notification of its decision to suspend the solicitation
of offers to purchase the Notes hereunder, and if no Purchaser shall then hold
any Notes as principal purchased pursuant to a Terms Agreement, then during the
period of any such suspension, the Company shall be relieved of its obligation
to provide to you the certificates, opinions and letters required pursuant to
Sections 4(j), 4(k) and 4(l) until such time as the Company has advised any of
you that such solicitation may be resumed, at which time the Company shall
provide to you such certificates, opinions and letters, dated as of that time,
and at which time such obligations shall resume.
The Company agrees to pay each Agent a commission on the Closing
Date with respect to each sale of Notes by the Company as a result of a
solicitation made by such Agent, in an amount equal to that percentage specified
in Schedule I hereto of the aggregate principal amount of the Notes sold by the
Company through such Agent. Such commission shall be payable as specified in the
Procedures.
Subject to the provisions of this Section and to the Procedures,
offers for the purchase of Notes may be solicited by an Agent, as agent for the
Company, at such times and in such amounts as such Agent deems advisable. The
Company may from time to time offer Notes for sale otherwise than through an
Agent; provided, however, that so long as this Agreement shall be in effect the
Company shall not solicit or accept offers to purchase Notes through any agent
other than an Agent.
(b) Subject to the terms and conditions stated herein, whenever the
Company and one of you determines that the Company shall sell Notes directly to
such of you as Purchaser, each such sale of Notes shall be made in accordance
with the terms of this Agreement and any supplemental agreement relating thereto
between the Company and the Purchaser. Each such supplemental agreement, which
may be oral (confirmed in writing) or written (substantially in the form of
Exhibit B) is herein referred to as a "Terms Agreement". The Purchaser's
commitment to purchase Notes pursuant to any Terms Agreement shall be deemed to
have been made on the basis of the representations and warranties of the Company
herein contained and shall be subject to the terms and conditions herein set
forth. Each Terms Agreement shall describe the Notes to be purchased by the
Purchaser pursuant thereto, specify the principal amount of such Notes, the
price to be paid to the Company for such Notes, the rate at which interest will
be paid on the Notes, the Closing Date for such Notes, the place of delivery of
the Notes and payment therefor, the method of payment and any
<PAGE>
modification of the requirements for the delivery of the opinions of counsel,
the certificates from the Company or its officers, and the letter from the
Company's independent public accountants, pursuant to Section 6(b). Such Terms
Agreement shall also specify the period of time referred to in Section 4(m).
Each Purchaser may utilize a selling or dealer group and may reallow a portion
of the discount or commission payable to such Purchaser to other dealers or
purchasers.
3. Offering and Sale of Notes. Each Agent and the Company agree to
perform the respective duties and obligations specifically provided to be
performed by them in the Procedures.
4. Agreements. The Company agrees with you that:
(a) Prior to the termination of the offering of the Notes, the
Company will not file any amendment of the Registration Statement or
supplement to the Prospectus (except for a supplement relating to an
offering of Securities other than the Notes) unless the Company has
furnished to Thelen Reid & Priest LLP, counsel for the Agents, a copy for
their review prior to filing and will not file such proposed amendment or
supplement to which such counsel reasonably objects, in writing. Subject
to the foregoing sentence, the Company will cause each supplement to the
Prospectus to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to each of you of such filing. The Company
will promptly advise each of you (i) when the Prospectus, and any
supplement thereto, shall have been filed with the Commission pursuant to
Rule 424(b), (ii) when, prior to the termination of the offering of the
Notes, any amendment of the Registration Statement shall have been filed
or become effective, (iii) of any request by the Commission for any
amendment of the Registration Statement or supplement to the Prospectus or
for any additional information, (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose and
(v) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Notes for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such stop
order and, if issued, to obtain as soon as possible the withdrawal
thereof.
<PAGE>
(b) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it shall be necessary to amend
the Registration Statement or to supplement the Prospectus to comply with
the Act or the Exchange Act or the respective rules thereunder, the
Company promptly will (i) notify each of you to suspend solicitation of
offers to purchase Notes (and, if so notified by the Company, each of you
shall forthwith suspend such solicitation and cease using the Prospectus
as then supplemented), (ii) prepare and file with the Commission, subject
to the first sentence of paragraph (a) of this Section 4, an amendment or
supplement which will correct such statement or omission or effect such
compliance and (iii) supply any supplemented Prospectus to each of you in
such quantities as you may reasonably request. If such amendment or
supplement, and any documents and certificates furnished to each of you
pursuant to paragraph (g) of this Section 4 in connection with the
preparation or filing of such amendment or supplement are reasonably
satisfactory in all respects to counsel for the Agents, each of you will,
upon the filing of such amendment or supplement with the Commission and
upon the effectiveness of any amendment to the Registration Statement, if
such an amendment is required, resume your obligation to solicit offers to
purchase Notes hereunder.
(c) The Company will make generally available to its security
holders as soon as practicable following each calendar quarter, commencing
with the next quarter beginning after the date of this Agreement and
ending with the fifth calendar quarter after the end of the calendar
quarter in which the last sale of Notes effected pursuant hereto occurs,
an earning statement (in form complying with the provisions of Section
11(a) of the Act and which need not be certified by independent public
accountants unless required by the Act) covering a twelve-month period
ending at the close of the next preceding calendar quarter, which earning
statement shall be in the same detail as the statement of income
incorporated by reference in the Registration Statement.
(d) The Company will furnish to each of you and your counsel,
without charge, copies of the Registration Statement (including exhibits
thereto) and, so long as delivery of a prospectus may be required by the
Act, as many copies of the Prospectus
<PAGE>
and any supplement thereto as you may reasonably request.
(e) The Company will file all reports, and amendments thereto,
required to be filed by the Company with the Commission pursuant to
Sections 13, 14 or 15(d) of the Exchange Act subsequent to the effective
date of the Registration Statement and, so long as delivery of a
prospectus may be required by the Act, the Company will furnish to each of
you and your counsel, without charge, as many copies of such reports and
amendments (excluding exhibits) as you may reasonably request.
(f) The Company will arrange for the qualification of the Notes for
sale under the laws of such jurisdictions as you may designate, will
maintain such qualifications in effect so long as required for the
distribution of the Notes, and will arrange for the determination of the
legality of the Notes for purchase by institutional investors; provided,
that the Company shall not be required to qualify as a foreign corporation
or file a general consent to service of process in any jurisdiction.
(g) The Company shall furnish to each of you such information,
documents, and certificates of officers of the Company relating to the
business, operations and affairs of the Company, the Registration
Statement, the Prospectus, and any amendments thereof or supplements
thereto, the Indenture, the Notes, this Agreement, the Procedures and the
performance by the Company and you of its and your respective obligations
hereunder and thereunder as you may from time to time and at any time
prior to the termination of this Agreement reasonably request.
(h) The Company shall, whether or not any sale of the Notes is
consummated, (i) pay all expenses incident to the performance of its
obligations under this Agreement, including the fees and disbursements of
its accountants and counsel, the cost of printing or other production and
delivery of the Registration Statement, the Prospectus, all amendments
thereof and supplements thereto, the Indenture, this Agreement and all
other documents relating to the offering, the cost of preparing, printing,
packaging and delivering the Notes, the fees and disbursements, including
fees of counsel, incurred in compliance with Section 4(f) (such amount not
to exceed $7,500), the fees and disbursements of the Trustee and the fees
of any agency that rates the Notes, (ii) reimburse you for all
out-of-pocket expenses (including without limitation advertising expenses)
reasonably incurred by you in
<PAGE>
connection with this Agreement and (iii) pay the reasonable fees and
expenses of your counsel incurred in connection with this Agreement.
(i) Each acceptance by the Company of an offer to purchase Notes
will be deemed to be a reconfirmation to you of the representations and
warranties of the Company contained in this Agreement.
(j) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by (i) an amendment or supplement
relating to any offering of Securities other than the Notes or (ii) an
amendment or supplement providing solely for the specification of or a
change in the maturity dates, the interest rates, the issuance prices or
other similar terms of any Notes sold pursuant hereto or (iii) the filing
of Forms 8-K solely for the purpose of filing exhibits pursuant to Item
601 of Regulation S-K), and on each Closing Date, the Company will deliver
or cause to be delivered promptly to you a certificate of the Company,
signed by the President or any Vice President and the principal financial
or accounting officer of the Company, dated the date of the effectiveness
of such amendment or the date of the filing of such supplement, or such
Closing Date, as the case may be, in form reasonably satisfactory to you,
of the same tenor as the certificate referred to in Section 5(f) but
modified to relate to the date of filing of such amendment or supplement
or such Closing Date, as the case may be, and to the Registration
Statement and the Prospectus as amended and supplemented to the time of
the effectiveness of such amendment or the filing of such supplement or
such Closing Date, as the case may be.
(k) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement (i)
relating to any offering of Securities other than the Notes, (ii)
providing solely for the specification of or a change in the maturity
dates, the interest rates, the issuance prices or other similar terms of
any Notes sold pursuant hereto, or (iii) setting forth or incorporating by
reference financial statements or other information as of and for a fiscal
quarter or year end or in a Form 8-K, unless, in the case of clause (iii)
above, in the reasonable judgment of any of you, such financial statements
or other information are of such a nature that opinions of counsel should
be furnished), and on each Closing Date, the Company shall furnish or
cause to be furnished promptly to each of you written opinions of counsel
of the Company satisfactory to you, dated the date of the
<PAGE>
effectiveness of such amendment or the date of the filing of such
supplement or such Closing Date, as the case may be, in forms satisfactory
to each of you, of the same tenor as the opinions referred to in Sections
5(b), 5(c) and 5(d), but, in each case, modified to relate to the date of
filing of such amendment or supplement or such Closing Date, as the case
may be, and to the Registration Statement and the Prospectus as amended
and supplemented to the time of the effectiveness of such amendment or the
filing of such supplement or such Closing Date, as the case may be, or, in
lieu of such opinions, each counsel last furnishing any such opinion to
you may furnish you with a letter to the effect that you may rely on such
counsel's last opinion to the same extent as though it were dated the date
of such letter authorizing reliance (except that statements in such last
opinion will be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of such Closing Date).
