-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SmC1o0ZkdTKQPMlhdLWQn8HRnGgX4ZeMb5G9erus5SO8FoI7yYLUvcoiZ3pcfpNL /wC5ED7Z462VbpGx9hcyCQ== 0000893220-97-001943.txt : 19971217 0000893220-97-001943.hdr.sgml : 19971217 ACCESSION NUMBER: 0000893220-97-001943 CONFORMED SUBMISSION TYPE: U-1/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19971216 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONECTIV INC CENTRAL INDEX KEY: 0001029590 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 510379417 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1/A SEC ACT: SEC FILE NUMBER: 070-09095 FILM NUMBER: 97738984 BUSINESS ADDRESS: STREET 1: 800 KING STREET P O BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19801 BUSINESS PHONE: 3024293017 MAIL ADDRESS: STREET 1: 800 KING ST STREET 2: P O BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19801 U-1/A 1 AMEND #2 TO FORM U-1, DELMARVA POWER & LIGHT CO. 1 Page 1 As Filed with the Securities and Exchange Commission on December 16,1997 File No. 70-9095 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------------------ AMENDMENT NO.2 TO APPLICATION-DECLARATION ON FORM U-1 UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ------------------------------------------ CONECTIV, INC. DELMARVA POWER & LIGHT COMPANY SUPPORT CONECTIV, INC.(1, 2) DELMARVA INDUSTRIES, INC. DELMARVA ENERGY CO. 800 King Street Wilmington, DE 19899 DELMARVA CAPITAL INVESTMENTS, INC. ATLANTIC CITY ELECTRIC COMPANY CONECTIV SERVICES, INC. DEEPWATER OPERATING COMPANY CONECTIV COMMUNICATIONS, INC. ATLANTIC ENERGY ENTERPRISES, INC. DELMARVA SERVICES COMPANY ATLANTIC ENERGY INTERNATIONAL, INC. DCI I, INC. 6801 Black Horse Pike DCI II, INC. Egg Harbor Township, NJ 08234 DELMARVA CAPITAL TECHNOLOGY CO. DCTC-BURNEY, INC. ATLANTIC GENERATION, INC. DELMARVA CAPITAL REALTY COMPANY ATLANTIC SOUTHERN PROPERTIES, INC. CHRISTIANA CAPITAL MANAGEMENT, INC. ATE INVESTMENT, INC. POST AND RAIL FARMS, INC. ATLANTIC THERMAL SYSTEMS, INC. DELMARVA OPERATING SERVICES CO. COASTALCOMM, INC. DELSTAR OPERATING COMPANY ATLANTIC ENERGY TECHNOLOGY, INC. DELWEST OPERATING COMPANY BINGHAMTON GENERAL, INC. DELCAL OPERATING COMPANY BINGHAMTON LIMITED, INC. CONECTIV SOLUTIONS, INC. PEDRICK LIMITED, INC. CONECTIV ENTERPRISES, INC.(1) PEDRICK GENERAL, INC. CONECTIV ENERGY, INC.(1) VINELAND LIMITED, INC. 252 Chapman Road VINELAND GENERAL, INC. P.O. Box 6066 ATLANTIC JERSEY THERMAL SYSTEMS, INC. Newark, DE 19714 ATS OPERATING SERVICES, INC. THE EARTH EXCHANGE, INC. ATLANTIC PAXTON COGENERATION, INC. 5100 Harding Highway Mays Landing, NJ 08330 ----------------------------------------------------------- (Names of companies filing this statement and addresses of principal executive offices) CONECTIV, INC. ----------------------------------------------------------- (Name of top registered holding company parent) 2 Page 2 Barbara S. Graham Michael J. Barron President Vice President Conectiv, Inc. Conectiv, Inc. 800 King Street 6801 Black Horse Pike Wilmington, Delaware 19899 Egg Harbor Township, NJ 08234 ----------------------------------------------------------- (Names and addresses of agents for service) The Commission is requested to send copies of all notices, orders and communications in connection with this Application-Declaration to: Dale G. Stoodley, Esq. James E. Franklin II, Esq. Joyce Koria Hayes, Esq. Delmarva Power & Light Company Atlantic Energy, Inc. 7 Graham Court 800 King Street 6801 Black Horse Pike Newark, DE 19711 Wilmington, DE 19899 Egg Harbor Township, NJ 08234
- ------------------------ (1) Companies to formed prior to Merger (2) To be renamed Conectiv Resource Partners, Inc. 3 Page 3 The Application-Declaration as previously filed is hereby amended as follows: ITEM 2. FEES, COMMISSIONS AND EXPENSES (a) State (1) the fees, commissions and expenses paid or incurred, or to be paid or incurred, directly or indirectly, in connection with the proposed transaction by the applicant or declarant or any associate company thereof, and (2) if the proposed transaction involves the sale of securities at competitive bidding, the fees and expenses to be paid to counsel selected by applicant or declarant to act for the successful bidder. Estimated Legal Fees and Expenses $20,000 Estimated Miscellaneous Expenses 10,000 --------- Total $30,000
*The above fees do not include the expenses for the public issuance of long-term debt and equity securities. As noted previously, Conectiv proposes that such fees be capped at 5% of the issuance amount. ITEM 6. EXHIBITS (a) Exhibits A-1 Restated Certificate of Incorporation of Conectiv (previously filed) A-2 Form of Conectiv Indenture including Form of Debenture and Form of Medium - Term Note (filed herewith) A-3 Forms of Conectiv Common Stock Certificates (filed herewith) A-4 Form of Conectiv Commercial Paper Note (previously filed) A-5 Form of Bid Note Agreement (filed herewith) A-6 Form of System Money Pool Evidence of Deposit (previously filed) A-7 Form of System Money Pool Short-Term Grid Note (previously filed) A-8 Draft Investment Guidelines (previously filed) A-9 Form of Money Pool Agreement (filed herewith) B-1 Form of Standard Conectiv Underwriting Agreement (Common Stock) (filed herewith) 4 Page 4 B-2 Form of Standard Conectiv Underwriting Agreement (Debt) (filed herewith) B-3 Form of Standard Conectiv Master Distribution Agreement (Medium-Term Notes) (filed herewith) B-4 Summary of Terms of Conectiv Incentive Compensation Plan (incorporated by reference to the filing on Form S-4 (File No. 333-18843) dated December 26, 1996 B-5 Conectiv Dividend Reinvestment Plan (to be filed by amendment via incorporation by reference) F-1 Opinion of Counsel (to be filed by amendment) H-1 Proposed Notice (previously filed) H-2 Financial Data Schedules (previously filed) I-1 Summary of existing financing arrangements for Delmarva and subsidiaries (previously filed). I-2 Summary of existing financing arrangements for Atlantic and subsidiaries (previously filed). 5 Page 5 SIGNATURE Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned companies have duly caused this Amendment No. 2 to Form U-1 to be signed on their behalf by the undersigned thereunto duly authorized. The signatures of the applicants and of the persons signing on their behalf are restricted to the information contained in this application which is pertinent to the application of the respective companies. DATE: CONECTIV, INC. December 16, 1997 /s/ B.S. Graham - ----------------- ---------------------------------- President DELMARVA POWER & LIGHT COMPANY DELMARVA INDUSTRIES, INC. DELMARVA ENERGY COMPANY DELMARVA CAPITAL INVESTMENTS, INC. CONECTIV SERVICES, INC. DCI I, INC. DCI II, INC. DELMARVA CAPITAL TECHNOLOGY COMPANY DCTC-BURNEY, INC. DELMARVA CAPITAL MANAGEMENT, INC. POST AND RAIL FORMS, INC. DELMARVA OPERATING SERVICES COMPANY DELSTAR OPERATING COMPANY DELWEST OPERATING COMPANY DELCAL OPERATING COMPANY December 16, 1997 /s/ D. P. Connelly - ----------------- ------------------------------------ Secretary CONECTIV SOLUTIONS, INC. December 16, 1997 /s/ H. E. Cosgrove - ----------------- ------------------------------------ Chairman and Chief Executive Officer 6 Page 6 ATLANTIC CITY ELECTRIC COMPANY December 16, 1997 /s/ L. M. Walters - ----------------- ------------------------------------ Vice President, Treasurer & Assistant Secretary DEEPWATER OPERATING COMPANY December 16, 1997 /s/ L. M. Walters - ----------------- ------------------------------------ Treasurer ATLANTIC ENERGY ENTERPRISES, INC. December 16, 1997 /s/ F. E. DiCola - ----------------- ------------------------------------ Senior Vice President and Treasurer ATLANTIC ENERGY INTERNATIONAL, INC. December 16, 1997 /s/ J. E. Franklin II - ----------------- ------------------------------------ Secretary ATLANTIC GENERATION, INC. December 16, 1997 /s/ F. E. DiCola - ----------------- ------------------------------------ Treasurer and Secretary ATLANTIC SOUTHERN PROPERTIES, INC. December 16, 1997 /s/ F. E. DiCola - ----------------- ------------------------------------ Vice President and Treasurer ATE INVESTMENT, INC. December 16, 1997 /s/ F.E. DiCola - ----------------- ---------------------------------- Vice President and Treasurer 7 Page 7 ATLANTIC THERMAL SYSTEMS, INC. December 16, 1997 /s/ F. E. DiCola - ----------------- ------------------------------------- President and Chief Executive Officer COASTAL COMM, INC. December 16, 1997 /s/ R. L. Aveyard - ----------------- ------------------------------------- President and Treasurer ATLANTIC ENERGY TECHNOLOGY, INC. December 16, 1997 /s/ F. E. DiCola - ----------------- ------------------------------------- Treasurer BINGHAMTON GENERAL, INC. BINGHAMTON LIMITED, INC. PEDRICK LIMITED, INC. PEDRICK GENERAL, INC. VINELAND LIMITED, INC. VINELAND GENERAL, INC. December 16, 1997 /s/ F. E. DiCola - ----------------- ------------------------------------- Vice President ATLANTIC JERSEY THERMAL SYSTEMS, INC. December 16, 1997 /s/ F. E. DiCola - ----------------- ------------------------------------- President ATS OPERATING SERVICES, INC. December 16, 1997 /s/ F. E. DiCola - ----------------- ------------------------------------- President THE EARTH EXCHANGE, INC. December 16, 1997 /s/ F. E. DiCola - ----------------- ------------------------------------- President 8 Page 8 ATLANTIC PAXTON COGENERATION, INC. December 16, 1997 /s/ F. E. DiCola - ----------------- ------------------------------------- President 9 Page 1 EXHIBIT INDEX A-2 Form of Conectiv Indenture including Form of Debenture and Form of Medium-Term Note A-3 Forms of Conectiv Stock Certificates A-5 Form of Bid Note A-9 Form of Money Pool Agreement B-1 Form of Standard Conectiv Underwriting Agreement (Common Stock) B-2 Form of Standard Conectiv Underwriting Agreement (Debt) B-3 Form of Standard Conectiv Master Distribution Agreement (Medium-Term Notes) EX-99.A2 2 FORM OF CONECTIV INDENTURE 1 EXHIBIT A-2 CONECTIV Senior Debt Securities INDENTURE Dated as of _________, 19__ Trustee 2 CROSS-REFERENCE TABLE CONECTIV AND ___________, TRUSTEE INDENTURE DATED ___________, 199_
TIA Section Indenture Section - ----------- ----------------- 310 (a)(1)...............................................................................6.10 (a)(2)...............................................................................6.10 (a)(3)...............................................................................N.A. (a)(4)...............................................................................N.A. (b).....................................................................6.08, 6.10, 12.02 (c)..................................................................................N.A. 311 (a)..................................................................................6.11 (b)..................................................................................6.11 (c)..................................................................................N.A. 312 (a)..................................................................................2.07 (b).................................................................................12.03 (c).................................................................................12.03 313 (a)..................................................................................6.06 (b)..................................................................................6.06 (c)...........................................................................6.06, 12.02 (d)..................................................................................6.06 314 (a).....................................................................3.02, 3.03, 12.02 (b)...................................................................................N.A (c)(1)..............................................................................12.05 (c)(2)........................................................................6.02, 12.05 (c)(3)...............................................................................N.A. (d)..................................................................................N.A. (e).................................................................................12.06 (f)..................................................................................N.A. 315 (a)...............................................................................6.01(b) (b)...........................................................................6.05, 12.02 (c)...............................................................................6.01(a) (d)...............................................................................6.01(c) (e)..................................................................................5.11 316 (a)(1)(A)............................................................................5.05 (a)(1)(B)............................................................................5.04 (a)(2)...............................................................................N.A. (b)..................................................................................5.07 317 (a)(1)...............................................................................5.08 (a)(2)...............................................................................5.09 (b)..................................................................................2.06 318 (a).................................................................................12.01
2 3 TABLE OF CONTENTS
Page ---- RECITALS.....................................................................................1 ARTICLE 1 Definitions and Incorporation by Reference SECTION 1.01. Definitions...........................................................1 SECTION 1.02. Other Definitions.....................................................4 SECTION 1.03. Incorporation by Reference of Trust Indenture Act.....................4 SECTION 1.04. Rules of Construction.................................................4 ARTICLE 2 The Securities SECTION 2.01. Amount; Issuable in Series............................................5 SECTION 2.02. Denominations.........................................................7 SECTION 2.03. Execution, Authentication and Delivery................................8 SECTION 2.04. Temporary Securities..................................................9 SECTION 2.05. Registrar and Paying Agent...........................................10 SECTION 2.06. Paying Agent to Hold Money in Trust..................................10 SECTION 2.07. Securityholder Lists.................................................11 SECTION 2.08. Transfer and Exchange................................................11 SECTION 2.09. Replacement Securities...............................................12 SECTION 2.10. Outstanding Securities...............................................12 SECTION 2.11. Cancellation.........................................................13 SECTION 2.12. Default Interest.....................................................13 SECTION 2.13. Computation of Interest..............................................13 ARTICLE 3 Covenants SECTION 3.01. Payment of Securities................................................14 SECTION 3.02. SEC Reports..........................................................14 SECTION 3.03. Compliance Certificate...............................................14
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Page ---- ARTICLE 4 Successor Company SECTION 4.01. When Company May Merge or Transfer Assets............................14 SECTION 4.02. Successor Entity Substituted.........................................15 ARTICLE 5 Defaults and Remedies SECTION 5.01. Events of Default....................................................15 SECTION 5.02. Acceleration.........................................................16 SECTION 5.03. Other Remedies.......................................................17 SECTION 5.04. Waiver of Past Defaults..............................................17 SECTION 5.05. Control by Majority..................................................17 SECTION 5.06. Limitation on Suits..................................................18 SECTION 5.07. Rights of Holders To Receive Payment.................................18 SECTION 5.08. Collection Suit by Trustee...........................................18 SECTION 5.09. Trustee May File Proofs of Claim.....................................18 SECTION 5.10. Priorities...........................................................19 SECTION 5.11. Undertaking for Costs................................................19 SECTION 5.12. Waiver of Stay or Extension Laws.....................................20 ARTICLE 6 Trustee SECTION 6.01. Duties of Trustee....................................................20 SECTION 6.02. Rights of Trustee....................................................21 SECTION 6.03. Individual Rights of Trustee.........................................22 SECTION 6.04. Trustee's Disclaimer.................................................22 SECTION 6.05. Notice of Defaults...................................................22 SECTION 6.06. Reports by Trustee to Holders........................................22 SECTION 6.07. Compensation and Indemnity...........................................22 SECTION 6.08. Replacement of Trustee...............................................23 SECTION 6.09. Successor Trustee by Merger..........................................24 SECTION 6.10. Eligibility; Disqualification........................................24 SECTION 6.11. Preferential Collection of Claims Against Company....................25
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Page ---- ARTICLE 7 Discharge of Securities and Indenture SECTION 7.01. Satisfaction and Discharge of Securities.............................25 SECTION 7.02. Satisfaction and Discharge of Indenture..............................27 SECTION 7.03. Application of Trust Money...........................................28 ARTICLE 8 Amendments SECTION 8.01. Without Consent of Holders...........................................29 SECTION 8.02. With Consent of Holders..............................................30 SECTION 8.03. Compliance with Trust Indenture Act..................................31 SECTION 8.04. Revocation and Effect of Consent and Waivers.........................31 SECTION 8.05. Notation on or Exchange of Securities................................31 SECTION 8.06. Trustee To Sign Amendments...........................................31 ARTICLE 9 Redemption SECTION 9.01. Applicability........................................................32 SECTION 9.02. Notice to Trustee....................................................32 SECTION 9.03. Selection of Securities To Be Redeemed...............................32 SECTION 9.04. Notice of Redemption.................................................33 SECTION 9.05. Effect of Notice of Redemption.......................................33 SECTION 9.06. Deposit of Redemption Price..........................................34 SECTION 9.07. Securities Redeemed in Part..........................................34 ARTICLE 10 Sinking Funds SECTION 10.01. Applicability.......................................................34 SECTION 10.02. Satisfaction of Sinking Fund Payment with Securities................34 SECTION 10.03. Redemption of Securities for Sinking Fund...........................35
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Page ---- ARTICLE 11 Meetings of Holders; Actions without Meeting SECTION 11.01. Purposes for Which Meetings May Be Called...........................36 SECTION 11.02. Call, Notice and Place of Meetings..................................36 SECTION 11.03. Persons Entitled to Vote at Meetings................................37 SECTION 11.04. Quorum; Action......................................................37 SECTION 11.05. Attendance at Meeting; Determination of Voting Rights; Conduct and Adjournment of Meetings.................................38 SECTION 11.06. Counting Votes and Recording Action of Meetings.....................39 SECTION 11.07. Action without Meeting..............................................39 ARTICLE 12 Miscellaneous SECTION 12.01. Trust Indenture Act Controls........................................40 SECTION 12.02. Notices.............................................................40 SECTION 12.03. Communication by Holders with Other Holders.........................40 SECTION 12.04 Acts of Holders.....................................................41 SECTION 12.05. Certificate and Opinion as to Conditions Precedent..................42 SECTION 12.06. Statements Required in Certificate or Opinion.......................43 SECTION 12.07. When Securities Disregarded.........................................43 SECTION 12.08. Rules by Trustee, Paying Agent and Registrar........................43 SECTION 12.09. Legal Holidays......................................................44 SECTION 12.10. Governing Law.......................................................44 SECTION 12.11. No Recourse Against Others..........................................44 SECTION 12.12. Successors..........................................................44 SECTION 12.13. Multiple Originals..................................................44 SECTION 12.14. Table of Contents; Headings.........................................44 TESTIMONIUM.................................................................................45 EXECUTION...................................................................................45 ACKNOWLEDGMENTS.............................................................................46
6 7 THIS INDENTURE dated _____________________________ between Conectiv, a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the "Company"), having its principal office at 800 King Street, Wilmington, Delaware 19899, and __________, a _____________________ organized and existing under the laws of ___________________ (hereinafter called the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of unsecured debentures, notes or other evidences of indebtedness (herein called the "Securities"), to be issued in one or more series as contemplated herein. All things necessary to make this Indenture a valid agreement of the Company in accordance with its terms have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all holders of the Securities as follows: ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. Definitions "Affiliate" of any specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. For the purposes of this definition, "control" when used with respect to any specified person means the power to direct the management and policies of such person directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Board of Directors" means the Board of Directors of the Company or any committee thereof duly authorized to act on behalf of such Board of Directors in respect of matters related to this Indenture. "Board Resolution" means a resolution duly adopted by the Board of Directors, a copy of which shall be certified by the Secretary or an Assistant Secretary as being in full force and effect on the date of such certification and delivered to the Trustee. 8 "Business Day" means, unless otherwise specified pursuant to Section 2.01, each day which is not a Legal Holiday. "Bylaws" means the bylaws of the Company as amended from time to time. "Company" means Conectiv, a Delaware corporation, unless and until a successor replaces it pursuant to Article 4 and, thereafter, means the successor (or any subsequent successor pursuant to said Article) and, for purposes of any provision contained herein and required by the TIA, each other Obligor on the Securities. "Company Request", "Request of the Company", "Company Order" or "Order of the Company" means a written request or order signed in the name of the Company by an Officer and delivered to the Trustee. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default as more fully described in Section 5.01 of this Indenture. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Holder" or "Securityholder" means the person in whose name a Security is registered on the Registrar's books. "Indenture" means this Indenture, as originally executed and delivered and as it may from time to time be amended or supplemented by one or more indentures or other instruments supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of a particular series of Securities established as contemplated by Section 2.01. "Interest Payment Date" means the date specified in the Securities as the fixed date on which interest is due and payable. "Officer" means the Chairman of the Board, the President, any Vice President, the Treasurer, the Secretary, the Controller, any Assistant Treasurer, any Assistant Secretary, any Assistant Controller, or any officers of the Company designated by Board Resolution or the Bylaws. "Officer's Certificate" means a certificate signed by an Officer. "Opinion of Counsel" means a written opinion from legal counsel, who may be an employee of or counsel to the Company (or any Subsidiary or Affiliate) or other counsel acceptable to the Trustee. "Original Issue Discount Security" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 5.02. 2 9 "Principal Amount" of a Security means the principal amount of the Security plus the premium, if applicable, payable on the Security which is due or overdue or is to become due at the relevant time. "SEC" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, as amended, or, if at any time after the date of the execution and delivery of this Indenture such Commission is not existing and performing the duties now assigned to it under the TIA, then the body, if any, performing such duties at such time. "Securities" means the Securities issued under this Indenture. "Subsidiary" means a corporation or limited liability company of which a majority of the capital stock, having voting power under ordinary circumstances to elect directors, is owned by the Company and/or one or more Subsidiaries. "Terms" means the maturity date, interest rate or method of determining the interest rate, interest payment dates, redemption provisions (optional or mandatory) and any other terms of any Securities established pursuant to Sections 2.01 and 2.03. "TIA" means, as of any time, the Trust Indenture Act of 1939, or any successor statute, as in effect at such time. "Trustee" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor. "Trust Officer" means any officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "U.S. Government Obligations" means (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States entitled to the benefit of the full faith and credit thereof; and (b) certificates, depositary receipts or other instruments which evidence a direct ownership interest in obligations described in clause (a) above or in any specific interest or principal payments due in the respect thereof; provided, however, that the custodian of such obligations or specific interest or principal payments shall be a bank or trust company (which may include the Trustee or any Paying Agent) subject to federal or state supervision or examination with a combined capital and surplus of at least $50,000,000; and provided, further, that except as may be otherwise required by law, such custodian shall be obligated to pay to the holders of such certificates, depositary receipts or other instruments the full amount received by such custodian in respect of such obligations or specific payment and shall not be permitted to make any deduction therefrom. 3 10 SECTION 1.02. Other Definitions Defined in Term..........................................................Section - --------------- ------- "Act"......................................................................12.04 "Bankruptcy Law"............................................................5.01 "Custodian".................................................................5.01 "Event of Default"..........................................................5.01 "Legal Holiday"............................................................12.09 "Mandatory Sinking Fund Payment"...........................................10.01 "Notice of Default".........................................................5.01 "Optional Sinking Fund Payment"............................................10.01 "Paying Agent"..............................................................2.05 "Registrar".................................................................2.05 SECTION 1.03. Incorporation by Reference of Trust Indenture Act Whenever this Indenture refers to a provision of the TIA or a provision of the TIA provides that an indenture to be qualified thereunder shall be deemed to include such provision, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings as if fully set forth herein and in any supplement hereto: "Commission" means the SEC. "Obligor" on the Securities means the Company and any other obligor on the Securities. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule have the meanings assigned to them by such definitions. SECTION 1.04. Rules of Construction Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect from time to time; (3) "including" means including, without limitation; 4 11 (4) "person" means any individual, corporation, partnership, limited liability partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. (5) "or" is not exclusive; (6) words in the singular include the plural and words in the plural include the singular; and (7) the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with generally accepted accounting principles and accretion of principal on such security shall not be deemed to be the issuance of Debt. ARTICLE 2 THE SECURITIES SECTION 2.01. Amount; Issuable in Series The aggregate Principal Amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series and Securities of the same series may have different Terms. There shall be established in a Board Resolution or a supplemental indenture or in an Officer's Certificate pursuant to a Board Resolution or supplemental indenture, prior to the issuance of Securities of any series, except as contemplated by the fourth paragraph of Section 2.03: (1) the title of the Securities of the series (which shall distinguish the Securities of the series from all Securities of other series); (2) any limit upon the aggregate Principal Amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Sections 2.04, 2.08, 2.09, 8.05 and 9.07); (3) the date or dates on which the principal and premium, if applicable, of any of the Securities of the series are payable or the method of determination thereof; 5 12 (4) the rate or rates, or the method of determination thereof, at which any of the Securities of the series shall bear interest, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the regular record date for the interest payable on any Interest Payment Date; (5) the place or places where the principal of and interest, if any, on any of the Securities of the series shall be payable and the office or agency for the Securities of the series maintained by the Company pursuant to Section 2.05; (6) the period or periods within which, the price or prices at which and the terms and conditions upon which any of the Securities of the series may be redeemed, in whole or in part, at the option of the Company; (7) the terms of any sinking fund and the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series shall be redeemed or purchased, in whole or in part; (8) if other than denominations authorized by Section 2.02, the denominations in which the Securities of the series shall be issuable; (9) if other than the Principal Amount thereof, the portion of the Principal Amount of any of the Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 5.02; (10) any deletions or modifications of or additions to the Events of Default set forth in Section 5.01 or covenants of the Company set forth in Article 3 pertaining to the Securities of the series; (11) the currency or currencies, including composite currencies, in which payment of the principal of and premium, if any, and interest, if any, on the Securities of such series shall be payable (if other than in U.S. dollars); (12) the forms of the Securities of the series; (13) any exceptions to Section 12.09 or variation in the definition of Business Day, with respect to the Securities of such series; 6 13 (14) whether the Securities of the series shall be issued in whole or in part in the form of one or more global Securities and, in such case, (i) the depository for such global Security or Securities, (ii) any limitations on the rights of the Holder or Holders of such Securities to transfer or exchange the same or to obtain the registration of transfer thereof, (iii) any limitations on the rights of the Holder or Holders thereof to obtain certificates therefor in definitive form in lieu of temporary form and (iv) any and all other matters incidental to such Securities; (15) if Securities of the series are to be convertible into other securities, the Terms of such conversion; and (16) any other Terms of any of the Securities of the series. All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above, or the Company Order contemplated by the fourth paragraph of Section 2.03, and set forth in the Officer's Certificate referred to above or in any such indenture supplemental hereto. At the option of the Company, interest on any series that bears interest may be paid by mailing a check to the address of, or making a wire transfer to the account of, any Holder as such address shall appear in the register maintained pursuant to Section 2.05. The Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). If any of the Terms of the series are established by action taken pursuant to a Board Resolution, except as to those contemplated by the fourth paragraph of Section 2.03, a copy of an appropriate record of such action together with such Board Resolution shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officer's Certificate setting forth the Terms of the series. SECTION 2.02. Denominations The Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 2.01. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and in any integral multiple thereof. Securities of each series shall be numbered, lettered or otherwise distinguished in such manner in accordance with such plan as the Officers of the Company executing the same may determine with the approval of the Trustee. 7 14 SECTION 2.03. Execution, Authentication and Delivery One Officer shall sign the Securities for the Company by manual or facsimile signature. The Company's seal shall be impressed, affixed, imprinted or reproduced on the Securities and may be in facsimile form. If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless. A Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. At any time after the execution and delivery of this Indenture, the Company may execute and deliver to the Trustee Securities of any series, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities; provided that, if all Securities of a series are not to be originally issued at one time, the Trustee shall authenticate and deliver Securities of such series for original issue from time to time in the aggregate Principal Amount established for such series pursuant to such procedures acceptable to the Trustee as may be specified from time to time by Company Order. The maturity date, original issuance date, interest rate and any other Terms of the Securities of such series shall be determined by or pursuant to such Company Order and procedures. If provided for in such procedures, such Company Order may authorize authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized agents, which instructions, if given orally, shall be promptly confirmed in writing. If the forms or Terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Section 2.01, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating: (a) that such forms and/or Terms have been established in conformity with the provisions of this Indenture; and (b) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms, subject to such exceptions as counsel may specify. 8 15 If such forms or Terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. Notwithstanding the provisions of Section 2.01 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officer's Certificate otherwise required pursuant to Section 2.01 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the time of authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued; provided that paragraph (a) of said Opinion of Counsel shall, in such case, read as follows: "(a) that such forms have been established in conformity with the provisions of this Indenture and the procedures for determining the Terms of such Securities as set forth in the procedures hereinabove referred to have been established in conformity with the provisions of this Indenture." SECTION 2.04. Temporary Securities. Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued, in registered form and with such appropriate insertions, omissions, substitutions and other variations as the Officers executing such Securities may determine, as evidenced conclusively by their execution of such Securities. Such temporary Securities may be in global form. If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company maintained pursuant to Section 2.05 for the purpose of exchanges of Securities of such series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like aggregate Principal Amount of definitive Securities of the same series and of like tenor or authorized denominations and having the same Terms and conditions. Until exchanged in full as hereinabove provided, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of the same series and of like tenor authenticated and delivered hereunder. 9 16 SECTION 2.05. Registrar and Paying Agent The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange (the "Registrar") and an office or agency where Securities may be presented for payment (the "Paying Agent"). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may have one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 6.07. The Company or any Subsidiary or Affiliate of the Company may act as Paying Agent, Registrar, co-registrar or transfer agent. The Company initially appoints the Trustee as Registrar and Paying Agent in connection with the Securities. SECTION 2.06. Paying Agent To Hold Money in Trust On or prior to each due date of the principal and interest on any Security, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal and interest when so becoming due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Securityholders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities and shall notify the Trustee of any default by the Company in making any such payment. If the Company or any Subsidiary or Affiliate of the Company acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of and premium, if any, or interest, if any, on any Security and remaining unclaimed for two years after such principal and premium, if any, or interest, if any, has become due and payable shall be paid to the Company on Company Request, or, if then held by the Company, shall be discharged from such trust; and, upon such payment or discharge, the Holder of such Security shall, as an unsecured general creditor and not as the Holder of an outstanding Security, look only to the Company for payment of the amount so due and payable and remaining unpaid, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon 10 17 cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such payment to the Company, may at the expense of the Company cause to be mailed, on one occasion only, notice to such Holder that such money remains unclaimed and that, after a date specified therein, which shall not be less than thirty (30) days from the date of such mailing, any unclaimed balance of such money then remaining will be paid to the Company. SECTION 2.07. Securityholder Lists The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least five Business Days before each ________ and __________ and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders. SECTION 2.08. Transfer and Exchange The Securities shall be issued in registered form and shall be transferable only upon the surrender of a Security with similar Terms of the same series for registration of transfer. When a Security is presented to the Registrar or a co-registrar with a request to register a transfer, the Registrar shall register the transfer as requested, subject to compliance with this paragraph. When Securities of a series are presented to the Registrar or a co-registrar with a request to exchange them for an equal Principal Amount of Securities of such series with similar Terms of other denominations, the Registrar shall make the exchange as requested, subject to such compliance. To permit registration of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities of the applicable series with similar Terms at the Registrar's or co-registrar's request. The Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. The Company shall not be required (i) to issue, register the transfer of or exchange Securities of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of that series selected for redemption under Section 9.03 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. 11 18 Prior to the due presentation for registration of transfer of any Security, the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar may deem and treat the person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected by notice to the contrary. SECTION 2.09. Replacement Securities If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security of the applicable series with similar Terms if the Holder satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Company, such Holder shall furnish evidence to their satisfaction of the destruction, loss or wrongful taking of any Security so claimed to be lost, destroyed or wrongfully taken, and an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss which any of them may suffer if a Security is replaced. The Company and the Trustee may charge the Holder for their expenses in replacing a Security. Every replacement Security is an additional obligation of the Company. SECTION 2.10. Outstanding Securities Securities outstanding at any time are all Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding. A Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security. If a Security is replaced pursuant to Section 2.09, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a bona fide purchaser. If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal, premium (if applicable) and interest payable on that date with respect to the Securities to be redeemed or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Securityholders on that date pursuant to the terms of this Indenture, then on and after that date such Securities cease to be outstanding and interest on them ceases to accrue. 12 19 In determining whether the Holders of the requisite Principal Amount of outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder the Principal Amount of an Original Issue Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 5.02. SECTION 2.11. Cancellation The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and destroy (subject to the record retention requirements of the Exchange Act) all Securities surrendered for registration of transfer, exchange, payment or cancellation and deliver a certificate of such destruction to the Company unless the Company directs the Trustee to deliver canceled Securities to the Company. The Company may not Issue new Securities to replace Securities it has redeemed, paid or delivered to the Trustee for cancellation. SECTION 2.12. Default Interest If the Company defaults in a payment of interest on the Securities, the Company shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful at the rate or rates prescribed therefor in the Securities) in any lawful manner. The Company may also pay the defaulted interest to the persons who are Securityholders on a subsequent special record date, which date shall be at least five Business Days prior to the payment date in which case the Company shall fix or cause to be fixed any such special record date and payment date, and, at least 15 days before any such special record date, the Company shall mail to each Securityholder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid. SECTION 2.13. Computation of Interest Except as otherwise specific as contemplated by Section 2.01 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a three hundred sixty (360) day year consisting of twelve (12) thirty (30) day months and, with respect to any period less than a full calendar month, on the basis of the actual number of days elapsed during such period. 