(l) Each time that the Registration Statement or the Prospectus is
amended or supplemented to set forth or incorporate by reference financial
information, the Company shall cause its independent accountants promptly
to furnish each of you a letter, dated the date of the effectiveness of
such amendment or the date of the filing of such supplement, in form
satisfactory to each of you, of the same tenor as the letter referred to
in Section 5(g) with such changes as may be necessary to reflect the
amended and supplemental financial information included or incorporated by
reference in the Registration Statement and the Prospectus, as amended or
supplemented to the date of such letter; provided, however, that, if the
Registration Statement or the Prospectus is amended or supplemented solely
to include or incorporate by reference financial information as of and for
a fiscal quarter, the Company's independent accountants may limit the
scope of such letter, which shall be satisfactory in form to each of you,
to the unaudited financial statements, and any other information of an
accounting, financial or statistical nature included in such amendment or
supplement, unless, in the reasonable judgment of any of you, such letter
should cover other information or changes in specified financial statement
line items.
(m) During the period, if any, specified in any Terms Agreement, the
Company shall not, without the prior consent of the Purchaser thereunder,
issue or announce the proposed issuance of any of its debt securities,
including Notes, with terms substantially
<PAGE>
similar to the Notes being purchased pursuant to such Terms Agreement.
5. Conditions to the Obligations of the Agents. The obligations of
each Agent to solicit offers to purchase the Notes shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time, on the Effective Date, when any
supplement to the Prospectus is filed with the Commission and as of each Closing
Date, to the accuracy of the statements of the Company made in any certificates
delivered pursuant to the provisions hereof, to the performance and observance
by the Company of all covenants, obligations and agreements herein contained on
its part to be performed and observed and to the following additional conditions
precedent:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such supplement,
shall have been filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Company shall have furnished to each Agent the opinion of
Berlack, Israels & Liberman LLP, counsel to the Company, dated the
Execution Time, to the effect that:
(i) The Company is duly incorporated and is validly subsisting
as a corporation in good standing under the laws of the Commonwealth
of Pennsylvania, with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and conduct
its business as described in the Prospectus (and any supplements
thereto), and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction;
(ii) The Notes and the Indenture conform as to legal matters to
the statements concerning them contained in the Prospectus (and any
supplements thereto);
(iii) The Indenture has been duly authorized, executed and
delivered, has been qualified under the Trust Indenture Act, and
constitutes a legal,
<PAGE>
valid and binding instrument enforceable against the Company in
accordance with its terms (subject, as to enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or other laws affecting creditors' rights
generally from time to time in effect, and to general principles of
equity); and when the Notes have been duly executed by the Company,
authenticated by the Trustee and payment therefor has been made by
the purchaser thereof, they will be valid and binding obligations of
the Company in accordance with their terms and entitled to the
benefits provided by the Indenture;
(iv) The Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto with respect to the Notes, pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule
424(b); and to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued, and no proceedings for that purpose have been instituted or
threatened, and the Registration Statement and the Prospectus (other
than the financial statements and other financial and statistical
information contained therein as to which such counsel need express
no opinion, and other than the Form T-1, as to which such counsel
need express no opinion) comply as to form in all material respects
with the applicable requirements of the Act and the Trust Indenture
Act, and the Exchange Act with respect to the documents incorporated
by reference, and the respective rules thereunder;
(v) This Agreement has been duly authorized, executed and
delivered by the Company;
(vi) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in
connection with the transactions contemplated herein, except such as
have been obtained under the Act, the Pennsylvania Public Utility
Code and the Trust Indenture Act and such as may be required under
the blue sky laws of any jurisdiction;
(vii) Neither the issue and sale of the Notes, nor the
consummation of any other of the transactions herein contemplated
nor the fulfillment of the terms hereof will conflict
<PAGE>
with, result in a breach or violation of or imposition of any lien,
charge or encumbrance upon any property or assets of the Company (A)
pursuant to, the charter or by-laws of the Company, (B) to such
counsel's knowledge, pursuant to, the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which the Company or any of its subsidiaries is a
party or bound or to which its or their property is subject, or (C)
pursuant to any statute, law, rule or regulation, or (D) pursuant to
any judgment, order or decree, known to such counsel, applicable to
the Company of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its properties; and
(viii) To the knowledge of such counsel, there is no pending
or threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any of its subsidiaries or its or their property, of
a character required to be disclosed in the Registration Statement
which is not adequately disclosed in the Prospectus, and to such
counsel's knowledge there is no franchise, contract or other
document of a character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit thereto, which
is not described or filed as required.
In addition, each such counsel shall state that although they do not
assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the Prospectus,
except for those covered by their opinion in subsection (ii) of this
section 5(b), such counsel has no reason to believe that on the Effective
Date (as the Registration Statement may then be amended or supplemented)
the Registration Statement included or includes any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the Prospectus as of its date and as of the Execution Time and on the
Closing Date included or includes any untrue statement of a material fact
or omitted or omits to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in each case,
other than the financial
<PAGE>
statements and other financial or statistical information contained
therein, as to which such counsel need express no view, and other than the
Form T-1, as to which such counsel need express no view);
In rendering such opinion, (A) Berlack, Israels & Liberman LLP may rely
upon the opinion of Ryan, Russell, Ogden & Seltzer LLP, delivered pursuant
to paragraph (c) hereof, as to matters involving the laws of Commonwealth
of Pennsylvania and on the opinion of Piper & Marbury L.L.P., delivered
pursuant to paragraph (d) hereof, as to matters involving the laws of the
State of Maryland and (B) as to matters of fact, to the extent they deem
proper, such counsel may rely on certificates of responsible officers of
the Company and public officials. References to the Prospectus in this
paragraph (b) include any supplements thereto at the dates of such
counsel's opinion.
(c) The Company shall have furnished to each Agent the opinion of
Ryan, Russell, Ogden & Seltzer LLP, Pennsylvania counsel to the Company,
dated the Execution Time, to the effect that:
(i) The Company is duly incorporated and is validly subsisting
as a corporation in good standing under the laws of the Commonwealth
of Pennsylvania, with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and conduct
its business as described in the Prospectus (and any supplements
thereto), and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction;
(ii) The Notes and the Indenture conform as to legal matters to
the statements concerning them contained in the Prospectus (and any
supplements thereto);
(iii) The Indenture has been duly authorized, executed and
delivered and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or
other laws affecting creditors' rights generally from time to time
in effect, and to general principles of equity); and when the Notes
have
<PAGE>
been duly executed by the Company, authenticated by the Trustee and
payment therefor has been made by the purchaser thereof, they will
be valid and binding obligations of the Company in accordance with
their terms and entitled to the benefits provided by the Indenture;
(iv) This Agreement has been duly authorized, executed and
delivered by the Company;
(v) No consent, approval, authorization, filing with or order
of any Pennsylvania court or Pennsylvania governmental agency or
body is required in connection with the transactions contemplated
herein, except such as have been obtained under the Pennsylvania
Public Utility Code;
(vi) Neither the issue and sale of the Notes, nor the
consummation of any other of the transactions herein contemplated
nor the fulfillment of the terms hereof will conflict with, result
in a breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of the Company (A) pursuant
to, the charter or by-laws of the Company, (B) to such counsel's
knowledge, pursuant to, the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which
the Company or any of its subsidiaries is a party or bound or to
which its or their property is subject, or (C) pursuant to any
statute, law, rule or regulation, or (D) pursuant to any judgment,
order or decree, known to such counsel, applicable to the Company of
any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the
Company or any of its properties; and
(vii) To the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any of its subsidiaries or its or their property, of
a character required to be disclosed in the Registration Statement
which is not adequately disclosed in the Prospectus, and to such
counsel's knowledge there is no franchise, contract or other
document of a character required to be described in the Registration
Statement or Prospectus, or to be
<PAGE>
filed as an exhibit thereto, which is not described or filed as
required.
In rendering such opinion, (A) Ryan, Russell, Ogden & Seltzer LLP may rely
on the opinion of Berlack, Israels & Liberman LLP, delivered pursuant to
paragraph (b) hereof, as to matters involving the laws of the State of New
York and on the opinion of Piper & Marbury L.L.P., delivered pursuant to
paragraph (d) hereof, as to matters involving the laws of the State of
Maryland and (B) as to matters of fact, to the extent they deem proper,
such counsel may rely on certificates of responsible officers of the
Company and public officials. References to the Prospectus in this
paragraph (c) include any supplements thereto at the dates of such
counsel's opinion.
(d) The Company shall have furnished to each Agent the opinion of
Piper & Marbury L.L.P., Maryland counsel to the Company, dated the
Execution Time, to the effect that:
(i) The Company duly qualified to do business as a foreign
corporation and is in good standing under the laws of the State of
Maryland; and
(ii) No consent, approval, authorization, filing with or order
of any Maryland court or Maryland governmental agency or body is
required in connection with the transactions contemplated herein.
(e) The Agents shall have received from Thelen Reid & Priest LLP,
counsel for the Agents, such opinion or opinions, dated the Execution
Time, with respect to the issuance and sale of the Notes, the Indenture,
the Registration Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Agents may reasonably require,
and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Agents a certificate of
the Company, signed by the President or any Vice President and the
principal financial or accounting officer of the Company, dated the
Execution Time, to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the date hereof and the Company has complied with all
<PAGE>
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; and
(iii) since the respective most recent dates for which
information is given in the Registration Statement or the
Prospectus, there has not occurred any downgrading, nor has any
notice been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of
the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the Act.