13 20 ARTICLE 3 COVENANTS SECTION 3.01. Payment of Securities The Company shall promptly pay the principal of and interest on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal and interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Securityholders on that date pursuant to the terms of this Indenture. SECTION 3.02. SEC Reports The Company shall file with the Trustee, within 30 days after it files them with the SEC, copies of its annual report and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Company shall also comply with the other provisions of TIA Section 314(a)(1),(2) and (3). SECTION 3.03. Compliance Certificate The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company a certificate from its principal executive officer, principal financial officer or principal accounting officer stating that in the course of the performance by such signer of his duties as an officer of the Company he would normally have knowledge of any Default by the Company or any noncompliance with the conditions and covenants under the Indenture and whether or not he knows of any Default or any such noncompliance that occurred during such period. If such officer does, the certificate shall describe the Default or non-compliance, its status and what action the Company is taking or proposes to take with respect thereto. For purposes of this Section 3.03, such noncompliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. ARTICLE 4 SUCCESSOR COMPANY SECTION 4.01. When Company May Merge or Transfer Assets The Company shall not consolidate with or merge with or into, or convey or otherwise transfer, or lease, its assets as an entirety (or substantially as an entirety) to, any person, unless: 14 21 (i) the resulting, surviving or transferee person (if not the Company) shall be a person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of the Company under the Securities and this Indenture; (ii) immediately after giving effect to such transaction no Default shall have occurred and be continuing; and (iii) the Company shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, merger, transfer, or lease and such supplemental indenture comply with this Indenture. SECTION 4.02. Successor Entity Substituted Upon any consolidation by the Company with or merger by the Company into any other person or any conveyance or other transfer, or lease, of the assets of the Company as an entirety (or substantially as an entirety) in accordance with Section 4.01, the successor person formed by such consolidation or into which the Company is merged or to which such conveyance or other transfer, or lease, is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor entity shall be relieved of all obligations and covenants under this Indenture and the Securities. ARTICLE 5 DEFAULTS AND REMEDIES SECTION 5.01. Events of Default An "Event of Default" occurs if: (1) the Company defaults in any payment of interest on any Security when the same becomes due and payable and such default continues for a period of 60 days; (2) the Company defaults in the payment of the principal of any Security when the same becomes due and payable at its stated maturity, upon declaration or otherwise; (3) the Company fails to comply with any of its agreements in the Securities or this Indenture (other than those referred to in (1) or (2) above) and such failure continues for 60 days after the notice specified below; 15 22 (4) the Company pursuant to or within the meaning of any Bankruptcy Law: (a) commences a voluntary case; (b) consents to the entry of an order for relief against it in an involuntary case; (c) consents to the appointment of a Custodian of it or for any substantial part of its property; or (d) makes a general assignment for the benefit of its creditors; or (5) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (a) is for relief against the Company in an involuntary case; (b) appoints a Custodian of the Company or for any substantial part of its property; or (c) orders the winding up or liquidation of the Company; and the order or decree remains unstayed and in effect for 60 days. The term "Bankruptcy Law" means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. A Default under clause (3) is not an Event of Default until the Trustee or the Holders of at least 33% in principal amount of the Securities notify the Company of the Default and the Company does not cure such Default within the time specified after receipt of such Notice. Such Notice must specify the Default, demand that it be remedied and state that such notice is a "Notice of Default". The Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice in the form of an Officer's Certificate of any event which with the giving of notice and the lapse of time would become an Event of Default under clause (3), its status and what action the Company is taking or proposes to take with respect thereto. SECTION 5.02. Acceleration If an Event of Default (other than an Event of Default specified in Section 5.01(4) or (5)) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 33% in principal amount of the Securities by notice to the Company and the Trustee, may declare the principal of (or, in connection with Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such Securities) and accrued interest on all 16 23 the Securities to be due and payable. Upon such a declaration, such principal (or portion thereof) and interest shall be due and payable immediately. If an Event of Default specified in Section 5.01(4) or (5) occurs and is continuing, the principal of and interest on all the Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Securityholders. If all existing Events of Default have been cured or waived, except nonpayment of principal or interest that has become due solely because of acceleration, any such acceleration and its consequences shall be automatically rescinded unless such rescission would conflict with any judgment or decree. No such rescission shall affect any subsequent Default or impair any right consequent thereto. SECTION 5.03. Other Remedies If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. SECTION 5.04. Waiver of Past Defaults The Holders of a majority in principal amount of the Securities by notice to the Trustee may waive an existing Default and its consequences except (1) a Default in the payment of the principal of or interest on a Security or (2) a Default in respect of a provision that under Section 8.02 cannot be amended without the consent of each Securityholder affected. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right. SECTION 5.05. Control by Majority The Holders of a majority in Principal Amount of the Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 6.01, that the Trustee determines is unduly prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. 17 24 SECTION 5.06. Limitation on Suits A Securityholder may not pursue any remedy with respect to this Indenture or the Securities unless: (1) the Holder gives to the Trustee written notice stating that an Event of Default is continuing; (2) the Holders of at least 33% in Principal Amount of the Securities make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee reasonable security or indemnity against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and (5) the Holders of a majority of Principal Amount of the Securities do not give the Trustee a direction inconsistent with the request during such 60-day period. A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. SECTION 5.07. Rights of Holders To Receive Payment Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on the Securities held by such Holder, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 5.08. Collection Suit by Trustee If an Event of Default in payment of interest or principal specified in Section 5.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal and interest remaining unpaid (together with interest on such unpaid interest as provided in Section 3.01, to the extent lawful) and the amounts provided for in Section 6.07. SECTION 5.09. Trustee May File Proofs of Claim The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders allowed in any judicial proceedings relative to the Company, its creditors or its property and, unless 18 25 prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 6.07. SECTION 5.10. Priorities If the Trustee collects any money pursuant to this Article 5, it shall pay out the money in the following order: FIRST: to the Trustee for amounts due under Section 6.07; SECOND: to Securityholders for amounts due and unpaid on the Securities for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and THIRD: to the Company. The Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section. At least 15 days before such record date, the Company shall mail to each Securityholder and the Trustee a notice that states the record date, the payment date and amount to be paid. SECTION 5.11. Undertaking for Costs In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 5.07 or a suit by Holders of more than 10% in Principal Amount of the Securities. 19 26 SECTION 5.12. Waiver of Stay or Extension Laws The Company (to the extent it may lawfully do so) shall not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE 6 TRUSTEE SECTION 6.01. Duties of Trustee (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) Except during the continuance of an Event of Default: (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) this paragraph does not limit the effect of paragraph (b) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and 20 27 (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.05. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. (e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. (f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section and to the provisions of the TIA. SECTION 6.02. Rights of Trustee (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officer's Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officer's Certificate or Opinion of Counsel, subject to Section (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers. (e) The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. 21 28 SECTION 6.03. Individual Rights of Trustee The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 6.10 and 6.11. SECTION 6.04. Trustee's Disclaimer The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company's use of the proceeds from the Securities, and it shall not be responsible for any statement of the Company in the Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee's certificate of authentication. SECTION 6.05. Notice of Defaults If a Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each Securityholder notice of the Default within 90 days after it occurs. Except in the case of a Default in payment of principal of or interest on any Security (including payments pursuant to the mandatory redemption provisions of such Security), the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Securityholders. SECTION 6.06. Reports by Trustee to Holders Prior to November 1 in each year, the Trustee shall mail to each Securityholder a brief report dated as of the preceding September 1 that complies with TIA Section 313(a), if so required by such Section of the TIA. The Trustee also shall comply with TIA Section 313(b). A copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and each stock exchange on which the Securities are listed. The Company agrees to notify promptly the Trustee whenever the Securities become listed on any stock exchange and of any delisting thereof. SECTION 6.07. Compensation and Indemnity The Company shall pay to the Trustee from time to time reasonable compensation for its services, including those arising in the Trustee's performance of its duties under Sections 5.02, 5.03 and 5.08 hereof, and to the extent permitted by law, Section 5.09 hereof. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its 22 29 services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee's agents, counsel, accountants and experts. The Company shall indemnify the Trustee against any and all loss, liability or expense (including attorneys' fees) incurred by it in connection with the administration of this trust and the performance of its duties hereunder. The Trustee shall notify the Company promptly of any claim for which it believes it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not reimburse any expense or indemnify against any loss, liability or expense to the extent incurred by the Trustee through the Trustee's own willful misconduct, negligence or bad faith. To secure the Company's payment obligations in this Section, the Trustee shall have a Lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal of and interest on particular Securities. The Company's payment obligations pursuant to this Section shall survive the discharge of this Indenture. For purposes of this Section, the term "Trustee" shall include any predecessor Trustee, provided that any Trustee hereunder shall not be liable for the willful misconduct, negligence or bad faith of any other Trustee hereunder. SECTION 6.08. Replacement of Trustee The Trustee may resign at any time by so notifying the Company. The Holders of a majority in Principal Amount of the Securities or, as long as no Event of Default under Section 5.01 has occurred or is continuing, the Company may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company shall remove the Trustee if: (1) the Trustee fails to comply with Section 6.10; (2) the Trustee is adjudged bankrupt or insolvent; (3) a receiver or other public officer takes charge of the Trustee or its property; or (4) the Trustee otherwise becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee. 23 30 A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Securityholders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in Section 6.07. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in Principal Amount of the Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 6.10, any Securityholder (subject to compliance with TIA Section 310(b)(iii)) may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Notwithstanding the replacement of the Trustee pursuant to this Section, the Company's obligations under Section 6.07 shall continue for the benefit of the retiring Trustee. SECTION 6.09. Successor Trustee by Merger If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have. SECTION 6.10. Eligibility; Disqualification The Trustee shall at all times satisfy the requirements of TIA Section 310(a). The Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report. The Trustee shall comply with TIA Section 310(b). 24 31 SECTION 6.11. Preferential Collection of Claims Against Company The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated. ARTICLE 7 DISCHARGE OF SECURITIES AND INDENTURE SECTION 7.01. Satisfaction and Discharge of Securities Any Security or Securities, or any portion of the Principal Amount thereof, shall be deemed to have been paid for all purposes of this Indenture, and the entire indebtedness of the Company in respect thereof shall be satisfied and discharged, if there shall have been irrevocably deposited with the Trustee or any Paying Agent, in trust: (a) money in an amount which shall be sufficient, or (b) in the case of a deposit made prior to the maturity of such Securities or portions thereof , U.S. Government Obligations, which shall not contain provisions permitting the redemption or other prepayment thereof at the option of the issuer thereof, the principal of and the interest on which when due, without any regard to reinvestment thereof, will provide moneys which, together with the money, if any, deposited with or held by the Trustee or such Paying Agent, shall be sufficient, or (c) a combination of (a) or (b) which shall be sufficient, to pay when due the principal of and premium, if any, and interest, if any, due and to become due on such Securities or portions thereof; provided, however, that in the case of a redemption, the notice requisite to the validity of such redemption shall have been given or irrevocable authority shall have been given by the Company to give such notice, under arrangements satisfactory to the Trustee; and provided, further, that the Company shall have delivered to the Trustee and such Paying Agent: (x) if such deposit shall have been made prior to the maturity of such Securities, a Company Request stating that the money and U.S. Government Obligations deposited in accordance with this Section shall be held in trust, as provided in Section 7.03; 25 32 (y) if U.S. Government Obligations shall have been deposited, an Opinion of Counsel to the effect that such obligations constitute U.S. Government Obligations and do not contain provisions permitting the redemption or other prepayment thereof at the option of the issuer thereof, and an opinion of an independent public accountant of nationally recognized standing, selected by the Company, to the effect that the other requirements set forth in clause (b) above have been satisfied; and (z) if such deposit shall have been made prior to the maturity of such Securities, an Officer's Certificate stating the Company's intention that, upon delivery of such Officer's Certificate, its indebtedness in respect of such Securities or portions thereof will have been satisfied and discharged as contemplated in this Section. Upon the deposit of money or U.S. Government Obligations, or both, in accordance with this Section, together with the documents required by clauses (x), (y) and (z) above, the Trustee shall, upon Company Request, acknowledge in writing that such Securities or portions thereof are deemed to have been paid for all purposes of this Indenture and that the entire indebtedness of the Company in respect thereof has been satisfied and discharged as contemplated in this Section. In the event that all of the conditions set forth in the preceding paragraph shall have been satisfied in respect of any Securities or portions thereof except that, for any reason, the Officer's Certificate specified in clause (z) (if otherwise required) shall not have been delivered, such Securities or portions thereof shall nevertheless be deemed to have been paid for all purposes of this Indenture, and the Holders of such Securities or portions thereof shall nevertheless be no longer entitled to the benefits provided by this Indenture or of any of the covenants of the Company under Article Three or any other covenants made in respect of such Securities or portions thereof shall not be deemed to have been satisfied and discharged prior to maturity for any other purpose; and, upon Company Request, the Trustee shall acknowledge in writing that such Securities or portions thereof are deemed to have been paid for all purposes of this Indenture. If payment at stated maturity of less than all of the Securities of any series is to be provided for in the manner and with the effect provided in this Section, the Trustee shall select such Securities, or portions of principal amount thereof, in the manner specified by Section 9.03 for selection for redemption of less than all the Securities of a series. In the event that Securities which shall be deemed to have been paid for purposes of this Indenture, and, if such is the case, in respect of which the Company's indebtedness shall have been satisfied and discharged, all as provided in this Section, do not mature and are not to be redeemed within the sixty (60) day period commencing with the date of the deposit of moneys or U.S. Government Obligations, as aforesaid, the Company shall, as promptly as practicable, give a notice, in the same manner as a notice of redemption with respect to such Securities, to the Holders of such Securities to the effect that such deposit has been made and the effect thereof. 26 33 Notwithstanding that any Securities shall be deemed to have been paid for purposes of this Indenture, as aforesaid, the obligations of the Company and the Trustee in respect of such Securities under Sections 2.05, 2.06, 2.08, 2.09, 6.07, 6.08, and 9.04 and this Article shall survive. The Company shall pay, and shall indemnify the Trustee or any Paying Agent with which U.S. Government Obligations shall have been deposited as provided in this Section against, any tax, fee or other charge imposed on or assessed against such U.S. Government Obligations or the principal or interest received in respect of such U.S. Government Obligations, including, but not limited to, any such tax payable by any entity deemed, for tax purposes, to have been created as a result of such deposit. Anything herein to the contrary notwithstanding, (a) if, at any time after a Security would be deemed to have been paid for purposes of this Indenture, and, if such is the case, the Company's indebtedness in respect thereof would be deemed to have been satisfied and discharged, pursuant to this Section (without regard to the provisions of this paragraph), the Trustee or any Paying Agent, as the case may be, shall be required to return the money or U.S. Government Obligations, or combination thereof, deposited with it as aforesaid to the Company or its representative under any applicable Federal or State bankruptcy, insolvency or other similar law, such Security shall thereupon be deemed retroactively not to have been paid and any satisfaction and discharge of the Company's indebtedness in respect thereof shall retroactively be deemed not to have been effected, and such Security shall be deemed to remain Outstanding and (b) any satisfaction and discharge of the Company's indebtedness in respect of any Security shall be subject to the provisions of the last paragraph of Section 2.06. SECTION 7.02. Satisfaction and Discharge of Indenture This Indenture shall upon Company Request cease to be of further effect (except as hereinafter expressly provided), and the Trustee, at the expense of the Company, shall execute such instruments as the Company shall reasonably request to evidence and acknowledge the satisfaction and discharge of this Indenture when: (a) both (1) all Securities theretofore authenticated and delivered (other than Securities that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.09) have been delivered to the Trustee for cancellation; and (2) all Securities not theretofore delivered to the Trustee for cancellation have been deemed paid in accordance with Section 7.01; and (b) the Company has paid or caused to be paid all other sums payable hereunder by the Company; 27 34 provided, however, that if, in accordance with the last paragraph of Section 7.01, any Security, previously deemed to have been paid for purposes of this Indenture, shall be deemed retrospectively not to have been so paid, this Indenture shall thereupon be deemed retrospectively not to have been satisfied and discharged, as aforesaid, and to remain in full force and effect, and the Company shall execute and deliver such instruments as the Trustee shall reasonable request to evidence and acknowledge the same. Notwithstanding the satisfaction and discharge of this Indenture as aforesaid, the obligations of the Company and the Trustee under Sections 2.05, 2.06, 2.08, 2.09, 6.07, 6.08, and 9.04 and this Article shall survive. Upon satisfaction and discharge of this Indenture as provided in this Section, the Trustee shall turn over to the Company any and all money, securities, and other property then held by the Trustee for the benefit of the Holders of the Securities (other than money and U.S. Government Obligations held by the Trustee pursuant to Section 7.03) and shall execute and deliver to the Company such instruments as, in the judgment of the Company, shall be necessary, desirable or appropriate to effect of evidence the satisfaction and discharge of this Indenture. SECTION 7.03. Application of Trust Money Neither the U.S. Government Obligations nor the money deposited pursuant to section 7.01, nor the principal or interest payments on any such U.S. Government Obligations, shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal of and premium, if any and interest, if any, on the Securities or portions of principal amount thereof in respect of which such deposit was made, all subject, however, to the provisions of Section 2.06; provided, however, that any cash received from such principal or interest payment on such U.S. Government Obligations, if not then needed for such purpose, shall, to the extent practicable and upon Company Request and delivery to the Trustee of the Documents referred to in clause (y) in the first paragraph of Section 7.01, be invested in U.S. Government Obligations of the type described in clause (b) in the first paragraph of Section 6.01 maturing at such times and in such amounts as shall be sufficient, together with any other moneys and the proceeds of any other U.S. Government Obligations then held by the Trustee, to pay when due the principal of, and premium, if any, and interest, if any, due and to become due on such Securities or portions thereof on and prior to the maturity thereof, and interest earned from such reinvestment shall be paid over the Company as received, free and clear of any trust, lien or pledge under this Indenture; and provided, further, that any moneys held in accordance with this Section on the maturity of all such Securities in excess of the amount required to pay the principal of and premium, if any, and interest, if any, then due on such Securities shall be paid over to the Company free and clear of any trust, lien or pledge under this Indenture; and provided, further, that if an Event of Default shall have occurred and be continuing, moneys to be paid over to the Company pursuant to this Section shall be held until such Event of Default shall have been waived or cured. 