(g) At the Execution Time, PricewaterhouseCoopers LLP shall have
furnished to each Agent a letter or letters (which may refer to letters
previously delivered to the Agent), dated as of the Execution Time, in
form and substance satisfactory to each Agent, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act
and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules and pro forma financial statements
included or incorporated by reference in the Registration Statement
and the Prospectus and reported on by them comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related rules and regulations
adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited interim
financial statements, if any, made available by the Company and its
subsidiaries; their limited review, in accordance with standards
established under Statement on Auditing Standards No. 71, of the
latest unaudited interim financial statements, if any, made
available by the Company and its subsidiaries; a reading of the
minutes of the meetings of the Board of Directors, Committees of the
Board of
<PAGE>
Directors, and the Stockholder of the Company; and inquiries of
certain officials of the Company who have responsibility for
financial and accounting matters of the Company and its subsidiaries
as to transactions and events subsequent to December 31, 1998,
nothing came to their attention which caused them to believe that:
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement and
the Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the Act
and the Exchange Act; and said unaudited financial statements
are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with
that of the audited financial statements included or
incorporated by reference in the Registration Statement and
the Prospectus; and
(2) with respect to the period subsequent to December
31, 1998, there were any changes, at a specified date not more
than five days prior to the date of the letter, in the common
stock, cumulative preferred stock without mandatory
redemption, company-obligated mandatorily redeemable preferred
securities or long-term debt of the Company or decreases in
the common stockholder's equity (except as occasioned by the
declaration of dividends) as compared with the amounts shown
on the December 31, 1998 consolidated balance sheet included
or incorporated by reference in the Registration Statement and
the Prospectus, or for the period from January 1, 1999 to such
specified date there were any decreases, as compared with the
corresponding period in the preceding year in operating income
or net income of the Company and its subsidiaries, except in
all instances for changes or decreases set forth in such
letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the Agents;
and
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical
<PAGE>
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus and in Exhibit 12 to the Registration
Statement, the information included or incorporated by reference in
Items 1, 2, 6 and 7 of the Company's Annual Report on Form 10-K,
incorporated by reference in the Registration Statement and the
Prospectus, the information included in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included
in the Company's most recent Quarterly Report on Form 10-Q,
incorporated by reference in the Registration Statement and the
Prospectus, and the pro forma information appearing as Exhibit 99 to
the Company's Annual Report on Form 10-K, incorporated by reference
in the Registration Statement and the Prospectus, agrees with the
accounting records of the Company and its subsidiaries, excluding
any questions of legal interpretation;
(iv) on the basis of a reading of the unaudited pro forma
financial statements included or incorporated by reference in the
Registration Statement and the Prospectus (the "pro forma financial
statements"); carrying out certain specified procedures; inquiries
of certain officials of the Company who have responsibility for
financial and accounting matters; and proving the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the pro forma financial statements, nothing
came to their attention which caused them to believe that the pro
forma financial statements do not comply as to form in all material
respects with the applicable accounting requirements of Rule 11-02
of Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of
such statements.
References to the Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
(h) Prior to the Execution Time, the Company shall have furnished to
each Agent such further information, documents, certificates and opinions
of counsel as the Agents may reasonably request.
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any
<PAGE>
of the opinions and certificates mentioned above or elsewhere in this Agreement
shall not be in all material respects reasonably satisfactory in form and
substance to the Agents and their counsel, this Agreement and all obligations of
the Agents hereunder may be canceled at any time by the Agents. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the office of Berlack, Israels & Liberman LLP, 120 West 45th
Street, New York, New York 10036, at the Execution Time.
6. Conditions to the Obligations of the Purchaser. The obligations
of the Purchaser to purchase any Notes will be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the date of any related Terms Agreement and as of the Closing Date for such
Notes, to the accuracy of the statements of the Company made in any certificates
delivered pursuant to the provisions hereof, to the performance and observance
by the Company of all covenants, obligations and agreements herein contained on
its part to be performed and observed and to the following additional conditions
precedent:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such supplement,
shall have been filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) Unless otherwise specified by any related Terms Agreement and
except to the extent modified by such Terms Agreement, the Purchaser shall
have received, appropriately updated, (i) a certificate of the Company,
dated as of the Closing Date, to the effect set forth in Section 5(f)
(except that references to the Prospectus shall be to the Prospectus as
supplemented at the time of execution of the Terms Agreement), (ii) the
opinion of Berlack, Israels & Liberman LLP, counsel for the Company, dated
as of the Closing Date, to the effect set forth in Section 5(b), (iii) the
opinion of Ryan, Russell, Ogden & Seltzer LLP, counsel for the Company,
dated as of the Closing Date, to the effect set forth in Section 5(c),
(iv) the opinion of Piper & Marbury L.L.P., Maryland counsel for the
Company, dated as of the Closing Date, to the effect set forth in Section
5(d), (v) the opinion of Thelen Reid & Priest LLP, counsel for the
Purchaser,
<PAGE>
dated as of the Closing Date, to the effect set forth in Section 5(e), and
(iv) the letter of PricewaterhouseCoopers LLP, independent accountants for
the Company, dated as of the Closing Date, to the effect set forth in
Section 5(g).
(c) Prior to the Closing Date, the Company shall have furnished
to the Purchaser such further information, documents,
certificates and opinions of counsel as the Purchaser may
reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement
and any Terms Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement or such Terms Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the Purchaser
and its counsel, such Terms Agreement and all obligations of the Purchaser
thereunder and with respect to the Notes subject thereto may be canceled at, or
at any time prior to, the respective Closing Date by the Purchaser. Notice of
such cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
7. Right of Person Who Agreed to Purchase to Refuse to Purchase. The
Company agrees that any person who has agreed to purchase and pay for any Note,
including a Purchaser and any person who purchases pursuant to a solicitation by
any Agent, shall have the right to refuse to purchase such Note if, at the
Closing Date therefor, either (a) any condition set forth in Section 5 or 6, as
applicable, shall not be satisfied or (b) subsequent to the agreement to
purchase such Note, any change, or any development involving a prospective
change, in or affecting the business or properties of the Company shall have
occurred the effect of which is, in the judgment of the Purchaser or the Agent
which presented the offer to purchase such Note, as applicable, so material and
adverse as to make it impractical or inadvisable to proceed with the delivery of
such Note.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each of you, each of your directors, officers,
employees and agents and each person who controls each of you within the meaning
of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which you, they or any of you or
them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon
<PAGE>
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement for the registration of the Securities as originally
filed or in any amendment thereof, or in the Prospectus or any preliminary
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) the Company will not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by such of you
specifically for inclusion therein, and (ii) such indemnity with respect to the
Prospectus or any preliminary Prospectus shall not inure to the benefit of any
of you from whom the person asserting any such loss, claim, damage or liability
purchased the Notes concerned, to the extent that any such loss, claim, damage
or liability occurs under the circumstances where it shall have been determined
by a court of competent jurisdiction by final and nonappealable judgment that
(w) the Company has previously furnished copies of such Prospectus or
preliminary Prospectus to you, (x) delivery of such Prospectus or preliminary
Prospectus was required by the Act to be made to such person, (y) the untrue
statement or omission of a material fact contained in such Prospectus or
preliminary Prospectus was corrected in an amendment or supplement to such
Prospectus or preliminary Prospectus, and (z) there was not sent or given to
such person, at or prior to the written confirmation of the sale of the Notes to
such person, a copy of such Prospectus or preliminary Prospectus, as amended or
supplemented. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each of you, severally and not jointly, agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to you, but only with reference to written
information relating to such of you furnished to the Company by such of you
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
you may otherwise have.
<PAGE>
The Company acknowledges that the only written information relating to any of
you furnished to the Company by any of you specifically for inclusion in the
documents referred to in the foregoing indemnity is as follows: (i) the names of
the Agents appearing on the cover page of the Prospectus Supplement and in the
first sentence of the first paragraph under the heading "Plan of Distribution of
Notes" in the Prospectus Supplement and (ii) the sentences in the fourth
paragraph under the heading "Plan of Distribution of the Notes" relating to
stabilization and covering transactions.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party (i)
will not relieve it from any liability under paragraph (a) or (b) above unless
and to the extent such failure results in the loss by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel retained in the indemnified party's reasonable judgment), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded upon advice of counsel
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, or (ii) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying
party. An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder
<PAGE>
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding and (ii) does not include any
statement as to, or any admission of, fault, culpability or failure to act by or
on behalf of any indemnified party.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) or (b)
of this Section 8 is due in accordance with its terms but is for any reason held
by a court to be unavailable, in whole or in part, on grounds of policy or
otherwise, the Company and each of you, severally and not jointly, shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) to which the Company and any of you may be subject in such
proportion so that each of you is responsible for that portion represented by
the percentage that the aggregate commissions received by such of you pursuant
to Section 2 in connection with the Notes from which such losses, claims,
damages and liabilities arise (or, in the case of Notes sold pursuant to a Terms
Agreement, the aggregate commissions that would have been received by such of
you if such commissions had been payable), bears to the aggregate principal
amount of such Notes sold and the Company is responsible for the balance;
provided, however, that (x) in no case shall any of you be responsible for any
amount in excess of the commissions received by such of you in connection with
the Notes from which such losses, claims, damages and liabilities arise (or, in
the case of Notes sold pursuant to a Terms Agreement, the aggregate commissions
that would have been received by such of you if such commissions had been
payable) and (y) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls any of you within the meaning of the
Act shall have the same rights to contribution as you and each person who
controls the Company within the meaning of either the Act or the Exchange Act,
each officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company, subject in each case to clause (y) of this paragraph (d). Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this
paragraph (d), notify such party or parties from whom contribution may be
sought, but
<PAGE>
the omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have here-under or otherwise than under this paragraph (d).
9. Termination. (a) This Agreement will continue in effect until
terminated as provided in this Section 9. This Agreement may be terminated by
either the Company as to any of you or any of you insofar as this Agreement
relates to such of you, giving written notice of such termination to such of you
or the Company, as the case may be. This Agreement shall so terminate at the
close of business on the first business day following the receipt of such notice
by the party to whom such notice is given. In the event of such termination, no
party shall have any liability to the other party hereto, except as provided in
the fourth paragraph of Section 2(a), Section 4(h), Section 8 and Section 10.
(b) Each Terms Agreement shall be subject to termination in the
absolute discretion of the Purchaser, by notice given to the Company prior to
delivery of any payment for Notes to be purchased thereunder, if after the date
of the Terms Agreement and prior to such time (i) trading in securities
generally on the New York Stock Exchange shall have been suspended or limited or
minimum prices shall have been established on such Exchange, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities, (iii) there shall have occurred any new outbreak or material
escalation of hostilities or other calamity or crisis the effect of which on the
financial markets or the United States is such as to make it, in the judgment of
the Purchaser, impracticable to market such Notes, (iv) any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries, if any,
considered as one enterprise, whether or not arising in the ordinary course of
business or (v) the rating assigned by any nationally recognized securities
rating agency to any debt securities of the Company shall have been lowered or
if any such rating agency shall have publicly announced that it has placed any
debt securities of the Company on what is commonly termed a "watch list" for
possible downgrading.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of you set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of you or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive
<PAGE>
delivery of and payment for the Notes. The provisions of Sections 4(i) and 8
hereof shall survive the termination or cancellation of this Agreement.
11. Notices. Except as otherwise stated herein, all communications
hereunder will be in writing and effective only on receipt, and, if sent to any
of you, will be mailed, delivered or telecopied and confirmed to such of you, at
the address specified in Schedule I hereto; or, if sent to the Company, will be
mailed, delivered or telecopied and confirmed to it at Pennsylvania Electric
Company, c/o GPU Service, Inc., 310 Madison Avenue, Morristown, New Jersey
07962-1957, Attention: Treasurer.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8, and no other
person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
14. Counterparts. This Agreement may be executed in two or
more counterparts, all of which together shall constitute one and the same
instrument.
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,
Pennsylvania Electric Company
By:
--------------------------
Name:
Title:
<PAGE>
The foregoing Agreement is hereby confirmed and accepted as of the date hereof.
SALOMON SMITH BARNEY INC.
By:
---------------------------
Name:
Title:
BANC OF AMERICA SECURITIES LLC
By:
----------------------------
Name:
Title:
<PAGE>
SCHEDULE I
The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold by such Agent:
TERM COMMISSION RATE
---- ---------------
1 year to less than 18 months .150%
18 months to less than 2 years .200%
2 years to less than 3 years .250%
3 years to less than 4 years .350%
4 years to less than 5 years .450%
5 years to less than 6 years .500%
6 years to less than 7 years .550%
7 years to less than 10 years .600%
10 years to less than 15 years .625%
15 years to less than 20 years .700%
20 years and more .750%
Address for Notice to you:
Notices to Salomon Smith Barney Inc. shall be directed to it at 7
World Trade Center, New York, New York 10048, Attention: Medium-Term Notes
Department, Telephone No.: 212-783-5897, Facsimile No.: 212-783-2274.
Notices to Banc of America Securities LLC shall be directed to it
at BankAmerica Corporate Center, 100 North Tryon Street, Charlotte, North
Carolina 28255-0001, Attention: Lynn McConnell, Telephone No.: (704)
386-6616, Facsimile No.: (704) 388-9939.
<PAGE>
EXHIBIT A
Pennsylvania Electric Company
ADMINISTRATIVE PROCEDURES
FOR FIXED RATE AND FLOATING RATE MEDIUM-TERM NOTES, SERIES E
------------------------
July 30, 1999
The administrative procedures and specific terms of the offering of
Medium-Term Notes, Series E (the "Notes"), on a continuous basis by Pennsylvania
Electric Company (the "Company") pursuant to the Selling Agency Agreement dated
as of July 30, 1999 (the "Agency Agreement") between the Company and each of
Salomon Smith Barney Inc. and Banc of America Securities LLC (each an "Agent"
and collectively the "Agents") are explained below. In, and subject to the terms
of, the Agency Agreement, the Agents have agreed to use their reasonable best
efforts to solicit purchases of the Notes. Each Agent, as principal, may
purchase Notes for its own account pursuant to the terms and settlement details
of a Terms Agreement entered into between the Company and such Agent, as
contemplated by the Agency Agreement.
Each Note will be issued under the Company's Senior Note Indenture
dated as of April 1, 1999, as supplemented by one or more Company certificates
relating to the Notes (such Indenture, as supplemented, the "Indenture"),
between the Company and United States Trust Company of New York, as trustee (the
"Trustee"). The Trustee will act as the paying agent (the "Paying Agent") for
the payment of principal of and premium, if any, and interest on the Notes and
will perform, as the Paying Agent, unless otherwise specified, the other duties
specified herein. Notes will bear interest either at fixed or floating rates.
Each Note will be represented by (a) a Global Security (as defined
hereinafter) delivered to the Trustee, as agent for The Depository Trust Company
("DTC"), and recorded in the book-entry system maintained by DTC (a "Book-Entry
Note"), or (b) in certificated form (each, a "Certificated Note") delivered to
the investor or other purchaser thereof or a person designated by such investor
or other purchaser. An owner of a Book-Entry Note will not be entitled to
receive a certificate representing such a Note.
<PAGE>
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Notes issued in book-entry form will be issued
in accordance with the procedures set forth in Part II hereof, as adjusted from
time to time in accordance with changes in DTC's operating requirements, and
Certificated Notes will be issued in accordance with the procedures set forth in
Part III hereof. Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed thereto in the Notes, the Indenture or the Agency
Agreement, as the case may be.
To the extent the procedures set forth below conflict with the
provisions of the Notes, the Indenture or the Agency Agreement, the relevant
provisions of the Notes, the Indenture and the Agency Agreement shall control.
Unless otherwise defined herein, terms defined in the Indenture shall be used
herein as therein defined.
PART I: PROCEDURES OF GENERAL
APPLICABILITY
Procedure for The Company and the Agents will discuss
Rate Setting from time to time the aggregate
and Posting: principal amount of, the issuance price of, and the
interest rates to be borne by, Notes that may be sold as
a result of the solicitation of offers by the Agents. If
the Company decides to set prices of, and rates borne
by, any Notes in respect of which the Agents are to
solicit offers (the setting of such prices and rates to
be referred to herein as "posting") or if the Company
decides to change prices or rates previously posted by
it, it will promptly advise the Agents of the prices and
rates to be posted.
Date of Issuance/
Authentication: Each Note will be dated as of the date of its
authentication by the Trustee. Each Note shall also bear
an original issue date (each, an "Original Issue Date").
The Original Issue Date shall remain the same for all
Notes subsequently issued upon transfer, exchange or
substitution of an original Note regardless of their
dates of authentication.
<PAGE>
Price to Public: Unless otherwise agreed to by the Company and
the Agents and specified in a pricing supplement, each
Note will be issued at 100% of the principal amount
thereof.
Maturities: Each Note will mature on a date from one year to 35
years from its Original Issue Date (the "Stated Maturity
Date") selected by the investor or other purchaser and
agreed to by the Company.
Registration: Unless otherwise provided in the applicable pricing
supplement, Notes will be issued only in fully
registered form.
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, the Notes will be issued in denominations
of $1,000 and integral multiples thereof.
Interest Rate
Bases applicable
to Floating Rate
Notes: Unless otherwise provided in the applicable pricing
supplement, Floating Rate Notes will bear interest at
a rate or rates determined by reference to LIBOR or
such other interest rate basis or formula as may be
set forth in the applicable pricing supplement, as
adjusted by the Spread and/or Spread Multiplier, if
any, applicable to such Floating Rate Notes.
Redemption/
Repayment: The pricing supplement relating to each Note will
describe the option, if any, of the Company to
redeem such Notes and the period or periods within
which, or the date or dates on which, the prices
at which and the terms and conditions upon which,
such Notes may be redeemed, in whole or in part
upon the exercise of such option. Unless otherwise
specified in the applicable pricing supplement,
the Notes will be redeemable only upon at least 30
days, but not more than 60 days prior notice
mailed to the registered address of each holder of
the Note.
<PAGE>
The Notes may be subject to repayment at the option of the
Holders thereof in accordance with the terms of the Notes,
which will be fixed at the time of sale and set forth in
the applicable pricing supplement. If no optional
repayment date is indicated with respect to a Note, such
Note will not be repayable at the option of the Holder
prior to its Stated Maturity Date.
Calculation of
Interest: In case of Fixed Rate Notes, interest (including
payments for partial periods) will be calculated and
paid on the basis of a 360-day year of twelve 30-day
months.
The interest rate on each Floating Rate Note will be
calculated by reference to the specified Interest Rate
Basis or Bases plus or minus the applicable Spread, if
any, and/or multiplied by the applicable Spread
Multiplier, if any.
Unless otherwise provided in the applicable pricing
supplement, interest on each Floating Rate Note will be
calculated by multiplying its principal amount by an
accrued interest factor. Such accrued interest factor is
computed by adding the interest factor calculated for each
day in the period for which accrued interest is being
calculated. Unless otherwise provided in the applicable
pricing supplement, the interest factor for each such day
is computed by dividing the interest rate applicable to
such day by 360.
Interest: General. Each Note will bear interest in accordance with
its terms. Unless otherwise provided in the applicable
pricing supplement, interest on each Note will accrue
from and including the Original Issue Date of such Note
for the first interest period or from the most recent
Interest Payment Date (as defined below) to which
interest has been paid or duly provided for all
subsequent interest periods to but excluding the next
applicable Interest Payment Date or the Stated Maturity
Date or date of earlier redemption or repayment, as the
case may
<PAGE>
be. The Stated Maturity Date or date of earlier redemption
or repayment is referred to herein as the "Maturity Date"
with respect to the principal repayable on such date.