28 35 ARTICLE 8 AMENDMENTS SECTION 8.01. Without Consent of Holders The Company and the Trustee may amend this Indenture or the Securities without notice to or consent of any Securityholder: (1) to cure any ambiguity, omission, defect or inconsistency; (2) to comply with Article 4; (3) to provide for the procedures required to permit the Company for utilize, at its option, a non-certificated system of registration for all or any series of the Securities; (4) to provide collateral security for the Securities; (5) to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power herein conferred upon the Company; (6) to make any change that does not adversely affect the rights of any Securityholder in any material respect. Without limiting the generality of the foregoing, if the TIA as in effect at the date of the execution and delivery of this Indenture or any time thereafter shall be amended and (i) if any such amendment shall require one or more changes to any provisions hereof or the inclusion herein of any additional provision, or shall by operation of law be deemed to effect such changes or incorporate such provisions by reference or otherwise, this Indenture shall be deemed to have been amended so as to conform to such amendment to the TIA and the Company and the Trustee may, without the consent of any Holders, enter into an indenture supplemental hereto to evidence such amendment hereof or (ii) if any such amendment shall permit one or more changes to, or the elimination of, any provisions hereof which, at the date of the execution and delivery hereof or at any time thereafter, are required by the TIA to be contained herein or are contained herein to reflect any provisions of the TIA as in effect at such date, this Indenture shall be deemed to have been amended to effect such changes or elimination, and the Company and the Trustee may, without the consent of any Holders, enter into an indenture supplemental hereto to amend this Indenture to effect such changes or elimination. After an amendment under this Section becomes effective, the Company shall mail to Securityholders a notice briefly describing such amendment. The failure to give such notice to all Securityholders, or any defect therein, shall not impair or affect the validity of an amendment under this Section. 29 36 SECTION 8.02. With Consent of Holders The Company and the Trustee may amend this Indenture or the Securities without notice to any Securityholder but with the written consent of the Holders of at least a majority in principal amount of the Securities. However, without the consent of each Securityholder affected, an amendment may not: (1) reduce the amount of Securities whose Holders must consent to an amendment; (2) reduce the rate of or extend the time for payment of interest on any Security; (3) reduce the principal of or extend the fixed maturity of any Security; (4) reduce the premium payable upon the redemption of any Security or change the time at which any Security may or shall be redeemed; (5) make any Security payable in money other than that stated in the Security; or (6) make any change in Section 5.04 or this Section; and, provided further, that in case more than one series of Securities (or Securities of a single series which have different Terms) shall be outstanding under this Indenture, and any such proposed amendment shall affect the rights of Holders of the Securities of one or more series (or Securities of a single series which have different Terms) and shall not affect the rights of Holders of the Securities of one or more of the other series (or Securities of a single series which have different Terms), then only Holders of Securities to be affected shall have authority or be required to consent to or approve such amendment. Any waiver of a default provided for in Section 5.04 shall be deemed to affect the Securities of all series, and, subject to the foregoing, any modification of the provisions of any sinking fund or covenant established in respect of Securities of a particular series (or Securities of a single series having the same Terms) shall be deemed to affect only such Securities. It shall not be necessary for the consent of the Holders under this Section 8.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. After an amendment under this Section becomes effective, the Company shall mail to Holders of the affected Securities a notice briefly describing such amendment. The failure to give such notice to all Securityholders (or all Holders of the affected Securities), or any defect therein, shall not impair or affect the validity of an amendment under this Section. 30 37 SECTION 8.03. Compliance with Trust Indenture Act Every amendment to this Indenture or the Securities shall comply with the TIA as then in effect. SECTION 8.04. Revocation and Effect of Consents and Waivers A consent to an amendment or any other action hereunder or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent or waiver is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder's Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Securityholder. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Securityholders entitled to take any action under this Indenture by vote or consent. Such record date shall be the later of 30 days prior to the first solicitation of such consent or vote or the date of the most recent list of Holders of the affected Securities furnished to the Trustee pursuant to Section 2.07 prior to such solicitation. If a record date is fixed, those persons who were Securityholders at such record date (or their duly designated proxies), and only those persons, shall be entitled to take such action by vote or consent or to revoke any vote or consent previously given, whether or not such persons continue to be Securityholders after such record date. SECTION 8.05. Notation on or Exchange of Securities If an amendment changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment. SECTION 8.06. Trustee To Sign Amendments The Trustee shall sign any amendment authorized pursuant to this Article 8 if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Officer's Certificate and an Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture. 31 38 ARTICLE 9 REDEMPTION SECTION 9.01. Applicability Securities of any series which are redeemable before their final maturity shall be redeemable in accordance with their Terms and (except as otherwise specified as contemplated by Section 2.01 for Securities of any series) in accordance with this Article. SECTION 9.02. Notice to Trustee The Company may, with respect to any series of Securities (or Securities of a series having the same Terms), reserve the right to redeem and pay such Securities or any part thereof, or may covenant to redeem and pay the series of Securities (or Securities of a series having the same Terms) or any part thereof, before maturity at such time and on such terms as provided for in such Securities. If a series of Securities (or Securities of a series having the same Terms) is redeemable and the Company wants or is obligated to redeem all or part of the series of Securities (or Securities of a series having the same Terms) pursuant to the Terms of such Securities, the Company shall notify the Trustee of the redemption date and the Principal Amount of the series of Securities (or Securities of a series having the same Terms) to be redeemed. The Company shall give such notice at least 45 days before the redemption date (or such shorter notice as may be acceptable to the Trustee in its sole discretion). SECTION 9.03. Selection of Securities To Be Redeemed If less than all the Securities of a series (or Securities of a series having the same Terms) are to be redeemed, the Trustee, not more than 45 days prior to the redemption date, shall select the Securities of the series (or Securities of a series having the same Terms) to be redeemed pro rata or by lot or by such other method as the Trustee shall deem fair and appropriate. The Trustee shall make the selection from Securities that are outstanding and that have not previously been called for redemption. Securities of the series (or Securities of a series having the same Terms) and portions of them selected by the Trustee shall be in amounts of $1,000 or integral multiples of $1,000 or with respect to Securities of any Series issuable in other denominations pursuant to Section 2.01(8), in amounts equal to the minimum principal denomination for each such series and in integral multiples thereof. Provisions of this Indenture that apply to Securities of that series (or Securities of a series having the same Terms) called for redemption also apply to portions of Securities of that series (or Securities of a series having the same Terms) called for redemption. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the Principal Amount thereof to be redeemed. 32 39 SECTION 9.04. Notice of Redemption (a) At least 30 days but not more than 60 days before a redemption date, unless a shorter period is specified in the Terms of the Securities to be redeemed, the Company shall cause to be mailed a notice of redemption by first-class mail to each Holder of Securities that are to be redeemed. (b) All notices of redemption shall identify the Securities to be redeemed and shall state: (1) the redemption date; (2) the redemption price and interest, if any, payable upon such redemption; (3) if less than all the outstanding Securities of a series (or Securities of a series having the same Terms) are to be redeemed, the identification (and, in the case of partial redemption, the Principal Amounts) of the particular Securities to be redeemed; (4) the name and address of the Paying Agent; (5) that the Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price; and (6) that interest on Securities called for redemption ceases to accrue on and after the redemption date. (c) If at the time of any notice of redemption the Company shall not have deposited or caused to be deposited with the Trustee moneys sufficient to redeem all the Debentures called for redemption, such notice shall state that it is subject to the deposit of the redemption moneys with the Trustee not later than the opening of business on the redemption date and shall be of no effect unless such moneys are so deposited. If such moneys are not deposited by such date and time, the Trustee shall promptly notify the holders of all Debentures called for redemption of such fact. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense. SECTION 9.05. Effect of Notice of Redemption Once notice of redemption is mailed, and such notice is not conditional as provided in Section 9.04(c) above, Securities called for redemption become due and payable on the redemption date at the redemption price. Any failure to mail notice of redemption or any defect therein shall not affect the redemption of any other Securities called for redemption. 33 40 Upon surrender to the Paying Agent of such Securities, such Securities shall be paid at the redemption price plus accrued interest to the redemption date, but installments of interest due on or prior to the redemption date will be payable to the Holders of such Securities of record at the close of business on the relevant record dates, unless otherwise specified in the Terms of such Securities. SECTION 9.06. Deposit of Redemption Price On or before the redemption date, the Company shall deposit with the Paying Agent money sufficient to pay the redemption price of and interest accrued to the redemption date on all Securities to be redeemed on that date. SECTION 9.07. Securities Redeemed in Part Upon surrender of a Security that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the Holder of that Security a new Security or Securities of the same series and terms in authorized denominations equal in aggregate principal amount to the unredeemed portion of the Security surrendered. ARTICLE 10 SINKING FUNDS SECTION 10.01. Applicability The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities, except as otherwise specified as contemplated by Section 2.01 for Securities of any series. The minimum amount of any sinking fund payment provided for by the Terms of any Securities is herein referred to as a "Mandatory Sinking Fund Payment", and any payment in excess of such minimum amount provided for by the terms of such Securities is herein referred to as an "Optional Sinking Fund Payment". If provided for by the Terms of Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 10.02. Each sinking fund payment shall be applied to the redemption of Securities of any series (or Securities of a series having the same Terms) as provided for by the Terms of such Securities. SECTION 10.02. Satisfaction of Sinking Fund Payments with Securities The Company may, in satisfaction of all or any part of any sinking fund payment with respect to the Securities to be made pursuant to the Terms of such Securities as provided for by such Terms, (1) deliver outstanding Securities of such series having the same Terms (other than any of such Securities previously called for redemption) and (2) apply as credit Securities of such 34 41 series having the same Terms which have been redeemed either at the election of the Company pursuant to the Terms of such Securities or through the application of permitted Optional Sinking Fund Payments pursuant to the Terms of such Securities, provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. If as a result of the delivery or credit of Securities in lieu of cash payments pursuant to this Section 10.02, the Principal Amount of Securities to be redeemed in order to exhaust the aforesaid cash payment shall be less than $100,000, the Trustee need not call Securities for redemption, except upon receipt of a Company Order that such action be taken, and such cash payment shall be held by the Trustee or a Paying Agent and applied to the next succeeding sinking fund payment with respect to such series of Securities (or Securities of such series having the same Terms), provided, however, that the Trustee or such Paying Agent shall at the request of the Company from time to time pay over and deliver to the Company any cash payment so being held by the Trustee or such Paying Agent upon delivery by the Company to the Trustee of Securities of that series having the same Terms purchased by the Company having an unpaid Principal Amount equal to the cash payment required to be released to the Company. SECTION 10.03. Redemption of Securities for Sinking Fund Not less than 60 days prior to each sinking fund payment date for any series of Securities (or Securities of such series having the same Terms), the Company will deliver to the Trustee an Officer's Certificate specifying the amount of the next ensuing Mandatory Sinking Fund Payment for that series (or Securities of such series having the same Terms) pursuant to the Terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting of Securities of that series (or Securities of such series having the same Terms) pursuant to Section 10.02, and the optional amount, if any, to be added in cash to the next ensuing Mandatory Sinking Fund Payment, and the Company shall thereupon be obligated to pay the amount therein specified. Not less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 9.03 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 9.04. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 9.05, 9.06 and 9.07. 35 42 ARTICLE 11 MEETINGS OF HOLDERS; ACTIONS WITHOUT MEETING SECTION 11.01. Purposes for Which Meetings May Be Called A meeting of Holders of Securities of one or more, or all, series may be called at any time and from time to time pursuant to this Article to make, give or take request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by Holders of Securities of such series. SECTION 11.02. Call, Notice and Place of Meetings (a) The Trustee may at any time call a meeting of Holders of Securities of one or more, or all, series for any purpose specified in Section 11.01, to be held at such time and (except as provided in subsection (b) of this Section) at such place in the Borough of Manhattan, The City of New York, as the Trustee shall determine, or, with the approval of the Company, at any other place. Notice of every such meeting, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given not less than twenty-one (21) nor more than one hundred eighty (180) days prior to the date fixed for the meeting. (b) The Trustee may be asked to call a meeting of the Holders of Securities of one or more, or all, series by the Company or the Holders of thirty-three percent (33%) in aggregate principal amount of all of such series, considered as one class, for any purpose specified in Section 11.01, by written request setting forth in reasonable detail the action proposed to be taken at the meeting. If the Trustee shall have been asked by the Company to call such a meeting, the Company shall determine the time and place for such meeting and may call such meeting by giving notice thereof in the manner provided in subsection (a) of this Section, or shall direct the Trustee, in the name and at the expense of the Company, to give such notice. If the Trustee shall have been asked to call such a meeting by Holders in accordance with this subsection (b), and the Trustee shall not have given the notice of such meting within twenty-one (21) days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Holders of Securities of such series, in the principal amount above specified, may determine the time and the place in the Borough of Manhattan, The City of New York, or in such other place as shall be determined or approved by the Company, for such meeting and may call such meeting for such purposes by giving notice thereof as provided in subsection (a) of this Section. 36 43 (c) Any meeting of Holders of Securities of one or more, or all, series shall be valid without notice if the Holders of all outstanding Securities of such series are present in person or by proxy and if representatives of the Company and the Trustee are present, or if notice is waived in writing before or after the meeting by the Holders of all outstanding Securities of such series or by such of them as are not present at the meeting in person or by proxy, and by the Company and the Trustee. SECTION 11.03. Persons Entitled to Vote at Meetings To be entitled to vote at any meeting of Holders of Securities of one or more, or all, series, a person shall be (a) a Holder of one or more outstanding Securities of such series, or (b) a person appointed by an instrument in writing as proxy for a Holder or Holders of one or more outstanding Securities of such series by such Holder or Holders. The only persons who shall be entitled to attend any meeting of Holders of Securities of any series shall be the persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. SECTION 11.04. Quorum; Action The persons entitled to vote a majority in aggregate principal amount of the outstanding Securities of the series with respect to which a meeting shall have been called as hereinbefore provided, considered as one class, shall constitute a quorum for a meeting of Holders or Securities of such series; provided, however, that if any action is to be taken at such meeting which this Indenture expressly provides may be taken by the Holders of a specified percentage, which is less than majority, in principal amount of the outstanding Securities of such series, considered as one class, the persons entitled to vote such specified percentage in principal amount of the outstanding Securities of such series considered as one class, shall constitute a quorum. In the absence of a quorum within one hour of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such series, be dissolved. In any other case, the meeting may be adjourned for such period as may be determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for such period as may be determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Except as provided by Section 11.05(e), notice of the reconvening of any meeting adjourned for more than thirty (30) days shall be given not less than ten (10) days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the outstanding Securities of such series which shall constitute a quorum. Any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in aggregate principal amount of the outstanding Securities of the series with respect to which such meeting shall have been called, considered as one class; provided, however, that, except as so limited, any resolution with respect to any action which this Indenture expressly 37 44 provides may be taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the outstanding Securities of such series, considered as one class, may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holder of such specified percentage in principal amount of the outstanding Securities of such series, considered as one class. Any resolution passed or decision taken at any meeting of Holders of Securities duly held in accordance with this Section shall be binding on all the Holders of Securities of the series with respect to which such meeting shall have been held, whether or not present or represented at the meeting. SECTION 11.05. Attendance at Meeting; Determination of Voting Rights; Conduct and Adjournment of Meetings (a) Attendance at meetings of Holders of Securities may be in person or by proxy; and to the extent permitted by law, any such proxy shall remain in effect and be binding upon any future Holder of the Securities with respect to which it was given unless and until specifically revoked by the Holder or future Holder of such Securities before being voted. (b) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities in regard to proof of the holding of such Securities and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations and approved by the Company, the holding of Securities shall be proved in the manner specified in Section 12.04 and the appointment of any proxy shall be proved in the manner specified in Section 12.04. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 12.04 or other proof. (c) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders as provided in Section 11.02(b), in which case the Company or the Holders of Securities of the series calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the persons entitled to vote a majority in aggregate principal amount of the outstanding Securities of all series represented at the meeting, considered as one class. 38 45 (d) At any meeting each Holder or proxy shall be entitled to one vote for each $1,000 principal amount of outstanding Securities held or represented by such Holder; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security or proxy. (e) Any meeting duly called pursuant to Section 11.02 at which a quorum is present may be adjourned from time to time by persons entitled to vote a majority in aggregate principal amount of the outstanding Securities of all series represented at the meeting, considered as one class; and the meeting may be held as so adjourned without further notice. SECTION 11.06. Counting Votes and Recording Action of Meetings The vote upon any resolution submitted to any meeting of Holders shall be by written ballots on which shall be subscribed the signatures of the Holders or their representatives by proxy and the principal amounts and serial numbers of the outstanding Securities, of the series with respect to which the meeting shall have been called, held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to such record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge and the facts setting forth a copy of the notice of the meeting and showing that such notice was given and provided in Section 11.02 and, if applicable, Section 11.04. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. SECTION 11.07. Action without Meeting In lieu of a vote of Holders at a meeting as hereinbefore contemplated in this Article, any request, demand, authorization, direction, notice, consent, waiver or other action may be made, given or taken by Holders by written instruments as provided in Section 12.04. 39 46 ARTICLE 12 MISCELLANEOUS SECTION 12.01. Trust Indenture Act Controls If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by operation of TIA Section 318(c), the TIA imposed duties shall control. SECTION 12.02. Notices Any notice or communication shall be in writing and delivered in person or mailed by first-class mail addressed as follows: if to the Company: Conectiv 800 King Street Wilmington, DE 19899 Attention: Corporate Secretary if to the Trustee: The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. Any notice or communication mailed to a Securityholder shall be mailed to the Securityholder at the Securityholder's address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. SECTION 12.03. Communication by Holders with Other Holders Securityholders may communicate pursuant to TIA Section 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). 40 47 SECTION 12.04. Acts of Holders (a) Any request, demand, authorization, direction, notice, consent, election, waiver or other action provided by this Indenture to be made, given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing or, alternatively, may be embodied in and evidenced by the record of Holders duly called and held in accordance with the provisions of Article 11, or a combination of such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments and so voting at any such meeting. Proof of execution of any such instruments or of a writing appointing any such agent, or of the holding by any person of a Security, shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. The record of any meeting of Holders shall be proved in the manner provided in Section 11.06. (b) The fact and date of the execution by any person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof or may be proved in any other manner which the Trustee and the Company deem sufficient. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. (c) The ownership, principal amount and serial numbers of Securities held by any person, and the date of holding the same, shall be proved by the register maintained by the Registrar. (d) Any request, demand, authorization, direction, notice, consent, election, waiver or other Act of a Holder shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. 41 48 (e) Until such time as written instruments shall have been delivered to the Trustee with respect to the requisite percentage of principal amount of Securities for the action contemplated by such instruments, any such instrument executed and delivered by or on behalf of a holder may be revoked with respect to any or all of such Securities by written notice by such Holder or any subsequent Holder, proven in the manner in which such instrument was proven. (f) Securities of any series authenticated and delivered after any Act of Holders may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any action taken by such Act of Holders. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to such action may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for outstanding Securities of such series. (g) The Company may, at its option, by Company Order, fix in advance a record date for the determination of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or other Act solicited by the Company, but the Company shall have no obligation to do so; provided, however, that the Company may not fix a record date for the giving or making of any notice, declaration, request or direction referred to in the next sentence. In addition, the Trustee may, at its option, fix in advance a record date for the determination of Holders of Securities of any series entitled to join in the giving or making of any Notice of Default, any declaration of acceleration referred to in Section 5.02, any request to institute proceedings referred to in Section 5.05 or any direction referred to in Section 5.06, in each case with respect to Securities of such series. If any such record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act, or such notice, declaration, request or direction, may be given before or after such record date, but only the Holders of record at the close of business on the record date shall be deemed to be Holders for the purposes of determining, subject to Section 12.07 (i) whether holders of the requisite proportion of the Securities have authorized or agreed or consented to such Act and/or (ii) which Holders may revoke any such Act (notwithstanding subsection (e) of this Section); and any such Act, given as aforesaid, shall be effective whether or not the Holders which authorized or agreed or consented to such Act remain Holders after such record date and whether or not the Securities held by such Holders remain outstanding after such record date. SECTION 12.05. Certificate and Opinion as to Conditions Precedent Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee: (1) an Officer's Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture (including any covenants compliance with which constitutes a condition precedent) relating to the proposed action have been complied with; and 42 49 (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with. SECTION 12.06. Statements Required in Certificate or Opinion Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such covenant or condition has been complied with. SECTION 12.07. When Securities Disregarded In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination. SECTION 12.08. Rules by Trustee, Paying Agent and Registrar The Trustee may make reasonable rules for action by or a meeting of Securityholders or for evidencing the due execution of consents or waivers by Securityholders. The Registrar and the Paying Agent may make reasonable rules for their functions. 43 50 SECTION 12.09. Legal Holidays A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected. SECTION 12.10. Governing Law This Indenture and the Securities shall be governed by, and construed in accordance with, the laws of the State of New York but without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby. SECTION 12.11. No Recourse Against Others A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities of this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Securities. SECTION 12.12. Successors All agreements of the Company in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 12.13. Multiple Originals The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. SECTION 12.14 Table of Contents; Headings The table of contents and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. 44 51 IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above. CONECTIV Attest: by Title: Title: _______________________, AS TRUSTEE Attest: by Title: Title: 45 52 STATE OF DELAWARE ss.: COUNTY OF NEW CASTLE On this ___ day of ________, 199_, before me personally came __________, to me known, who, being by me duly sworn, did depose and say that he/she resides at Wilmington, Delaware 19899; that he/she is of CONECTIV, one of the corporations described in and which executed the foregoing instrument; that he/she knows the seal of said corporation; that the seal affixed to said instrument bearing the corporate name of said corporation is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation; and that he/she signed his/her name thereto by like order. Notary Public 46 53 STATE OF _________________________ ss.: COUNTY OF ________________________ On the ____ day of _______________, 199__, before me personally came ________________, to me known, who, being by me duly sworn, did depose and say that he/she resides at _____________________________, and that he/she is an ___________________________ of _______________________, one of the corporations described in and which executed the foregoing instrument; that he/she knows the seal of said corporation; that the seal affixed to said instrument bearing the corporate name of said corporation is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation; and that he/she signed his/her name thereto by like authority. Notary Public 47 54 FORM OF DEBENTURE Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. CONECTIV ____% DEBENTURE, SERIES DUE _______ NO. __________________ $ __________ CONECTIV, a Delaware corporation (hereinafter called the Company), for value received, hereby promises to pay to ____________ or registered assigns, the sum of $______ on the [_______] day of _______________, at the corporate trust office of ____________, Trustee under the Indenture referred to on the reverse hereof, or its successor as such Trustee, in the Borough of Manhattan, the City of New York, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest thereon at the rate of _____% per annum in like coin or currency, payable at said office semiannually on the [________] day of ____________ and the [________] day of ____________ in each year, from the interest payment date to which interest has been paid last preceding the date hereof (unless the date hereof is an interest payment date to which interest has been paid, in which case from the date hereof, or unless the date hereof is prior to ____________, in which case from __________) until the Company's obligation with respect to the payment of such principal shall have been discharged, such interest to be paid to the person who shall have been the registered owner hereof at the close of business on __________ or __________, as the case may be, next preceding an interest payment date, except as otherwise provided in the Indenture referred to on the reverse hereof. Notwithstanding the foregoing, if the date of this Debenture is after __________ or __________, as the case may be, and before the immediately following __________ or __________, as the case may be, this Debenture shall bear interest from such __________ or __________; provided, however, that if and to the extent that the Company shall default in the payment of interest due on such __________ or __________, this Debenture shall bear interest from the next preceding __________ or __________ to which interest has been paid or, if no interest has been paid, from ________. Additional provisions of this Debenture are contained on the reverse hereof and such provisions shall for all purposes have the same effect as though fully set forth at this place. This Debenture shall not be valid or become obligatory for any purpose until it shall have been authenticated by the certificate, hereon endorsed, of the Trustee under the Indenture. 48 55 IN WITNESS WHEREOF, Conectiv, has caused this Debenture to be executed in its name by the facsimile signature of its Chairman of the Board or its President or one of its Vice Presidents or its Treasurer, and its corporate seal to be hereunto affixed, or a facsimile thereof to be printed or engraved hereon, and to be attested by the facsimile signature of its Secretary or one of its Assistant Secretaries. CONECTIV Dated: ____________________________ By: _______________________________ Attest: ___________________________ (FORM OF TRUSTEE'S CERTIFICATE ON DEBENTURES) This is one of the Debentures, of the series designated therein, described in the within-mentioned Indenture. _____________________________, as Trustee, By Authorized Officer 49 56 [REVERSE] CONECTIV _____% DEBENTURE, SERIES DUE __________ This Debenture is one of a duly authorized issue of Debentures of the Company issuable in series, and is one of a series known as its ____% Debentures, Series Due __________ (herein called Debentures Due __________), all issued and to be issued under an Indenture dated as of __________, in which the Debentures Due __________ are created and described, all executed between the Company and __________ (herein called the Trustee), Trustee, to which Indenture (herein called the Indenture) reference is hereby made for a statement of the rights thereunder of the Trustee and of the holders of the Debentures, and of the duties thereunder of the Trustee and of the Company. The rights and obligations of the Company and of the holders of Debentures may be changed and modified at the request of the Company by an indenture or indentures supplemental to the Indenture, executed pursuant to the consent in writing of the holders of at least a majority in principal amount of the Debentures then outstanding affected by such change or modification, all in the manner and subject to the limitations set forth in the Indenture, provided that no such change or modification by such supplemental indenture shall extend the maturity of, or reduce the rate of interest on, or otherwise modify the terms of payment of the principal of, or the premium, if any, or the interest on, this Debenture, or reduce the percentage of Debentures the holders of which are required to consent to any such supplemental indenture, or modify the provision as to the holders of any series of Debentures authorized or required to consent to any such supplemental indenture, without the express consent of the holder hereof. Any such consent by the holder of this Debenture (unless effectively revoked as provided in the Indenture) shall be conclusive and binding upon such holder and upon all future holders and owners of this Debenture, whether or not any notation of such consent is made upon this Debenture. [The Debentures Due ________________ may not be redeemed prior to maturity.] 50 57 [The Debentures Due _____________ may be redeemed, prior to maturity, at the election of the Company, as a whole at any time, or in part from time to time, as provided in the Indenture, at the redemption prices (expressed in percentages of principal amount) set forth in the tabulation below under the heading "Regular Redemption Prices":] IF REDEEMED DURING REGULAR 12 MONTH PERIOD REDEMPTION COMMENCING PRICES ---------- ------ In case a default, as defined in the Indenture, shall occur, the principal of all the Debentures then outstanding may become or be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture provides that in certain events such declaration and certain defaults under the Indenture may be waived by the holders of a majority in principal amount of all Securities outstanding under the Indenture. Except as stated in the first paragraph on the face hereof, this Debenture is transferable and exchangeable as prescribed in the Indenture by the registered holder hereof in person, or by his duly authorized attorney, at the corporate trust office of the Trustee in said Borough of Manhattan, upon surrender and cancellation of this Debenture, and, thereupon, a new fully registered Debenture or Debentures Due ______________ of the same aggregate principal amount shall be issued in exchange therefor as provided in the Indenture. Except as stated in the first paragraph on the face hereof, the Company and the Trustee may deem and treat the person in whose name this Debenture is registered as the absolute owner hereof for the purpose of receiving payment of or on account of the principal, premium, if any, and interest due hereon and for all other purposes. No recourse shall be had for the payment of the principal of, or the premium, if any, or the interest on, this Debenture, or any part hereof, or for any claim based hereon or otherwise in respect hereof, or of the indebtedness represented hereby, or upon any obligation, covenant or agreement of the Indenture, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation (either directly or through the Company or any such successor corporation), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all liability, if any, of that character against every such incorporator, stockholder, officer and director being by the acceptance hereof, and as part of the consideration for the issue hereof, expressly waived and released. This Debenture shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with and governed by the laws of said State. 51 58 FORM OF MEDIUM-TERM NOTE Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. CONECTIV MEDIUM-TERM NOTE, SERIES NO.____________________ $___________ Original Issue Date: Redeemable: Yes___ No___ Interest Rate: Initial Redemption Date: Stated Maturity Date: Redemption Limitation Date: Issue Price (_____%) Initial Redemption Price: Interest Payment Dates Reduction Percentage Regular Record Dates CONECTIV, a Delaware corporation (hereinafter called the Company), for value received, hereby promises to pay to __________ or registered assigns, the sum of $______ on the [______] day of __________, at the corporate trust office of __________, Trustee under the Indenture referred to on the reverse hereof, or its successor as such Trustee, in the Borough of Manhattan, the City of New York, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest thereon at the rate of ____% per annum in like coin or currency, payable at said office semiannually on the [______] day of __________ and the [______] day of __________ in each year, from the interest payment date to which interest has been paid last preceding the date hereof (unless the date hereof is an interest payment date to which interest has been paid, in which case from the date hereof, or unless the date hereof is prior to __________, in which case from __________) until the Company's obligation with respect to the payment of such principal shall have been discharged, such interest to be paid to the person who shall have been the registered owner hereof at the close of business on __________ or __________, as the case may be, next preceding an interest payment date, except as otherwise provided in the Indenture referred to on the reverse hereof. Notwithstanding the foregoing, if the date of this Medium-Term Note is after __________ or __________, as the case may be, and before the immediately following __________ or __________, as the case may be, this Medium-Term Note shall bear interest from such __________ or __________; provided, however, that if and to the extent that the Company shall default in the payment of interest due on such __________ or __________, this Medium-Term Note shall bear interest from the next preceding __________ or __________ to which interest has been paid or, if no interest has been paid, from __________. 52 59 Additional provisions of this Medium-Term Note are contained on the reverse hereof and such provisions shall for all purposes have the same effect as though fully set forth at this place. This Medium-Term Note shall not be valid or become obligatory for any purpose until it shall have been authenticated by the certificate, hereon endorsed, of the Trustee under the Indenture. 53 60 IN WITNESS WHEREOF, Conectiv, has caused this Medium-Term Note to be executed in its name by the facsimile signature of its Chairman of the Board or its President or one of its Vice Presidents or its Treasurer, and its corporate seal to be hereunto affixed, or a facsimile thereof to be printed or engraved hereon, and to be attested by the facsimile signature of its Secretary or one of its Assistant Secretaries. CONECTIV Dated: ____________________________ By: _______________________________ Attest: ___________________________ (FORM OF TRUSTEE'S CERTIFICATE ON MEDIUM-TERM NOTES) This is one of the Medium-Term Notes, of the series designated therein, described in the within-mentioned Indenture. _____________________________, as Trustee, By Authorized Officer 54 61 [REVERSE] CONECTIV MEDIUM-TERM NOTE, SERIES ______ This Medium-Term Note is one of a duly authorized issue of Medium-Term Notes of the Company issuable in series, and is one of a series known as its Medium-Term Notes, Series ______ (herein called Medium-Term Notes, Series ______), all issued and to be issued under an Indenture dated as of __________, in which the Medium-Term Notes, Series __________ are created and described, all executed between the Company and _______________ (herein called the Trustee), Trustee, to which Indenture (herein called the Indenture) reference is hereby made for a statement of the rights thereunder of the Trustee and of the holders of the Medium-Term Notes, and of the duties thereunder of the Trustee and of the Company. The rights and obligations of the Company and of the holders of Medium-Term Notes may be changed and modified at the request of the Company by an indenture or indentures supplemental to the Indenture, executed pursuant to the consent in writing of the holders of at least a majority in principal amount of the Medium-Term Notes then outstanding affected by such change or modification, all in the manner and subject to the limitations set forth in the Indenture, provided that no such change or modification by such supplemental indenture shall extend the maturity of, or reduce the rate of interest on, or otherwise modify the terms of payment of the principal of, or the premium, if any, or the interest on, this Medium-Term Note, or reduce the percentage of Medium-Term Notes the holders of which are required to consent to any such supplemental indenture, or modify the provision as to the holders of any series of Medium-Term Notes authorized or required to consent to any such supplemental indenture, without the express consent of the holder hereof. Any such consent by the holder of this Medium-Term Note (unless effectively revoked as provided in the Indenture) shall be conclusive and binding upon such holder and upon all future holders and owners of this Medium-Term Note, whether or not any notation of such consent is made upon this Medium-Term Note. [The Medium-Term Notes, Series ________ may not be redeemed prior to maturity.] 55 62 [The Medium-Term Notes, Series ______ may be redeemed, prior to maturity, at the election of the Company, as a whole at any time, or in part from time to time, as provided in the Indenture, at the redemption prices (expressed in percentages of principal amount) set forth in the tabulation below under the heading "Regular Redemption Prices":] IF REDEEMED DURING REGULAR 12 MONTH PERIOD REDEMPTION COMMENCING PRICES ---------- ------ In case a default, as defined in the Indenture, shall occur, the principal of all the Medium-Term Notes then outstanding may become or be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture provides that in certain events such declaration and certain defaults under the Indenture may be waived by the holders of a majority in principal amount of all Securities outstanding under the Indenture. Except as stated in the first paragraph on the face hereof, this Medium-Term Note is transferable and exchangeable as prescribed in the Indenture by the registered holder hereof in person, or by his duly authorized attorney, at the corporate trust office of the Trustee in said Borough of Manhattan, upon surrender and cancellation of this Medium-Term Note, and, thereupon, a new fully registered Medium-Term Note or Medium-Term Notes, Series ______ of the same aggregate principal amount shall be issued in exchange therefor as provided in the Indenture. Except as stated in the first paragraph on the face hereof, the Company and the Trustee may deem and treat the person in whose name this Medium-Term Note is registered as the absolute owner hereof for the purpose of receiving payment of or on account of the principal, premium, if any, and interest due hereon and for all other purposes. No recourse shall be had for the payment of the principal of, or the premium, if any, or the interest on, this Medium-Term Note, or any part hereof, or for any claim based hereon or otherwise in respect hereof, or of the indebtedness represented hereby, or upon any obligation, covenant or agreement of the Indenture, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation (either directly or through the Company or any such successor corporation), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all liability, if any, of that character against every such incorporator, stockholder, officer and director being by the acceptance hereof, and as part of the consideration for the issue hereof, expressly waived and released. This Medium-Term Note shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with and governed by the laws of said State. 56 EX-99.A3 3 FORMS OF CONNECTIV STOCK CERTIFICATES 1 Page 1 Exhibit A-3 NUMBER SHARES COMMON STOCK COMMON STOCK PAR VALUE $.01 PER SHARE PAR VALUE $.01 PER SHARE INCORPORATED UNDER THE LAWS CUSIP 206829 10 3 OF THE STATE OF DELAWARE SEE REVERSE FOR CERTAIN DEFINITIONS CONECTIV This Certifies that is the owner of SHARES OF THE FULL-PAID AND NON-ASSESSABLE COMMON STOCK OF Conectiv, transferable in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby are issued and shall be held subject to the provisions of he Certificate of Incorporation of the Company. This Certificate is not valid unless countersigned by a Transfer Agent registered by a Registrar. Witness the seal of the Company and the signatures of its duly authorized officers. CERTIFICATE OF STOCK Dated COUNTER SIGNED AND REGISTERED: THE BANK OF NEW YORK L.M. Walters H.E. Cosgrove William J. Skinner TREASURER CHAIRMAN TRANSFER AGENT AND REGISTRAR [SEAL] AMERICAN BANK NOTE COMPANY z 2 Page 2 CONECTIV The Corporation is authorized to issue more than one class of stock, including a class of preferred stock that may be issued in one or more series. The Corporation will furnish to any stockholder, without charge and upon written request to the Corporate Secretary, a full statement of the powers, designations, preferences, and relative, participating, optional, or other special rights of the shares of each class of stock or series thereof and the qualifications, limitations and restrictions of such preferences and/or rights. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as thought they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian _______ TEN ENT - as tenants by the entireties (Cust) (Minor) JT TEN - as joint tenants with right of under Uniform Gifts survivorship and not as tenants to Minors Act _________ in common (State)