If an Interest Payment Date or the Maturity Date with
respect to any Fixed Rate Note falls on a day that is not
a Business Day (as defined below), the required payment to
be made on such day need not be made on such day, but may
be made on the next succeeding Business Day with the same
force and effect as if made on such day, and no interest
shall accrue on such payment for the period from and after
such day to the next succeeding Business Day. If an
Interest Payment Date other than the Maturity Date with
respect to any Floating Rate Note would otherwise fall on
a day that is not a Business Day, such Interest Payment
Date will be postponed to the next succeeding Business
Day, except that in the case of a Floating Rate Note for
which LIBOR is an applicable interest rate basis, if such
Business Day falls in the next succeeding calendar month,
such Interest Payment Date will be the immediately
preceding Business Day. If the Maturity Date with respect
to any Floating Rate Note falls on a day that is not a
Business Day, the required payment to be made on such day
need not be made on such day, but may be made on the next
succeeding Business Day with the same force and effect as
if made on such day, and no interest shall accrue on such
payment for the period from and after the Maturity Date to
the next succeeding Business Day. Unless otherwise
provided in the applicable pricing supplement, "Business
Day" means each day that is not a day on which banking
institutions or trust companies in the Borough of
Manhattan, the City and State of New York, or in the city
where the corporate trust office of the Senior Note
Trustee is located, are obligated or authorized by law or
executive order to close; provided that, with respect to
Notes for which LIBOR is an applicable Interest Rate
Basis, such day is also a London Business Day (as defined
below). "London Business Day" means any day on which
commercial
<PAGE>
banks are open for business (including dealings in the
designated LIBOR currency) in London.
Record Dates. Unless otherwise provided in the applicable
pricing supplement, the "Record Date" for a Fixed Rate
Note shall be the fifteenth day of the calendar month
immediately preceding the applicable Interest Payment Date
and the "Record Date" for a Floating Rate Note shall be
the date 15 calendar days (whether or not a Business Day)
preceding the applicable Interest Payment Date.
Interest Payment Dates. Interest payments will be made on
each Interest Payment Date commencing with the first
Interest Payment Date following the Original Issue Date;
provided, however, the first payment of interest on any
Note originally issued between a Record Date and an
Interest Payment Date will occur on the Interest Payment
Date following the next succeeding Record Date.
Unless otherwise provided in the applicable pricing
supplement, interest payments on Fixed Rate Notes will be
made semiannually in arrears on August 1 and February 1 of
each year and on the Maturity Date, while interest
payments on Floating Rate Notes will be made as specified
in the Prospectus and the applicable pricing supplement.
Acceptance and
Rejection of
Offers from
Solicitation
as Agents: Each Agent will communicate to the Company, orally, by
telephone, in writing or by other appropriate means,
each reasonable offer to purchase Notes solicited by
such Agent on an agency basis, other than those offers
rejected by such Agent. Each Agent has the right, in
its discretion reasonably exercised, to reject any
proposed purchase of Notes, as a whole or in part, and
any such rejection shall not be a breach of such
Agent's agreement contained in the Agency Agreement.
The Company has the sole right
<PAGE>
to accept or reject any proposed purchase of Notes, in
whole or in part, and any such rejection shall not be a
breach of the Company's agreement contained in the Agency
Agreement. Each Agent has agreed to make reasonable
efforts to assist the Company in obtaining performance by
each purchaser whose offer to purchase Notes has been
solicited by such Agent and accepted by the Company.
The Company will promptly notify an Agent presenting an
offer to the Company of its acceptance or rejection of
such offer and will confirm any such acceptance in writing
to such Agent.
Preparation
of Pricing
Supplement: If any offer to purchase a Note is accepted by the
Company, the Company with the approval of the Agent that
presented such offer, will promptly prepare a pricing
supplement reflecting the terms of such Note.
Information to be included in the pricing supplement
shall include:
1. the name of the Company;
2. the title of the Notes and whether it will be a
Book-Entry or Certificated Note;
3. the date of the pricing supplement and the date of the
Prospectus to which the pricing supplement relates;
4. the name of the Offering Agent (as defined below);
5. whether such Notes are being sold to the Offering Agent
as principal or to an investor or other purchaser
through the Offering Agent acting as agent for the
Company;
6. with respect to Notes sold to the Offering Agent as
principal, whether such Notes will be resold by the
Offering Agent to investors and other purchasers at (i)
a fixed public offering price of 100% of their
<PAGE>
principal amount or at (ii) varying prices related to
prevailing market prices at the time of resale to be
determined by the Offering Agent;
7. the Offering Agent's discount or commission;
8. Net proceeds to the Company;
9. the Principal Amount, Original Issue Date, Stated
Maturity Date, Interest Payment Date(s), Redemption
Date, if any, and, in the case of Fixed Rate Notes,
the Interest Rate, and, in the case of Floating Rate
Notes, the interest rate basis or bases, Index
Maturity (if applicable), initial Interest Rate, if
any, maximum Interest Rate, if any, minimum Interest
Rate, if any, Initial Interest Reset Date, Interest
Reset Dates, Spread and/or Spread Multiplier, if any,
and calculation agent; and
10. any other additional provisions of the Notes material to
investors or other purchasers of the Notes not otherwise
specified in the Prospectus.
The Company shall endeavor to send such Pricing
Supplement by telecopy or overnight express (for
delivery by the close of business on the applicable
trade date, but in no event later than 11:00 A.M. New
York City time, on the Business Day following the
applicable trade date) to the Agent which made or
presented the offer to purchase the applicable Note (in
such capacity, the "Offering Agent") at the following
applicable address:
if to Salomon Smith Barney, to:
390 Greenwich Street, 4th Floor
New York, New York, 10013.
Attn: Howard Hiller
Tel: 212-723-6098
Fax: 212-723-8672; and
if to Banc of America Securities LLC, to:
Bank America Corporate Center
NC 1-007-07-01
100 North Tryon Street, 7th Floor
<PAGE>
Charlotte, North Carolina 28255-001
Attn: Lynn T. McConnell
Tel: 704-386-6619
Fax: 704-388-9939
The Company shall send a copy of such Pricing Supplement
by telecopy or overnight express (for delivery by the
close of business on the applicable trade date, but in no
event later than 11:00 A.M. New York City time, on the
Business Day following the applicable trade date) to the
Trustee, at the following applicable address:
114 West 47th Street
New York, New York 10036.
Attention: Corporate Trustee, Department B
Tel: 212-852-1671
Fax: 212-852-1626
For record keeping purposes, one copy of such Pricing
Supplement shall also be mailed or telecopied to:
Thelen Reid & Priest LLP 40 West 57th Street New York, New
York 10019-4097.
Attention: Michael F. Fitzpatrick, Jr. Esq.
Tel: 212-603-2000
Fax: 212-603-2001
The Company will arrange to have the Pricing supplement
transmitted via EDGAR to the Securities and Exchange
Commission (the "Commission") in accordance with the
applicable paragraph of Rule 424(b) under the Act.
In addition, the Company will file as required copies of
the pricing supplement with the applicable state
regulatory authorities concurrently with the filing of the
pricing supplement with the Commission.
In each instance that a pricing supplement is prepared,
the Offering Agent will provide a copy of such pricing
supplement to each investor or purchaser of the
relevant Notes or its agent. Outdated
<PAGE>
Pricing Supplements (other than those retained for files)
will be destroyed.
Settlement: The receipt of immediately available funds by the Company
in payment for a Note and the authentication and
delivery of such Note shall, with respect to such Note,
constitute "settlement". Offers accepted by the
Company will be settled in three Business Days, or at
such time as the purchaser, the applicable Agent and
the Company shall agree, pursuant to the timetable for
settlement set forth in Parts II and III hereof under
"Settlement Procedure Timetable" with respect to Book
Entry Notes and Certificated Notes, respectively (each
such date fixed for settlement is hereinafter referred
to as a "Settlement Date"). If procedures A and B of
the applicable Settlement Procedures with respect to a
particular offer are not completed on or before the
time set forth under the applicable "Settlement
Procedures Timetable", such offer shall not be settled
until the Business Day following the completion of
settlement procedures A and B or such later date as the
purchaser and the Company shall agree.
The foregoing settlement procedures may be modified with
respect to any purchase of Notes by an Agent as principal
if so agreed by the Company and such Agent.
Procedure for
Changing Rates or
Other Variable
Terms: When a decision has been reached to change the interest
rate or any other variable term on any Notes being sold
by the Company, the Company will promptly advise the
Agents and the Trustee by facsimile or electronic
transmission and the Agents will forthwith suspend
solicitation of offers to purchase such Notes. The
Agents will telephone the Company with recommendations
as to the changed interest rates or other variable
terms. At such time as the Company notifies the Agents
and the Trustee of the new interest rates or other
variable terms, the Agents may resume solicitation of
offers to purchase such Notes. Until such time, only
<PAGE>
"indications of interest" may be recorded. Immediately
after acceptance by the Company of an offer to purchase
Notes at a new interest rate or new variable term, the
Company, the Offering Agent and the Trustee shall follow
the procedures set forth under the applicable "Settlement
Procedures".
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to suspend
solicitation of offers to purchase Notes at any time.
Upon receipt of such instructions, the Agents will
forthwith suspend solicitation of offers to purchase
from the Company until such time as the Company has
advised the Agents that solicitation of offers to
purchase may be resumed. If the Company decides to
amend or supplement the Registration Statement or the
Prospectus (other than to establish or change interest
rates or formulas, maturities, prices or other similar
variable terms with respect to the Notes), it will
promptly advise the Agents and will furnish the Agents
and their counsel with copies of the proposed amendment
or supplement. Copies of such amendment or supplement
will be delivered or mailed to the Agents, their counsel
and the Trustee in quantities which such parties may
reasonably request at the following respective
addresses:
if to Salomon Smith Barney, to:
390 Greenwich Street, 4th Floor
New York, New York, 10013.
Attn: Howard Hiller
Tel: 212-723-6098
Fax: 212-723-8672; and
if to Banc of America Securities LLC, to:
Bank America Corporate Center
NC 1-007-07-01
100 North Tryon Street, 7th Floor
Charlotte, North Carolina 28255-001
Attn: Lynn T. McConnell
Tel: 704-386-6619
Fax: 704-388-9939; and
<PAGE>
if to the Trustee, to:
114 West 47th Street,
New York, New York 10036
Attention: Corporate Trustee, Department B
Tel: 212-852-1671
Fax: 212-852-1626
For record keeping purposes, one copy of each such
amendment or supplement shall also be mailed or telecopied
to:
Thelen Reid & Priest LLP, 40 West 57th Street New York, New
York 10019-4097.