Additional abbreviations may also be used though not in the above list. For value received, ______________________ hereby sell, assign and transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ Please print or typewrite name and address including postal zip code of assignee ________________________________________________________________________________ ________________________________________________________________________________ _________________________________________________________________________ shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint _____________________________________________ ________________________________________________________________________________ Attorney to transfer the said stock on the books of the within-named Company with full power of substitution in the premises. Dated, ___________________ ________________________________________ NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITHT HE NAME AS WRIT-TEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER. SIGNATURE(S) GUARANTEED: ________________________________________________ THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCK-BROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR DESTROED, THE CORPORATION WILL REQUIRE A BOND IF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE. 3 Page 3 NUMBER SHARES CLASS A CLASS A COMMON STOCK COMMON STOCK PAR VALUE $.01 PER SHARE PAR VALUE $.01 PER SHARE INCORPORATED UNDER THE LAWS CUSIP 206829 20 2 OF THE STATE OF DELAWARE SEE REVERSE FOR CERTAIN DEFINITIONS CONECTIV This Certifies that is the owner of SHARES OF THE FULL-PAID AND NON-ASSESSABLE COMMON STOCK OF Conectiv, transferable in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby are issued and shall be held subject to the provisions of he Certificate of Incorporation of the Company. This Certificate is not valid unless countersigned by a Transfer Agent registered by a Registrar. Witness the seal of the Company and the signatures of its duly authorized officers. CERTIFICATE OF STOCK Dated COUNTER SIGNED AND REGISTERED: THE BANK OF NEW YORK L.M. Walters H.E. Cosgrove William J. Skinner TREASURER CHAIRMAN TRANSFER AGENT AND REGISTRAR [SEAL] AMERICAN BANK NOTE COMPANY 4 CONECTIV The Corporation is authorized to issue more than one class of stock, including a class of preferred stock that may be issued in one or more series. The Corporation will furnish to any stockholder, without charge and upon written request to the Corporate Secretary, a full statement of the powers, designations, preferences, and relative, participating, optional, or other special rights of the shares of each class of stock or series thereof and the qualifications, limitations and restrictions of such preferences and/or rights. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as thought they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian ______ TEN ENT - as tenants by the entireties (Cust) (Minor) JT TEN - as joint tenants with right of under Uniform Gifts survivorship and not as tenants to Minors Act _______ in common (State)
Additional abbreviations may also be used though not in the above list. For value received, ______________________ hereby sell, assign and transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ________________________________________________________________________________ ________________________________________________________________________________ Please print or typewrite name and address including postal zip code of assignee ________________________________________________________________________________ ________________________________________________________________________________ _________________________________________________________________________ shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint _____________________________________________ ________________________________________________________________________________ Attorney to transfer the said stock on the books of the within-named Company with full power of substitution in the premises. Dated, __________________ ________________________________________ NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITHT HE NAME AS WRIT-TEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER. SIGNATURE(S) GUARANTEED: ________________________________________________ THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCK-BROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR DESTROED, THE CORPORATION WILL REQUIRE A BOND IF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE. EX-99.A5 4 FORM OF BID NOTE 1 EXHIBIT A-5 [FORM OF BID NOTE AGREEMENT*] [Date] Conectiv 800 King Street Wilmington, DE 19899 Attention: Re: Uncommitted Credit Facility for Bid Notes Ladies/Gentlemen: We are pleased to make available to you an uncommitted credit facility for general corporate purposes on the terms set forth in this letter (the "Letter Agreement). 1. We agree to consider from time to time your requests that we make advances to you, on either an interest bearing or a discount basis ("Advances"), in an aggregate amount not to exceed at any one time outstanding the amount set forth on Schedule I hereto as the "Facility Amount", on the terms and conditions set forth below. This is not a committed line of credit and Advances hereunder, if any, shall be made by us in our sole desecration. Nothing contained herein or any other documents executed or delivered herewith shall be construed to obligate us to make any Advances. This Letter Agreement sets forth the procedures to be used in connection with your requests for our making of Advances to you from time to time on or prior to the termination hereof pursuant to paragraph 9 and, in the event that we make Advances to you hereunder, your obligations to us with respect thereto. 2. The net amount of each Advance shall be in an amount at least equal to the amount set forth on Schedule I hereto as the "Minimum Advance Amount" and shall be made upon (i) your request to us by telephone, facsimile or letter, given by any of the person listed on Exhibit A hereto or otherwise designated by you in writing ("Designated Persons"), that you wish to borrow money on a specified date, in a specified amount and for a specified term (which shall, in no event, be longer than the number of days set forth on Schedule I hereto as the "Maximum Term"); and (ii) our mutual agreement as to such date, amount and term and as to the interest rate per annum or, in the case of an Advance made on a discount basis, discount applicable to any such Advance. We shall be entitled to rely upon any instruction which we reasonably believe to have been given by a Designated Person. On the date of any such Advance, we will make such Advance available to you in same day funds by directing our administrative agent to transfer or wire the net proceeds of such Advance to an account designated in writing by a Designated Person. Promptly after the date of each Advance, our administrative agent will send you a written confirmation of such Advance and the amount and term thereof and the interest rate per annum or, in the case of an Advance made on a discount basis, the discount applicable thereto. We will enter on our books and records, the date and amount of each Advance, the interest rate (or as the case may be, the discount basis) and the term applicable thereto, as well as the date and amount of each payment made by you. 3. Prior to the making of any Advance hereunder, you shall provide us with an executed copy of this Letter Agreement; evidence of the due authorization by you of the execution, delivery and performance by you of this Letter Agreement; and such other instruments as we shall reasonably require in form and substance satisfactory to us. Your agreement and acceptance of this Letter Agreement shall constitute a representation and warranty by you that (a) the execution, delivery and performance by you of this Letter Agreement has been duly authorized by all necessary corporate action and does not contravene any law, or any contractual or legal restriction, applicable to you and (b) no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for such execution, delivery and performance or for the making of any Advance. * THIS IS A GENERIC FORM OF BID NOTE AGREEMENT. INDIVIDUAL NOTES ARE NEGOTIATED WITH EACH LENDER 2 4. Each request by you for an Advance shall constitute a representation and warranty by you, as of the making of such Advance and giving effect to the application of the proceeds therefrom, that (i) you shall have performed and complied with all agreements and conditions required hereunder, (ii) no condition or event shall exist which constitutes an Event of Default (as herein defined) or which, with the passage or time, the giving of notice, or both, would constitute an Event of Default, (iii) such Advance when made will constitute your legal, valid and binding obligation, (iv) such Advance is being incurred, and will be repaid at maturity, in the ordinary course of our business out of the cash flow generated in the normal day-to-day conduct and operation of your business, and (v) no event has occurred and no circumstance exists as a result of which the information which you have provided to us in connection herewith would include an untrue statement of a material fact or omit to state any material fact or any fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. 5. You hereby promise to pay to us or our order with respect to each Advance: (a) in the case of an Advance made on an interest bearing basis, the principal amount of such Advance made to you, on the date mutually agreed to by both parties at the time of such Advance as the maturity date thereof, together with interest on the principal amount of each Advance outstanding from time to time from and including the date on which such Advance is made until the maturity date of such Advance, at an interest rate per annum mutually agreed to by both parties at the time of such Advance, payable on the maturity date of such Advance; and (b) in the case of each Advance made on a discount basis to you, the stated or face amount of such advance on the date mutually agreed to by both parties at the time of such Advance as the maturity date thereof. 6. If any Advance or other amount is not paid when due, you shall pay interest on such amount until is paid in full at a rate per annum (the "Default Rate") equal to ______ percent ( %) above the [Bank] Prime Rate but not more than the maximum rate allowed by law. As used herein, "[Bank] Prime Rate" shall mean the rate publicly announced by the [Bank], as its prime rate. The [Bank] Prime Rate is determined from time to time by [Bank] as a means of pricing some loans to its borrowers. 7. You shall make each payment hereunder in same day funds on or before 12:00 noon (eastern time) on the day when due in lawful money or the United States of America to Account No. __________ maintained at [Bank]. All computations of interest shall be made by us on the basis of a year of 360 days, for the actual number of days (including the first day but excluding the last day) elapsed. 8. Whenever any payment to be made hereunder shall be otherwise due on a Saturday, a Sunday or other day of the year on which commercial banks are required or authorized to close in _________________(any other day being a "Business Day", Such payment shall be made on the next succeeding Business Day. 9. This Letter Agreement may be terminated at any time by either you or us by notice of such termination to the other party hereto, but no such termination shall affect your obligations with respect to the Advances hereunder outstanding at the time of such termination. 10. All notices, demands, requests, consents, approvals and other communications required or permitted hereunder must be in writing and will be effective upon receipt if delivered personally to such party, or if sent by facsimile transmission with confirmation of delivery, or by nationally recognized overnight courier service, to the address specified on Schedule I hereto or to such other address as any party may give to the other in writing for such purpose. 11. You may not assign your rights or obligations hereunder or any interest herein to any person. We may assign to one or more financial institutions or other entities all or any part of, or may grant participations to one or more financial institutions or other entities in or to all or any part of, any Advance or Advances hereunder without your consent and without notice to you. 12. You agree to pay on demand all costs, expenses (including reasonable fees and expenses of counsel) and losses, if any, incurred by us in connection with the enforcement of this Letter Agreement. 13. You agree to furnish us promptly with such financial statements or other information as we may reasonably request. 3 14. If any of the following events (each, an "Event of Default") shall occur and be continuing: (a) you shall fail to pay any amount due hereunder when the same becomes due and payable; or (b) any representation or warranty made by your (or any of your officers) in connection with any Advance or otherwise in connection herewith shall prove to have been false, erroneous or misleading in any material respect when made; or (c) you shall, without our prior written consent, merge or consolidate with or into, or convey, transfer, lease or dispose of (whether in one transaction or in a series of transactions) all or substantially all of your assets to, any person or entity; or (d) you shall fail to perform or observe any other material term, covenant or agreement in connection with any Advance or otherwise in connection herewith on your part to be performed or observed; or (e) you shall fail to pay any principal of or premium or interest on any Material Debt (as that term is defined on Schedule I attached hereto), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Material Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to such Material Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Material Debt or any such Material Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof; or (f) any material adverse change in your businesses, assets, operations, financial condition or results of operations; or (g) the entry of a Material Final Judgment against you and your failure to discharge such Material Final Judgment with in thirty days of the entry thereof; or (h) you shall generally not pay your debts as such debts become due, or shall admit in writing your inability to pay your debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against you seeking to adjudicate you as bankrupt or insolvent or seeking a reorganization for relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for you or any substantial part of your property; or you shall take any corporate action to authorize any of the actions set forth above in this subsection (h); then, upon the occurrence of any such Event of Default, we may declare all amounts payable hereunder to be forthwith due and payable, whereupon all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind all of which you hereby expressly waive; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to you under the Federal Bankruptcy Code, all such other amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by you. 15. As long as you shall have any Advances outstanding, you agree that you will maintain separate lines of credit, with one or more commercial banks, in an unutilized aggregate amount equal to the amount of all outstanding Advances. 16. Our obligations under this Letter Agreement are solely the corporate obligations of [Bank]. No recourse shall be had for the payment of any amount owing by the Bank hereunder or any other obligation or claim of or against the lender arising out of or based upon the Letter Agreement against any stockholder, employee, officer, director or incorporator of the Lender. 17. This letter agreement will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the ______________________________. 18. No modification, amendment or waiver of any provision of this Letter Agreement nor consent to any departure by you from the terms thereof, will in any event be effective unless the same is in writing and signed by us, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given. 19. This Letter Agreement (including the document and instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. 20. This Letter Agreement may be signed in any number of counterpart copies and by the parties hereto on separate counterparts, but all such copies shall constitute one and the same instrument. 4 If the terms of this Letter Agreement are satisfactory to you, please indicate your agreement and acceptance thereof by signing a counterpart of this Letter Agreement and returning it to us. Agreed to and Accept Very truly yours, CONECTIV [BANK] By: ______________________________ By: _________________________________ Name: ____________________________ Name: _______________________________ Title: ___________________________ Title _______________________________ 5 SCHEDULE I to Letter Agreement dated as of between [Bank] and Conectiv (ii) For the purpose of Sections 1 and 2 of the Letter Agreement: The "Facility Amount" is $ ______ . The "Minimum Advance Amount is "$ ______ . The "Maximum Term" is _____ days. (ii) For the purpose of Section 11 of this Letter Agreement: The address for written communication to you is: Conectiv 800 King Street Wilmington, Delaware 19899 Attention: Telephone: Fax: The address for written communications to us is: (iii) For the purpose of Section 15 of this Letter Agreement, the term "Material Debt" means indebtedness (other than indebtedness incurred under this Letter Agreement) in an amount in excess of $ _________________ . (iv) For the purpose of Section 15 of this Letter Agreement, the term "Material Final Judgment" means a judgment for damages in excess of $ _____________ for which all relief and all appeals have been exhausted and the time for seeking such relief and taking such appeals has expired. (v) For purposes of the Letter Agreement, instructions for wire transfer of funds to you are: Name: Bank ABA Number: Customer Number: Reference: 6 EXHIBIT A to the Letter Agreement dated as of ________________ between [Bank] and Conectiv For the purpose of Section 2 of the Letter Agreement, the "Designated Persons" are: Name Title _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ EX-99.A9 5 FORM OF MONEY POOL AGREEMENT 1 Exhibit A-9 FORM OF MONEY POOL AGREEMENT This Agreement is executed this day of , 199 , by and between Conectiv (hereinafter referred to as the "Parent Company"), a Delaware Corporation and a holding company registered under the terms of the Public Utility Holding Company Act of 1935 (the "Act"), Conectiv Resource Partners, Inc. (hereinafter referred to as the "Service Company"), a Delaware corporation and a mutual service company formed under the terms of the Act and ______________ , ______________ a corporation and an associate company of the Conectiv system ("Participating Company", and collectively with other associate companies that have or may in the future execute this form of Agreement, the "Participating Companies"). WITNESSETH WHEREAS, the parties hereto desire A) to make excess funds, when and as such excess funds exist, available for borrowing by other Participating Companies and B) when in need to be able to borrow excess funds made available by other Participating Companies and/or by the Parent Company; and WHEREAS, the Service Company agrees to act as agent for Participating Companies and the Parent Company for the purpose of receiving excess funds and either disbursing or investing said funds in accordance with this Agreement; and WHEREAS, the Parent Company desires, A) to the extent that it has funds available, to have an expedient vehicle for providing additional short term funding to meet the needs of Participating Companies wishing to borrow should the deposits by Participating Companies with excess funds be insufficient and B) to guarantee the return of deposits made by Participating Companies, and WHEREAS, economies and efficiencies benefiting the Participating Companies will result from the operation of the Money Pool as herein provided and borrowing from nonaffiliates will be minimized: NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties to this Agreement covenant and agree as follows: ARTICLE I - Establishment and Operation of Money Pool Section 1.1 Money Pool Accounts: The Service Company shall establish one or more banking accounts in which to hold, as agent, funds deposited by the Parent Company and funds deposited by Participating Companies having excess funds and use such account(s) to dispense funds to Participating Companies needing to borrow funds. The portion of the Money Pool account attributable to an amount deposited by a Participating Company shall be referred to as the Participating Company's Deposit Balance. Section 1.2 Deposits and Sources of Funds. Each Participating Company shall determine daily based on its current cash position, cash flow projections and other factors as deemed relevant to the officers of the Participating Company. The Treasurer of the Participating Company or his 2 designee shall advise the Treasurer of the Service Company or his designee, the level of funds being deposited or kept on deposit in the Money Pool that day. The Parent Company may deposit funds needed to meet the requirements of Participating Companies needing funds. An evidence of deposit in the form attached hereto as Exhibit A shall be executed by the Service Company to document its receipt of funds as agent. Section 1.3. Lending of Funds: The Service Company shall transfer to Participating Companies needing funds such funds as required. If insufficient funds are available in the Money Pool to meet the needs of Participating Companies, the Treasurer of the Service Corporation shall request that the Parent Company make a deposit equal to the shortfall. Each borrowing company shall be deemed to have borrowed from each depositing company an amount equal to the proportion of the depositing company's deposit to the total amount on deposit in the Money Pool. Nothing in this Agreement restricts the ability of the Parent Company to lend funds directly to any associate company. Section 1.4. Loans Repayable Upon Demand. All loans made with Money Pool deposits shall be repayable upon demand, when and to the extent demand is made by any Participating Company making a deposit. Section 1.5. Parent Guarantee of Deposits. Subject to the provisions of Section 3.1 below, the Parent Company wishes to guarantee the return of deposits made by any Participating Company by agreeing to make a capital contribution to any depositing Participating Company if, and only to the extent that, following demand for repayment, a deposit is not returned to any Participating Company. Section 1.6. Limitations on Borrowing of Funds. Any Participating Company may borrow funds deposited in the Money Pool by Participating Companies with excess funds or by the Parent Company upon execution and delivery to the Service Company of a Money Pool Note in the form attached hereto as Exhibit B. Under no circumstances may the Parent Company be a borrower. No funds may be transferred to the Parent Company in excess of funds previously deposited by, and not previously returned to, the Parent Company. Borrowing by Delmarva Power & Light Company and Atlantic City Electric Company shall not exceed the amount of short-term borrowing authorized by an appropriate state public utility commission or by the Securities and Exchange Commission ("SEC") under the Act, if applicable, and borrowing by any other Participating Company shall not exceed $25 million at any one time outstanding. Section 1.7. Interest Earned and Interest Paid. All funds deposited in the Money Pool will earn interest and all funds borrowed from the Money Pool shall bear interest based on each Participating Company's daily average cash position. The cost of money for all borrowings from the Money Pool and the investment rate for all moneys deposited in the Money Pool will be the same. rate (the "Money Pool Rate"). This rate will be determined by using the interest expense incurred during the month with respect to external borrowings incurred by the Parent Company to make deposits in the Money Pool less any interest income generated by the Money Pool. The total net expense for a month will be divided by the Money Pool's average net daily investment/borrowing position to derive the Money Pool Rate for the month. If there are no such external borrowings nor external investments, then the Money Pool Rate for borrowings and/or 2 3 investments will be the prior month's average Federal Funds Rate as published in the Federal Reserve Statistical Release Publication H.15 (519). Interest will be allocated for payment by each Participating Company which has borrowed based on the proportion of the borrowing company's Money Pool debt to the total borrowed from Participating Companies and/or the Parent Company on any day during the month. The interest payment shall be made monthly by debit to the borrowing company's Money Pool Deposit Balance and credit to the lending company's Money Pool Deposit Balance. Interest earned in excess of interest expense will be allocated among depositing companies on the basis of the proportion of each Participating Company's Money Pool Deposit Balance to the total Money Pool funds. Section 1.8. Use of Excess Funds. Any funds not required by the Money Pool to make loans to Participating Companies shall be invested in one or more short-term investments in accordance with the Conectiv System's Investment Guidelines as approved from time to time by the Board of Directors of the Parent Company or by officers of the Parent Company, if such authority is delegated to such officers by the Parent Company Board of Directors. Section 1.9. Clearing Affiliate Transactions by Book Entry. Amounts owed by one Participating Company to another Participating Company may be paid and payment may be received by debiting the Money Pool Deposit Balance of the Participating Company making the payment and crediting the Money Pool Deposit Balance of the Participating Company receiving the payment. Settlement sheets reflecting all such book entry payments shall be sent to all Participating Companies promptly. ARTICLE II - COMPENSATION Section 2.1. Compensation Based on Cost. As compensation for the services to be rendered hereunder, each Participating Company shall pay to the Service Company all costs which reasonably can be identified and related to the operation of the Money Pool, such cost to be determined, allocated and paid in accordance with the Service Agreement as approved by the SEC under Section 13 of the Act and executed by the Parent Company, Participating Companies and the Service Company. ARTICLE III - TERM Section 3.1. Term. This Agreement shall become effective as of the day of above written, and shall continue in force until terminated by either party. The Parent Company shall have the right, upon just cause determined in the sole discretion of the Treasurer of the Parent Company, to declare that deposits loaned to a particular Participating Company will not qualify for the guarantee set forth in Section 1.5 above. Any Participating Company whose loans are thus disqualified will thereafter only be permitted to participate as a depositor and not as a borrower from the Money Pool. This Agreement shall also be subject to termination or modification at any time, without notice, if and to the extent performance under this Agreement may conflict with the Act or with any rule, regulation or order of the SEC adopted before or after the date of this Agreement or any other regulatory body. 3 4 ARTICLE IV - MISCELLANEOUS Section 4.1. Accounting. All accounts and records of the Service Company shall be kept in accordance with the General Rules and Regulations promulgated by the SEC pursuant to the Act, in particular, the Uniform System of Accounts for Mutual Service Companies and Subsidiary Service Companies in effect from and after the date hereof, except as specifically approved by the SEC. Section 4.2. Addition of New Parties. Other existing wholly-owned subsidiaries and new direct or indirect wholly-owned subsidiaries of the Parent Company, which may be established after the effective date of this Agreement, may become additional Participating Companies (collectively, the "New Participating Companies") subject to this Agreement by execution of this form of agreement, as it may be amended at that time. In addition, the parties hereto shall make such changes in the operation of the Money Pool and the method of assigning, distributing or allocating interest income and interest expense among the Participating Companies and the New Participating Companies under this Agreement as may become necessary. Section 4.3. Access to Books and Records. The Service Company shall permit a Participating Company access to its accounts and records, including the basis and computation of allocations. Section 4.4. Subject to Regulatory Approvals. This Agreement and any amendments hereto shall not be effective until any necessary regulatory approvals have been obtained. Section 4.5. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written. CONECTIV as lender and guarantor By: _________________________________________ [Title] CONECTIV, RESOURCE PARTNERS, INC. As Agent on behalf of Participating Companies By: _________________________________________ [title] [PARTICIPATING COMPANY] By: _________________________________________ [title] 4 EX-99.B1 6 FORM OF STANDARD CONECTIV U/A (COMMON STOCK) 1 Exhibit B-1 [NAME OF ISSUER] COMMON STOCK STANDARD PURCHASE PROVISIONS INCLUDING FORM OF PURCHASE AGREEMENT [NAME OF ISSUER] STANDARD PURCHASE PROVISIONS - COMMON STOCK From time to time, [Name of Issuer], a corporation organized and existing under the laws of the State of Delaware (the "Company") may enter into purchase agreements that provide for the sale of designated securities to the purchaser or purchasers named therein. The standard provisions set forth herein may be incorporated by reference in any such purchase agreement (the "Purchase Agreement"). The Purchase Agreement, including the provisions incorporated therein by reference, is herein sometimes referred to as "this Agreement." The term "Common Stock" shall mean the Common Stock of the Company. Unless otherwise defined herein, terms defined in the Purchase Agreement are used herein as therein defined. The Company has filed, in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder (collectively called the "Act"), with the Securities and Exchange Commission (the "Commission"), a registration statement on Form S-3 (including a prospectus), relating to the Company's Common Stock, which pursuant to Item 12 of Form S-3 incorporates by reference documents which the Company has filed in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively called the "Exchange Act"). Such registration statement has been declared effective by the Commission. Promptly upon the 2 execution of this Agreement, the Company will prepare a prospectus supplement relating to the Common Stock to be sold by the Company pursuant to the applicable Purchase Agreement (the "Prospectus Supplement"). The Company has furnished to you, for use by the Underwriters (as defined herein) and dealers, copies of one or more preliminary prospectuses and the documents so incorporated therein (each thereof, including the documents so incorporated therein, is herein called the "Preliminary Prospectus"). The terms Registration Statement and Prospectus shall have the meanings ascribed to them in the Purchase Agreement. 1. Introductory. The Company proposes to issue and sell from time to time Common Stock registered under the Registration Statement. The shares of Common Stock involved in any such offering are hereinafter referred to as the "Shares," and the firm or firms, as the case may be, which agree to purchase the same are hereinafter referred to as the "Underwriters" of the Shares. The terms "you" and "your" refer to those Underwriters who sign the Purchase Agreement either on behalf of themselves only or on behalf of themselves and as representatives of the several Underwriters named in Schedule A thereto, as the case may be. Shares to be purchased by Underwriters are herein referred to as "Underwriters' Shares," and any Shares to be purchased pursuant to Delayed Delivery Contracts (as defined below) as hereinafter provided are herein referred to as "Contract Shares." 2. Delivery and Payment. The Company will deliver the certificates for the Shares to you for the accounts of the Underwriters at the place specified in the Purchase Agreement, against payment of the purchase price by wire transfer of immediately available funds (as agreed to by the parties and specified in the Purchase Agreement), at the time set forth in this Agreement or at such other time not later than seven full business days thereafter as you and the Company determine, such time being herein referred to as the "time of purchase." Unless otherwise provided for in the Purchase Agreement, the certificates for the Underwriters' Shares so to be delivered will be in such denominations and registered in such names as you request in writing not later than 10.00 A.M.,(1) on the third business day prior to the time of purchase, or, if no such request is received, in the names of the respective Underwriters in the denominations agreed to be purchased by them pursuant to this Agreement. For the purpose of expediting the checking of the certificates for the Underwriters' Shares, the Company agrees to make such certificates available to you at the place specified in the Purchase Agreement registered in such names and denominations as you shall have requested not later than 10.00 A.M. on the first business day preceding the time of purchase.(2) - -------- (1) As used herein, "business day" shall mean a day on which the New York Stock Exchange is open for trading. (2) Times mentioned herein are New York City Time 2 3 If any Purchase Agreement provides for sales of Shares pursuant to delayed delivery contracts, the Company ___________________ authorizes the Underwriters to solicit offers to purchase Contract Shares pursuant to delayed delivery contracts substantially in the form of Schedule I attached hereto (the "Delayed Delivery Contracts") with such changes therein as the Company may approve. Delayed Delivery Contracts are to be with institutional investors, including commercial and savings banks, insurance companies, pension funds, investment companies, and educational and charitable institutions. At the time of purchase the Company will pay you as compensation, for the accounts of the Underwriters, the compensation set forth in such Purchase Agreement in respect of the principal amount of Contract Shares. The Underwriters will not have any responsibility in respect of the validity or the performance of Delayed Delivery Contracts. If the Company executes and delivers Delayed Delivery Contracts, the Contract Shares shall be deducted from the Shares to be purchased by the several Underwriters and the aggregate principal amount of Shares to be purchased by each Underwriter shall be reduced pro rata in proportion to the principal amount of Shares set forth opposite each Underwriter's name in such Purchase Agreement, except to the extent that you determine that such reduction shall be otherwise allocated and so advise the Company. 3. Certain Covenants of the Company. The Company agrees: a) As soon as possible after the execution and delivery of this Agreement to file, or mail for filing, the Prospectus with the Commission pursuant to its Rule 424 under the Act and, if and when required at any time after such execution and delivery, to file amendments to the applications the Company has previously filed with any state regulatory agencies having jurisdiction to govern the Company's issuance of its securities setting forth, among other things, the necessary information with respect to the price and the terms of the Shares and the terms of offering of the Shares; b) To file no amendment or supplement to the Registration Statement or prospectus (other than a required filing under the Exchange Act) subsequent to the execution of this Agreement and prior to the time of purchase to which you object in writing; c) To furnish such proper information as may be required and otherwise to cooperate in qualifying the Shares for sale under the laws of such jurisdictions as you may designate and in determining their eligibility for investment under the laws of such jurisdictions; provided that the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; d) To the extent not previously furnished to you, to furnish to you two signed copies of the Registration Statement, as initially filed with the Commission, of all amendments thereto, and of all documents incorporated by reference therein (including all exhibits filed therewith, 3 4 other than exhibits which have previously been furnished to you), two signed copies of each consent and certificate of independent accountants and of each other person who by his profession gives authority to statements made by him and who is named in the Registration Statement as having prepared, certified or reviewed any part thereof, and to furnish to you sufficient unsigned copies of the foregoing (other than exhibits, including consents filed as exhibits, to the Registration Statement) for distribution of a copy to you and to each of the other Underwriters; e) To deliver to the Underwriters without charge in New York City as soon as practicable after the execution and delivery of this Agreement and thereafter from time to time to furnish to the Underwriters, without charge, as many copies of the Prospectus in final form and any documents incorporated by reference therein at or after the date thereof (or as amended or supplemented, if the Company shall have made any amendment or supplement after the effective date of the Registration Statement) as you or the respective Under-writers may reasonably request for the purposes contemplated by the Act; f) To advise you promptly (confirming such advice in writing) of any official request made by the Commission for amendments to the Registration Statement or Prospectus or for additional information with respect thereto, or of official notice of institution of proceedings for, or the entry of, a stop order suspending the effective ness of the Registration Statement and, if such order should be entered by the Commission, to make every reasonable effort to obtain the lifting or removal thereof as soon as possible, or of the suspension of qualification of the Shares for offering or sale in any jurisdiction or of the initiation or threatening of any proceeding for any such purpose; g) To apply the net proceeds from the sale of the Shares in the manner set forth in the Prospectus; h) To furnish to you during a period of five years from the time of purchase (i) as soon as practicable after the end of each fiscal year, a copy of its annual report to shareholders for such year, (ii) from time to time, copies of any reports or other communications which it shall file with the Commission or any governmental agency substituted therefor under the Exchange Act or sent to its public stockholders, or holders of the Shares, and (iii) such other information as you may from time to time reasonably request regarding the financial condition and operations of the Company; i) To furnish to any other Underwriter copies of such of the financial statements, reports or other information referred to in the foregoing subparagraphs (h)(i) and (ii) as such Underwriter may, from time to time during the period you are entitled to receive them, request; 4 5 j) To advise the Underwriters of the happening of any event known to the Company within the time during which a prospectus relating to the Shares is required to be delivered under the Act which, in the judgment of the Company, would require the making of any change in the Prospectus or any amended or supplemented Prospectus or in the information incorporated by reference therein so that as thereafter delivered to purchasers such Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and on request to prepare and furnish to the Underwriters and to dealers and other persons designated by you such amendments or supplements (including appropriate filings under the Exchange Act) to the Prospectus as may be necessary to reflect any such change, provided that the Company shall be so obligated only so long as the Company is notified of unsold allotments (failure by the Underwriters to so notify the Company cancels the Company's obligation under this Section 3(j)); k) As soon as practicable, to make generally available to its security holders an earnings statement (as contemplated by Rule 158 under the Act) covering a period of twelve months after the effective date of the Registration Statement; l) To pay the fees and expenses of counsel for the Underwriters, and to reimburse the Underwriters for their reasonable out-of-pocket expenses incurred in contemplation of the performance of this Agreement, in the event that the Shares are not delivered to and taken up and paid for by the Underwriters hereunder for any reason whatsoever except the failure or refusal of any Underwriter to take up and pay for Shares for some reason not permitted by the terms of this Agreement, the Underwriters agreeing to pay the fees and expenses of counsel for the Underwriters in any other event; m) To pay all expenses, fees and taxes (other than transfer taxes and fees and disbursements of counsel for the Underwriters except as set forth under 3(1) above or (iv) below) in connection with (i) the preparation and filing of the Registration Statement, each Preliminary Prospectus and the Prospectus, any documents incorporated by reference therein at or after the date thereof and any amendments or supplements thereto, and the printing or reproduction and furnishing of copies of each thereof to the Underwriters and to dealers, (ii) the issue, sale and delivery of the Shares, (iii) the printing or reproduction of this Agreement and the opinions and letters referred to in Section 4(a) hereof, (iv) the qualification of the Shares for sale and determination of their eligibility for investment under state laws as aforesaid, including the reasonable legal fees and all filing fees and disbursements of counsel for the Underwriters and all other filing fees, 5 6 and the printing or reproduction and furnishing of copies of the "Blue Sky Survey" and the "Legal Investment Survey" to the Underwriters and to dealers, (v) the rating of the Shares by national rating agencies and (vi) the performance of the Company's other obligations hereunder; n) To furnish to you as early as practicable prior to the time of purchase, but no later than two business days prior thereto, a copy of the latest available unaudited interim consolidated financial statements, if any, of the Company which have been read by the Company's independent public accountants as stated in their letter to be furnished pursuant to Section 4(a) of this Agreement; and o) If a public offering of the Shares is to be made, not to offer or sell any of its Common Stock prior to thirty days after the time of purchase without your consent (except pursuant to employee benefit or dividend reinvestment plans). 