Attention: Michael F. Fitzpatrick, Jr. Esq.
Tel: 212-603-2000
Fax: 212-603-2001
In the event that at the time the solicitation of offers
to purchase from the Company is suspended (other than to
establish or change interest rates or formulas,
maturities, prices or other similar variable terms with
respect to the Notes) there shall be any offers to
purchase Notes that have been accepted by the Company
which have not been settled, the Company will promptly
advise the Offering Agent and the Trustee whether such
offers may be settled and whether copies of the Prospectus
as theretofore amended and/or supplemented as in effect at
the time of the suspension may be delivered in connection
with the settlement of such offers. The Company will have
the sole responsibility for such decision and for any
arrangements which may be made in the event that the
Company determines that such offers may not be settled or
that copies of such Prospectus may not be so delivered.
The Company will transmit to the Commission and other
applicable state regulatory authorities for filing
therewith any amendment or supplement to the Prospectus
relating to the Notes and confirm to the Agents that such
amendment or supplement has been filed with the Commission
pursuant to the applicable paragraph of Rule 424(b).
<PAGE>
Delivery of
Prospectus and
applicable
Pricing
Supplement: A copy of the most recent Prospectus and the applicable
pricing supplement, which pursuant to Rule 434 may be
delivered separately from the Prospectus, must
accompany or precede the earlier of (a) the written
confirmation of a sale sent to an investor or other
purchaser or its agent and (b) the delivery of Notes to
an investor or other purchaser or its agent.
If notice of a change in the terms of the Notes is
received by an Agent between the time an order for a Note
is placed and the time written confirmation thereof is
sent by such Agent to a customer or his agent, such
confirmation shall be accompanied by a Prospectus,
Prospectus Supplement and Pricing Supplement setting forth
the terms in effect when the order was placed. Subject to
"Suspension of Solicitation; Amendment or Supplement"
above, each Agent will deliver a Prospectus, Prospectus
Supplement and Pricing Supplement as herein described with
respect to each Note sold by it.
Authenticity
of Signatures: The Agents will have no obligation or
liability to the Company or the Trustee in respect of the
authenticity of the signature of any officer, employee or
agent of the Company, or the Trustee on any Note.
Documents
Incorporated by
by Reference: The Company shall supply the Agents with an adequate
supply of all documents incorporated by reference in
the Registration Statement and the Prospectus.
Payment of
Expenses: Each Agent shall forward to the Company, on a monthly
basis, a statement of the out-of-pocket expenses
incurred by such Agent during that month which are
reimbursable to it pursuant to the terms of the Agency
Agreement. The Company
<PAGE>
will remit payment to the Agents currently on a monthly
basis.
Confirmation: For each offer to purchase a Note solicited by an Agent
and accepted by or on behalf of the Company, the Offering
Agent will issue a confirmation to the purchaser, with a
copy to the Company, setting forth the sale and delivery
and payment instructions.
PART II. ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations
dated July 22, 1999 from the Company and the Trustee to DTC and a Medium-Term
Note Certificate Agreement between the Trustee and DTC, dated as of October 21,
1988, as amended, to include the Notes, and its obligations as a participant in
DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Notes issued in book-entry form having
the same Issue Price, Original Issue Date, Interest
Rate, Interest Payment Dates, redemption terms, if
any, and Stated Maturity Date (collectively, the
"Fixed Rate Terms") will be represented initially by
a single Global Security; and all Floating Rate Notes
issued in book-entry form having the same Issue
Price, Original Issue Date, formula for the
calculation of interest (including the Interest Rate
Basis, which may be LIBOR or any other interest rate
basis or formula, and Spread and/or Spread
Multiplier, if any), Index Maturity (if applicable),
minimum Interest Rate, if any, maximum Interest Rate,
if any, redemption terms, if any, Interest Payment
Dates, Interest Reset Dates and Maturity Date
(collectively, the "Floating Rate Terms") will be
represented initially by a single Global Security.
For other variable terms with respect to the Fixed
Rate Notes and Floating Rate
<PAGE>
Notes, see the Prospectus and the applicable Pricing
Supplement.
Owners of beneficial interests in Book-Entry Notes will
be entitled to physical delivery of Certificated Notes
equal in principal amount to their respective beneficial
interests only upon certain limited circumstances
described in the Prospectus.
Identification: The Company has arranged with the CUSIP Service
Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for the reservation of one series of
CUSIP numbers (including tranche numbers), which
series consists of approximately 900 CUSIP numbers
and relates to Global Securities representing the
Book-Entry Notes. The Company has obtained from the
CUSIP Service Bureau a written list of such series of
reserved CUSIP numbers and has delivered to the
Trustee and to DTC's Underwriting Department a
written list of 900 CUSIP numbers of such series.
The Trustee will assign CUSIP numbers to Global
Securities as described below under Settlement
Procedure "B". DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the
Trustee has as-signed to Global Securities. At any
time when fewer than 100 of the reserved CUSIP
numbers of the series remain unassigned to Global
Securities, and if it deems necessary, the Company
will reserve additional CUSIP numbers for assignment
to Global Securities representing Book-Entry Notes.
Upon obtaining such additional CUSIP numbers, the
Company shall deliver a list of such additional CUSIP
numbers to the Trustee and DTC's Underwriting
Department. Notes issued in book-entry form in
excess of $200,000,000 aggregate principal amount and
otherwise required to be represented by the same
Global Security will instead be represented by two or
more Global Securities which shall all be assigned
the same CUSIP number.
Registration: Unless otherwise specified by DTC, each Global
Security will be registered in
<PAGE>
the name of Cede & Co., as nominee for DTC, on the
Security Register maintained under the Indenture. The
beneficial owner of a Book-Entry Note (or one or more
indirect participants in DTC designated by such owner)
will designate one or more participants in DTC (with
respect to such Note, the "Participants") to act as
agent or agents for such owner in connection with the
book-entry system maintained by DTC, and DTC will record
in book-entry form, in accordance with instructions
provided by such Participants, a credit balance with
respect to such beneficial owner in such Note in the
account of such Participants. The ownership interest of
such beneficial owner in such Note will be recorded
through the records of such Participants or through the
separate records of such Participants and one or more
indirect participants in DTC.
Transfers: Transfers of beneficial ownership in a Book-Entry Note
will be accomplished by book entries made by DTC and, in
turn, by Participants (and in certain cases, one or more
indirect participants in DTC) acting on behalf of
beneficial transferrees and transferrers of such Note.
Exchanges: The Trustee may deliver to DTC's Reorganization
Department and the CUSIP Service Bureau at any time a
written notice of consolidation specifying (i) the
CUSIP numbers of two or more outstanding Global
Securities that represent Book-Entry Notes having
different Original Issue Dates but otherwise the same
Fixed Rate or Floating Rate Terms, as the case may be
(other than Original Issue Dates), and for which
interest has been paid to the same date, (ii) a date,
occurring at least thirty days after such written
notice is delivered and at least thirty days before
the next Interest Payment Date for such Book-Entry
Notes, on which such Global Securities shall be
exchanged for a single replacement Global Security
and (iii) a new CUSIP number to be assigned to such
replacement Global Security. Upon
<PAGE>
receipt of such a notice, DTC will send to its
participants (including the Trustee) a written
reorganization notice to the effect that such exchange
will occur on such date. Prior to the specified exchange
date, the Trustee will deliver to the CUSIP Service
Bureau a written notice setting forth such exchange date
and the new CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the Global
Securities to be exchanged will no longer be valid. On
the specified exchange date, the Trustee will exchange
such Global Securities for a single Global Security
bearing the new CUSIP number, and the CUSIP numbers of
the exchanged Global Securities will, in accordance with
CUSIP Service Bureau procedures, be canceled and not
immediately reassigned. Notwithstanding the foregoing,
if the Global Securities to be exchanged exceed
$200,000,000 in aggregate principal amount, one Global
Security will be authenticated and issued to represent
each $200,000,000 of principal amount of the exchanged
Global Security and an additional Global Security will
be authenticated and issued to represent any remaining
principal amount of such Global Securities (see
"Denominations" below).
Denominations: Unless otherwise provided in the applicable pricing
supplement, Book-Entry Notes will be issued in
principal amounts of $1,000 or any amount in excess
thereof that is an integral multiple of $1,000.
Global Securities will be denominated in principal
amounts not in excess of $200,000,000. If one or
more Book-Entry Notes having an aggregate principal
amount in excess of $200,000,000 would, but for the
preceding sentence, be represented by a single Global
Security, then one Global Security will be issued to
represent each $200,000,000 principal amount of such
Book-Entry Note or Notes and an additional Global
Security will be issued to represent any remaining
principal amount of such Book-Entry Note or Notes.
In such a case, each of the Global Securities
representing such
<PAGE>
Book-Entry Note or Notes shall be assigned the same
CUSIP number.
Payment of
Principal and
Interest : Payment of Interest Only. Promptly after each Record
------------------------
Daye, the Paying Agent will deliver to the Company
and DTC a written notice specifying by CUSIP number
the amount of interest to be paid on each Global
Security on the following Interest Payment Date
(other than an Interest Payment Date coinciding with
the Maturity Date) and the total of such amounts.
DTC will confirm the amount payable on each Global
Security on such Interest Payment Date by reference
to the appropriate bond reports published by Standard
& Poor's Corporation. On such Interest Payment Date,
the Company will pay to the Paying Agent the total
amount of interest due on such Interest Payment Date
(other than on the Maturity Date), and the Paying
Agent will pay such amount to DTC at the times and in
the manner set forth under "Manner of Payment"
below. If any Interest Payment Date for a Book-Entry
Note is not a Business Day, the payment due on such
day shall be made on the next succeeding Business Day
and no interest shall accrue on such payment for the
period from and after such Interest Payment Date.
Notice of Interest Rates. Promptly after each Interest
Determination Date or Calculation Date, as the case may
be, for Floating Rate Notes issued in book-entry form,
the Trustee will notify at least two nationally
recognized rating agencies of the interest rates
determined as of such Interest Determination Date.