4. Conditions of Underwriters' Obligations. The several obligations of the Underwriters hereunder are subject to the following conditions: a) That, at the time of purchase, you shall receive the signed opinions of counsel for the Company and counsel for the Underwriters, substantially in the forms heretofore furnished to you, addressed to the Underwriters (with reproduced or conformed copies thereof for each of the other Underwriters); and that, at the time of purchase, you shall receive the signed letters of the independent public accountants of the Company, substantially in the form heretofore furnished to you and in substance satisfactory to you addressed to the Underwriters (with reproduced or conformed copies thereof for each of the other Underwriters); b) That, at or before 5:30 P.M. on the date hereof, or at such later time and day as you may have from time to time consented to in writing or by telephone, confirmed in writing, such orders of state authorities which are necessary to permit the issue, sale and delivery of the Shares, if any, shall have been issued; at the time of purchase such orders shall be in full force and effect; and prior to such time of purchase no stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Act by the Commission and at such time of purchase no proceedings therefor shall be pending or threatened; c) That, at the time the Registration Statement became effective, the Registration Statement did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that at the time of purchase the Prospectus shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, other than any statement 6 7 contained in, or any matter omitted from, the Registration Statement or the Prospectus in reliance upon, and in conformity with, information furnished in writing by or on behalf of any Underwriter through you to the Company expressly for use with reference to such Underwriter in the Registration Statement or Prospectus; d) That, subsequent to the respective dates as of which information is given in the Registration Statement and in the Prospectus, at the time the Prospectus is first filed, or mailed for filing, pursuant to Rule 424 under the Act, and prior to the time of purchase, in your opinion no material adverse change, or any development involving a prospective material adverse change, in the condition of the Company, financial or otherwise, shall have taken place (other than as referred to in or contemplated by the Registration Statement and Prospectus as of such time); e) That the Company shall have performed all of its obligations under this Agreement which are to be performed by the terms hereof at or before the time of purchase; and f) That, since the date of this Agreement, there shall not have occurred any downgrading, nor shall any notice have 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 (other than as referred to in or contemplated by the Registration Statement and the Prospectus as of such time); g) That the Company shall, at the time of purchase, deliver to you (with reproduced or conformed copies thereof for each of the other Underwriters) a signed certificate of two of its executive officers stating that, subsequent to the respective dates as of which information is given in the Registration Statement and in the Prospectus, at the time the Prospectus is first filed, or mailed for filing, pursuant to Rule 424 under the Act, and prior to the time of purchase, no material adverse change, or any development involving a prospective material adverse change, in the condition of the Company, financial or otherwise, shall have taken place (other than as referred to in or contemplated by the Registration Statement and Prospectus as of such time) and also covering the matters set forth in (c) and (e) of this Section 4. h) That the Company shall have accepted Delayed Delivery Contracts in any case where sales of Contract Shares arranged by the Underwriters have been approved by the Company. 5. Termination of Agreement. The obligations of the several Underwriters hereunder shall be subject to termination in your absolute discretion, if, at any time prior to the time of purchase, trading in securities on the New York Stock 7 8 Exchange shall have been suspended (other than a temporary suspension to provide for an orderly market) or minimum prices shall have been established on the New York Stock Exchange, or if a banking moratorium shall have been declared either by the United States or New York State authorities, or if after the execution of this Agreement the United States shall have declared war in accordance with its constitutional processes or there shall have occurred any material outbreak or escalation of hostilities or other national or international calamity or crisis of such magnitude in its effect on the financial markets of the United States as, in your judgment, to make it impracticable to market the Shares. If you elect to terminate this Agreement as provided in this Section 5, the Company and each other Underwriter shall be notified promptly in writing or by telephone, confirmed in writing. If the sale to the Underwriters of the Underwriters' Shares as herein contemplated is not carried out by the Underwriters for any reason permitted hereunder or if such sale is not carried out because the Company shall be unable to comply with any of the terms thereof, the Company shall not be under any obligation or liability under this Agreement (except to the extent provided in Sections 3(1), 3(m), 7(b) and 9 hereof), and the Underwriters shall be under no obligation or liability to the Company (except to the extent provided in Sections 8(b) and 9 hereof) or to one another under this Agreement. 6. Increase in Underwriters' Commitments. If any Underwriter shall default in its obligation to take up and pay for the Shares to be purchased by it hereunder and if the number of Shares which all Underwriters so defaulting shall have so failed to take up and pay for does not exceed 10% of the total number of Shares, the non-defaulting Underwriters shall take up and pay for (in addition to the number of Shares they are obligated to purchase pursuant to this Agreement) the number of Shares agreed to be purchased by all such defaulting Underwriters, as herein provided. Such Shares shall be taken up and paid for by such non-defaulting Underwriter or Underwriters in such number as you may designate with the consent of each Underwriter so designated or, in the event no such designation is made, such Shares shall be taken up and paid for by all non-defaulting Underwriters pro rata in proportion to the number of Shares set opposite the names of all such non- defaulting Underwriters in Schedule A to the Purchase Agreement. Without relieving any defaulting Underwriter of its obligations hereunder, the Company agrees with the non-defaulting Underwriters that it will not sell any Shares hereunder unless all of the Shares are purchased by the Underwriters (or by substituted Underwriters selected by you with the approval of the Company or selected by the Company with your approval). If a new underwriter or underwriters are substituted by the Underwriters or by the Company for a defaulting Underwriter or Underwriters in accordance with 8 9 the foregoing provision, the Company or you will have the right to postpone the time of purchase for a period of not exceeding five business days in order that necessary changes in the Registration Statement and Prospectus and other documents may be effected. The term Underwriter as used in this Agreement will refer to and include any underwriter substituted under this Section 6 with like effect as if such substituted underwriter had originally been named in Schedule A to the Purchase Agreement. 7. Warranties and Representations of and Indemnity by the Company. a) The Company warrants and represents that, when the Registration Statement became effective, the Registration Statement complied in all material respects, and, when the Prospectus is first filed, or mailed for filing, pursuant to Rule 424 under the Act, the Prospectus will comply in all material respects with the provisions of the Act, and that neither will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Company makes no warranty or representation with respect to any statement contained in, or any matter omitted from, the Registration Statement or the Prospectus in reliance upon and in conformity with information furnished in writing by or on behalf of any Underwriter through you to the Company expressly for use with reference to the Underwriter in the Registration Statement or Prospectus. The Company also warrants and represents that the documents incorporated by reference in the Prospectus comply in all material respects with the requirements of the Exchange Act and any additional documents deemed to be incorporated by reference in the Prospectus will, when they are filed with the Commission, comply in all material respects with the requirements of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading. b) The Company agrees to indemnify and hold harmless each Underwriter, and any person who controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and against any loss, expense, liability or claim (including the reasonable fees and expenses of counsel and other reasonable expenses in connection with investigating, defending or settling any such claim) which arises out of or is based upon any alleged untrue statement of a material fact in the Registration Statement, any prospectus contained in the Registration Statement at the time it became effective or the Prospectus, or any related 9 10 preliminary prospectus, or arises out of or is based upon any alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein not misleading. The foregoing shall not cover any such loss, expense, liability or claim, however, which arises out of or is based upon any alleged untrue statement of a material fact contained in, and in conformity with information furnished in writing by or on behalf of such Underwriter through you to the Company expressly for use with reference to the Underwriter in, any such documents or arises out of or is based upon any alleged omission to state a material fact in connection with such information required to be stated in any such documents or necessary to make such information not misleading. If any action is brought against an Underwriter or controlling person in respect of which indemnity may be sought against the Company pursuant to the foregoing paragraph, such Underwriter shall promptly notify the Company in writing or by telephone, confirmed in writing, of the institution of such action and the Company shall assume the defense of such action, including the employment of counsel and payment of expenses. Such Underwriter or controlling person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless the employment of such counsel shall have been authorized in writing by the Company in connection with the defense of such action or the Company shall not have employed counsel to have charge of the defense of such action or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses of one counsel (in addition to local counsel) for all indemnified parties selected by you shall be borne by the Company. Anything in this paragraph to the contrary notwithstanding, the Company shall not be liable for any settlement of any such claim or action effected without its written consent. The Company's indemnity agreement contained in this Section 7(b) and its warranties and representations contained in this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of any Underwriter or controlling person, and shall survive any termination of this Agreement or the issuance and delivery of the Shares. The Company agrees promptly to notify the Underwriters of the commencement of any litigation or proceedings against the Company or any of its officers or directors in connection with the issue and sale of the Shares or with such Registration Statement or Prospectus. 8. Warranties and Representations of the Indemnity by Underwriters. a) Each Underwriter warrants and represents that the information furnished in writing by or on behalf of such Underwriter through you to the 10 11 Company expressly for use with reference to such Underwriter in the Registration Statement at the time it became effective or the Prospectus, or any related preliminary prospectus does not contain an untrue statement of a material fact and does not omit to state a material fact in connection with such information required to be stated in the Registration Statement at the time it became effective or the Prospectus, or any related preliminary prospectus or necessary to make such information not misleading. Each Underwriter, in addition to other information furnished by such Underwriter or on its behalf through you to the Company in writing expressly for use with reference to such Underwriter in the Registration Statement and Prospectus, hereby furnishes to the Company in writing expressly for use with reference to such Underwriter the statements with respect to the terms of offering of the Shares by the Underwriters set forth on the cover page of the Prospectus Supplement and under "underwriting" therein. b) Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors and its officers from and against any loss, expense, liability or claim (including the reasonable fees and expenses of counsel and other reasonable expenses in connection with investigating, defending or settling any such claim) which arises out of or is based upon any alleged untrue statement of a material fact contained in, and in conformity with information furnished in writing by or on behalf of such Underwriter through you to the Company expressly for use with reference to such Underwriter in, the Registration Statement, any prospectus contained in the Registration Statement at the time it became effective or the Prospectus, or any related preliminary prospectus, or arises out of or is based upon any alleged omission to state a material fact in connection with such information required to be stated in such documents or necessary to make such information not misleading. If any action is brought against the Company or any such person in respect of which indemnity may be sought against any Underwriter pursuant to the foregoing paragraph, the Company or such person shall promptly notify such Underwriter in writing or by telephone, confirmed in writing, of the institution of such action and such Underwriter shall assume the defense of such action, including the employment of counsel and payment of expenses. The Company or such person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Company or such person unless the employment of such counsel shall have been authorized in writing by such Underwriter in connection with the defense of such action or such Underwriter shall not have employed counsel to have charge of the defense of such action or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to such Underwriter (in which case such Underwriter shall not have the right to direct the defense of such action on behalf 11 12 of the indemnified party or parties), in any of which events such fees and expenses for all indemnified parties of one counsel (in addition to local counsel) selected by the Company shall be borne by such Underwriter. Anything in this paragraph to the contrary notwithstanding, no Underwriter shall be liable for any settlement of any such claim or action effected without the written consent of such Underwriter. The indemnity agreement on the part of each Underwriter contained in this Section 8(b) shall remain in full force and effect regardless of any investigation made by or on behalf of Company or such person, and shall survive any termination of this Agreement or the issuance and delivery of the Shares. Each Underwriter agrees promptly to notify the Company of the commencement of any litigation or proceedings against such Underwriter in connection with the issue and sale of the Shares or with such Registration Statement or Prospectus. 9. Contribution. If the indemnification provided for in Section 7(b) or 8(b) above is unavailable in respect of any losses, expenses, liabilities or claims referred to therein, then the parties entitled to indemnification by the terms thereof shall be entitled to contribution to liabilities and expenses except to the extent that contribution is not permitted under the Act or the Exchange Act. In determining the amount of contribution to which the respective parties are entitled, there shall be considered the relative benefits received by each party from the offering of the Shares (taking into account the portion of the proceeds of the offering realized by each), the parties' relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and any other equitable considerations appropriate under the circumstances. The Company and the Underwriters and such controlling persons agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Underwriters and such controlling persons were treated as one entity for such purpose). Notwithstanding the provisions of this Section 9, no indemnifying Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by such Under- writer and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter otherwise has been required to pay by reason of such untrue statement or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The contribution agreement contained in this Section 9 shall remain in full force and effect regardless of any investigation made by or on behalf of any Underwriter or the Company or any of its officers or directors or any controlling person and shall survive any termination of this Agreement or the issuance and delivery of the Shares. 10. Notices. All statements, requests, notices and agreements shall be in writing or by telegram and, if to the Underwriters, shall be sufficient in all respects if delivered or sent by registered mail to the address furnished in writing for the purpose of such statements, requests, notices and agreements hereunder, and, if to the 12 13 Company shall be sufficient in all respects if delivered or sent by registered mail to the Company at [Issuer/Address], Attention: . 11. Construction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this agreement. 12. The Agreement herein set forth has been and is made solely for the benefit of the Underwriters and the controlling persons, directors and officers referred to in Section 8 hereof, and their respective successors, assigns, executors and administrators, and no other person shall acquire or have any right under or by virtue of this Agreement. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation (including, without limitation, any purchaser of the Securities from an Underwriter or any subsequent holder thereof) any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. The term "successor" as used in this Agreement shall not include any purchaser, as such purchaser, of any Shares from any Underwriter or any subsequent holder thereof. 13. Counterparts. This Agreement may be executed in any number of counterparts which, taken together, shall constitute one and the same instrument. 13 14 Schedule I DELAYED DELIVERY CONTRACT Dated: ______________, 199 [NAME OF ISSUER] [ADDRESS] Attention: Dear Sirs: The undersigned hereby agrees to purchase from [Name of Issuer] (the "Company"), and the Company agrees to sell to the undersigned, ___________________ shares of the Company's [state title of issue] (the "Shares") offered by the Company's Prospectus dated __________, 199 and a Prospectus Supplement dated ___________ , 199 , receipt of copies of which is hereby acknowledged, at a purchase price of $ ____________ per share and on the further terms and conditions set forth in this contract. The undersigned agrees to purchase such Shares in the amounts and on the delivery dates (the "Delivery Dates") set forth below: Delivery Number of Date Shares -------- --------- - ---------------- --------------- - ---------------- --------------- - ---------------- --------------- Payment for the Shares which the undersigned has agreed to purchase on each Delivery Date shall be made to the Company or its order by wire transfer of immediately 14 15 available funds at the Corporate Trust Office of _____________ (or at such other place as the undersigned and the Company shall agree) at 11:00 A.M., New York City Time, on such Delivery Date upon issuance and delivery to the undersigned of the Shares to be purchased by the undersigned on such Delivery Date and, unless otherwise provided herein, registered in such names as the undersigned may designate by written or telegraphic communications addressed to the Company not less than five full business days prior to such Delivery Date. The obligation of the Company to sell and deliver, and of the undersigned to take delivery of and make payment for, Shares on each Delivery Date shall be subject to the conditions that (1) the purchase of Shares to be made by the undersigned shall not at the time of delivery be prohibited under the laws of the jurisdiction to which the undersigned is subject, (2) the sale of the Shares by the Company pursuant to this contract shall not at the time of delivery be prohibited under the laws of any jurisdiction to which the Company is subject and (3) the Company shall have sold, and delivery shall have taken place, to the Underwriters of such number of the Shares as is to be sold and delivered to them. In the event that Shares are not sold to the undersigned because one of the foregoing conditions is not met, the Company shall not be liable to the undersigned for damages arising out of the transactions covered by this contract. Promptly after completion of the sale and delivery to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by copies of the opinions of counsel for the Company delivered to the Underwriters. Failure to take delivery of and make payment for Shares by any purchaser under any other Delayed Delivery Contract shall not relieve the undersigned of its obligations under this contract. The undersigned represents and warrants that (a) as of the date of this contract, the undersigned is not prohibited under the laws of the jurisdictions to which the undersigned is subject from purchasing the Shares hereby agreed to be purchased and (b) the undersigned does not contemplate selling the Shares which it has agreed to purchase hereunder prior to the Delivery Date therefor. This contract will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. This contract shall be governed by and construed in accordance with the laws of the State of New York. This contract may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. It is understood that the acceptance of any Delayed Delivery Contract is in the Company's sole discretion and, without limiting the foregoing, need not be on a first-come, first-served basis. If the contract is acceptable to the Company, it is requested 15 16 that the Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding contract between the Company and the undersigned when such counterpart is so signed. Yours very truly, ______________________________________ By____________________________________ ______________________________________ ______________________________________ Address Accepted, as of the date first above written [Name of Issuer] By_________________________________ PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING The name and telephone and department of the representative