Payments on Maturity Date. On or about the first
Business Day of each month, the Paying Agent will
deliver to the Company and DTC a written list of
principal, premium, if any, and interest (to the extent
known) to be paid on each Global Security maturing on
the Maturity Date in the following month. The Company
and DTC will confirm with the
<PAGE>
Paying Agent the amounts of such principal and interest
payments with respect to each such Global Security on or
about the fifth Business Day preceding the Maturity Date
of such Global Security. On the Maturity Date, the
Company will pay to the Paying Agent an amount
sufficient to make the required payment due on such
Maturity Date. The Paying Agent will pay such amounts to
DTC at the times and in the manner set forth below under
"Manner of Payment". If the Maturity Date of a Global
Security representing Book-Entry Notes is not a Business
Day, the payment due on such day shall be made on the
next succeeding Business Day and no interest shall
accrue on such payment for the period from and after
such Maturity Date or the Redemption Date. Promptly
after payment to DTC of the principal and interest due
at the Maturity Date or the Redemption Date of such
Global Security, the Paying Agent will cancel such
Global Security in accordance with the terms of the
Indenture. On the first Business day of each month, the
Trustee will deliver to the Company a written statement
indicating the total principal amount of outstanding
Global Securities as of the close of business on the
immediately preceding Business Day.
Manner of Payment. The total amount of any principal,
premium, if any, and interest due on Global Securities
on any Interest Payment Date or on the Maturity Date
shall be paid by the Company to the Paying Agent in
immediately available funds for use by the Paying Agent
no later than 10:00 A.M. New York City time on such
date. The Company will make such payment on such Global
Securities by wire transfer to the Paying Agent or by
the Paying Agent's debiting the account of the Company
maintained with the Paying Agent. The Company will
confirm such instructions in writing to the Paying
Agent. Upon receipt of such funds, the Paying Agent will
pay by separate wire transfer (using Fedwire message
entry instructions in a form previously agreed to with
DTC) to an
<PAGE>
account at the Federal Reserve Bank of New York
previously agreed to with DTC, in funds available for
immediate use by DTC, each payment of principal
(together with interest thereon) due on Global
Securities on any Maturity Date. Thereafter, on each
such date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in
funds available for immediate use to the respective
Participants in whose names the Book-Entry Notes
represented by such Global Securities are recorded in
the book-entry system maintained by DTC. Neither the
Company nor the Paying Agent shall have any direct
responsibility or liability for the payment by DTC to
such Participants of the principal of and interest on
the Book-Entry Notes.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Book-Entry Note will be determined and
withheld by the Participant, indirect participant in DTC
or other Person responsible for forwarding payments and
materials directly to the beneficial owner of such Note.
Settlement Settlement Procedures with regard to
Procedures: each Book-Entry Note sold by the Company through an
Agent, as agent, shall be as follows:
A. The Offering Agent will advise the Company by
telephone or by facsimile transmission or other
acceptable means, of the following settlement
information:
1. Principal Amount and Authorized
Denomination:
2. (a) Fixed Interest Notes:
(i) Interest Rate or Bases.
(ii) Interest Payment Dates.
<PAGE>
(b) Floating Rate Notes:
(i) Interest Rate Basis or Bases.
(ii) Initial Interest Rate.
(iii) Spread and/or Spread
Multiplier, if any.
(iv) Initial Interest Reset Date
and Interest Reset Dates.
(v) Interest Payment Dates.
(vi) Index Maturity, if any.
(vii) Maximum and/or Minimum Interest
Rates, if any.
(viii) Calculation Agent.
(ix) Other terms, if any.
4. Price to public, if any, of such Note (or
whether such Note is being offered at
varying prices relating to prevailing market
prices at time of resale as determined by
the Agent).
5. Trade Date.
6. Settlement Date (Original Issue Date).
7. Maturity Date.
8. Redemption provisions, if any.
9. Repayment provisions, if any.
10. Net proceeds to the Company.
11. The Offering Agent's discount or
commission.
<PAGE>
12. Whether such Note is being sold to the
Offering Agent as principal or to an
investor or other purchaser through the
Agent acting as agent for the Company.
13. Such other information specified with
respect to such Note (whether by Addendum or
otherwise).
B. The Company will advise the Trustee by
telephone or electronic transmission of the
information set forth in Settlement Procedure
"A" above, and the name of the Offering Agent.
The Trustee will assign a CUSIP number to the
Global Security representing such Note. The
Trustee will also notify the Agent of such
CUSIP number by telephone as soon as
practicable.
C. The Company will transmit to the Trustee by
telex or facsimile or electronic transmission
its written request for the authentication and
delivery of such Global Security and the name
of such Agent. Each such communication by the
Company shall constitute a representation and
warranty by the Company to the Trustee and each
Agent that (i) the Global Security representing
such Book-Entry Note is then, and at the time
of issuance and sale thereof will be, duly
authorized for issuance and sale by the
Company, (ii) the Global Security representing
such Book-Entry Note will conform to the terms
of the Indenture, and (iii) such Global
Security, when completed, authenticated and
delivered pursuant to the Indenture, will
constitute the valid and legally binding
obligation of the Company.
The Trustee will enter a pending deposit
message through DTC's Participant Terminal
System, providing the following settlement
information to DTC, and such information will
be routed to
<PAGE>
Standard & Poor's Corporation through DTC for
inclusion in the appropriate daily bond report
published by Standard & Poor's Corporation:
1. The information set forth in the Settlement
Procedure A.
2. Identification numbers of the participant
accounts maintained by DTC on behalf of the
Trustee and the Offering Agent.
3. Identification of the Book-Entry Note as
a Fixed Rate Note or Floating Rate Note.
4. Initial Interest Payment Date for such
Note, number of days by which such date
succeeds the related record date for DTC
purposes (or, in the case of Floating
Rate Notes which reset daily or weekly,
the date five calendar days preceding the
Interest Payment Date) and, if then
calculable, the amount of interest
payable on such Interest Payment Date
(which amount shall have been confirmed
by the Trustee).
5. CUSIP number of the Global Security
representing such Note.
6. Whether such Global Security represents any
other Notes issued or to be issued in
book-entry form.
D. The Trustee will complete and authenticate the Global
Security representing such Note.
E. DTC will credit such Note to the Trustee's participant
account at DTC.
F. The Trustee will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC to
(i) debit such
<PAGE>
Note to the Trustee's participant's account and credit
such Note to such Agent's participant account and (ii)
debit such Agent's settlement account and credit the
Trustee's settlement account for an amount equal to the
price of such Note less such Agent's commission. The
entry of such a deliver order shall constitute a
representation and warranty by the Trustee to DTC that
(a) the Global Security representing such Book-Entry
Note has been issued and authenticated and (b) the
Trustee is holding such Global Security pursuant to the
Medium-Term Note Certificate Agreement between the
Trustee and DTC.
G. The Offering Agent will enter an SDFS deliver order
through DTC's Participant Terminal System instructing
DTC (i) to debit such Note to such Agent's
participant account and credit such Note to the
participant accounts of the Participants with respect
to such Note and (ii) to debit the settlement
accounts of such Participants and credit the
settlement account of such Agent for an amount equal
to the price of such Note.
H. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures F and G will
be settled in accordance with SDFS operating procedures
in effect on the Settlement Date.
I. Upon confirmation of receipt of funds, the Trustee will
transfer to a bank account designated by the Company, in
immediately available funds, the amount transferred to
the Trustee in accordance with Settlement Procedure F.
J. Upon request, the Trustee will send to the Company a
statement setting forth the principal amount of
Book-Entry Notes outstanding as of that date under the
Indenture.
K. Such Agent will confirm the purchase of such Note to
the purchaser either by transmitting to the
Participants with respect to such Note a confirmation
<PAGE>
order or orders through DTC's institutional delivery
system or by mailing a written confirmation to such
purchaser.
DTC will, upon request of the Company or the Trustee,
promptly furnish to the Company or the Trustee a list of
the names and addresses of the participants for whom DTC
has credited Book-Entry Notes.
Settlement For orders of Book-Entry Notes solicited
Procedures by an Agent, as agent, and accepted by
Timetable: the Company, Settlement Procedures "A" through "K"
set forth above shall be completed as soon as possible
but not later than the respective times (New York City
time) set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 9:00 A.M. on the settlement date
E 10:00 A.M. on the settlement date
F-G 2:00 P.M. on the settlement date
H-I 4:45 P.M. on the settlement date
J-K 5:00 P.M. on the settlement date
If a sale is to be settled more than one Business Day
after the sale date, (i) Settlement Procedure A shall be
completed by 5 PM on the Business Day following the sale
date or 11 AM on the Business Day prior to the
Settlement Date, whichever is earlier, and (ii)
Settlement Procedures B and C shall be completed as soon
as practicable but no later than 2 PM on the Business
Day prior to the Settlement Date.
Settlement Procedure H is subject to extension in
accordance with any extension of Fedwire closing
deadlines and in other events specified in SDFS
<PAGE>
operating procedure in effect on the Settlement Date.
If settlement of a Book-Entry Note is rescheduled or
canceled, the Company will instruct the Trustee to
deliver to DTC a cancellation message to such effect by
no later than 5:00 P.M. on the Business Day immediately
preceding the scheduled settlement date and the Trustee
will enter such order by 2:00 PT.M. through DTC's
Participant Terminal System.
Failure to
Settle: If the Trustee or the Agent fails to enter an SDFS
deliver order with respect to a Book-Entry Note
pursuant to Settlement Procedure "F", the Trustee may
deliver to DTC, through DTC's Participant Terminal
System, as soon as practicable, a withdrawal message
instructing DTC to debit such Note to the Trustee's
participant account. DTC will process the withdrawal
message, provided that the Trustee's participant
account contains a principal amount of the Global
Security representing such Note that is at least
equal to the principal amount to be debited. If a
withdrawal message is processed with respect to all
the Book-Entry Notes represented by a Global
Security, the Trustee will mark such Global Security
"canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the
Company. The CUSIP number assigned to such Global
Security shall, in accordance with CUSIP Service
Bureau procedures, be canceled and not immediately
reassigned. If a withdrawal message is processed
with respect to one or more, but not all, of the
Book-Entry Notes represented by a Global Security,
the Trustee will exchange such Global Security for
two Global Securities, one of which shall represent
the Book-Entry Notes for which a withdrawal message
has been processed and shall be canceled immediately
after issuance and the other of which shall represent
the Book-Entry Note previously represented by the
surrendered Global Security with respect to which a
<PAGE>
withdrawal message has not been processed and shall bear
the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a person,
including an indirect participant in DTC, acting on
behalf of such purchaser), such Participants and, in
turn, the Agent for such Note may enter SDFS deliver
orders through DTC's Participant Terminal System
reversing the orders entered pursuant to Settlement
Procedures "G" and "F", respectively. Thereafter, the
Trustee will deliver the withdrawal message and take the
related actions described in the preceding paragraph. If
such failure shall have occurred for any reason other
than default by the applicable Offering Agent to perform
its obligations hereunder or under the Distribution
Agreement, the Company will reimburse such Offering
Agent on an equitable basis for its reasonable loss of
the use of funds during the period when the funds were
credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may take
any actions in accordance with its SDFS operating
procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the
Book-Entry Notes to have been represented by a Global
Security, the Trustee will provide, in accor-dance 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.
<PAGE>
PART III: PROCEDURES FOR CERTIFICATED NOTES
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, the Certificated Notes will be issued in
denominations of $1,000 and integral multiples
thereof.
Payments of
Principal,
Premium, if any,
and Interest: Upon presentment and delivery of the Certificated Note,
the Paying Agent upon receipt of immediately available
funds from the Company will pay the principal of,
premium, if any, and interest on, each Certificated
Note on the Maturity Date in immediately available
funds. All interest payments on a Certificated Note,
other than interest due on the Maturity Date, will be
made by check mailed to the address of the person
entitled thereto as such address shall appear in the
security register or registers maintained by the
Trustee.
The Trustee will provide monthly to the Company a list
of the principal, premium, if any, and interest (to the
extent known) to be paid on Certificated Notes maturing
in the next succeeding month. The Paying Agent will be
responsible for withholding taxes on interest paid as
required by applicable law.
Certificated Notes presented to the Paying Agent on the
Maturity Date for payment will be canceled by the
Trustee. All canceled Certificated Notes held by the
Trustee shall be disposed of by the Trustee in
accordance with its customary procedures, and the
Trustee shall furnish to the Company a certificate with
respect to such disposition.
Settlement
Procedures: Settlement Procedures with regard to each Certificated
Note purchased by an Agent, as principal, or through an
Agent, as agent, shall be as follows:
<PAGE>
A. The Offering Agent will advise the Company by
telephone (and confirm in writing by facsimile or
other electronic transmission) of the following
Settlement information with regard to each
Certificated Note:
1. Exact name in which the Certificated Note(s)
is to be registered (the "Registered
Owner").
2. Exact address or addresses of the Registered
Owner for delivery, notices and payments of
principal, premium, if any, and interest.
3. Taxpayer identification number of the
Registered Owner.
4. Principal amount and Authorized
Denomination.
5. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment
Dates.
(b) Floating Rate Notes:
(i) Interest Rate Basis or
Bases.
(ii) Initial Interest Rate.
(iii)Spread and/or Spread
Multiplier, if any.
(iv) Initial Interest Reset Date and
Interest Reset Dates.
(v) Interest Payment
Dates.
(vi) Index Maturity, if
any.
<PAGE>
(vii) Maximum and/or Minimum Interest
Rates, if any.
(viii) Calculation Agent.
(ix) Other terms, if any.
6. Price to public of such Certificated Note
(or whether such Note is being offered at
varying prices relating to prevailing market
prices at time of resale as determined by
the Offering Agent).
7. Trade Date.
8. Settlement Date (Original Issue Date).
9. Maturity Date.
10. Redemption provisions, if any.
11. Repayment provisions, if any.
12. Net proceeds to the Company.
13. The Offering Agent's discount or
commission.
14. Whether such Note is being sold to the
Offering Agent as principal or to an
investor or other purchaser through the
Offering Agent acting as agent for the
Company.
15. Such other information specified with
respect to such Note (whether by Addendum or
otherwise).
B. After receiving such settlement information
from the Offering Agent, the Company will
advise the Trustee of the above settlement
information by facsimile transmission confirmed
by telephone. The Company will transmit to the
Trustee by telex or facsimile its written
request for the authentication and delivery of
such Certificated Note and the name
<PAGE>
of such Offering Agent. Each such request
by the Company shall constitute a
representation and warranty by the Company to
the Trustee that (i) the Certificated Note is
then, and at the time of issuance and sale
thereof will be, duly authorized for issuance
and sale by the Company, (ii) the Certificated
Note will conform with the terms of the
Indenture, and (iii) such Certificated Note,
when completed, authenticated and delivered
pursuant to the Indenture, will constitute the
valid and legally binding obligation of the
Company.
C. The Trustee will complete the Certificated Note
and send a copy thereof by facsimile to the
Company for verification.
In the event any Note is incorrectly prepared, the
Trustee shall promptly prepare a corrected Note in
exchange for such incorrectly prepared Note.
The Trustee will authenticate the Certificated
Note in the form approved by the Company and the
Offering Agent, and will make three copies thereof
(herein called "Stub 1", "Stub 2" and "Stub 3"):
1. Certificated Note with the Offering Agent's
confirmation, if traded on a principal
basis, or the Offering Agent's customer
confirmation, if traded on an agency basis.
2. Stub 1 for Trustee.
3. Stub 2 for Offering Agent.
4. Stub 3 for the Company.
D. With respect to each trade, the Trustee will
deliver the Certificated Note and Stub 2 thereof
to the Offering Agent at the following applicable
address:
<PAGE>
if to Salomon Smith Barney, to:
390 Greenwich Street, 4th Floor
New York, New York, 10013.
Attn: Howard Hiller
Tel: 212-723-6098
Fax: 212-723-8672; and
if to Banc of America Securities LLC, to:
Bank America Corporate Center
NC 1-007-07-01
100 North Tryon Street, 7th Floor
Charlotte, North Carolina 28255-001
Attn: Lynn T. McConnell
Tel: 704-386-6619
Fax: 704-388-9939;
; and the Trustee will keep Stub 1. The Offering
Agent will acknowledge receipt of the Certificated
Note through a broker's receipt and will keep Stub
2. Delivery of the Certificated Note will be made
only against such acknowledgment of receipt. Upon
determination that the Certificated Note has been
authorized, delivered and completed as
aforementioned, the Offering Agent will wire the
net proceeds of the Certificated Note after
deduction of its applicable Commission to the
Company pursuant to standard wire instructions
given by the Company.
E. In the case of a Certificated Note sold through
the Offering Agent, as agent, the Offering Agent
will deliver such Certificated Note (with the
confirmation) to the purchaser against payment in
immediately available funds.
F. The Trustee will send Stub 3 to the Company.
Settlement
Procedures
Timetable: For offers to purchase Certificated Notes accepted by
the Company, Settlement Procedures A through F set forth
above shall be completed as soon as possible following
the trade but not
<PAGE>
later than the respective times (New York City time) set
forth below:
SETTLEMENT
PROCEDURE TIME
--------- ----
A 11:00 A.M. on the trade date
or within one hour following
the trade
B 12:00 noon on the trade date
or within one hour following
the trade
C-D 2:15 PT.M. on Settlement Date
E 3:00 PT.M. on Settlement Date
F 5:00 PT.M. on Settlement Date
Failure to
Settle: In the case of Certificated Notes sold through the Offering
Agent, as agent, if an investor or other purchaser of a
Certificated Note from the Company shall either fail to
accept delivery of or make payment for such Certificated
Note on the date fixed for settlement, the Offering Agent
will forthwith notify the Trustee and the Company by
telephone, confirmed in writing, and return such
Certificated Note to the Trustee.
The Trustee, upon receipt of such Certificated Note from the
Offering Agent, will immediately advise the Company and the
Company will promptly arrange to credit the account of the
Offering Agent in an amount of immediately available funds
equal to the amount previously paid to the Company by such
Offering Agent in settlement for such Certificated Note. Such
credits will be made on the Settlement Date if possible, and
in any event not later than the Business Day following the
Settlement Date; provided that the Company has received notice
on the same day. If such failure shall have occurred for any
reason other than failure by such Offering Agent to perform
its obligations hereunder or under the Distribution Agreement,
the Company will reimburse such Offering Agent on an equitable
basis for its reasonable loss of the use of funds during the
period when the funds were credited to
<PAGE>
the account of the Company. Immediately upon receipt of the
Certificated Note in respect of which the failure occurred,
the Trustee will cancel and dispose of such Certificated Note
in accordance with its customary procedures, make appropriate
entries in its records to reflect the fact that such
Certificated Note was never issued, and accordingly notify in
the Company writing.
<PAGE>
EXHIBIT B
Pennsylvania Electric Company
Medium-Term Notes
TERMS AGREEMENT
----------- ---, 199
Pennsylvania Electric Company
c/o GPU Service, Inc.
310 Madison Avenue
Morristown, New Jersey 07962-1957
Attention: Treasurer
Subject in all respects to the terms and conditions of the Selling
Agency Agreement (the "Agreement") dated July 30, 1999, between you and each of
Salomon Smith Barney Inc. and Banc of America Securities LLC, the undersigned
agrees to purchase the following Notes of Pennsylvania Electric Company:
Aggregate Principal Amount:
Interest Rate:
Maturity Date:
Redemption Dates:
Record Dates:
Purchase Price: % of Principal Amount [plus accrued interest from
---------- --, 199 ]
Purchase Date and Time:
Modification, if any, in
the requirements to deliver
the documents specified in
Section 6(b) of the
Agreement:
Period during which additional Notes may not be sold pursuant to Section
4(m) of the Agreement:
Other terms:
[Purchaser]
By:
--------------------------
Accepted:
By:
-------------------------
Title:
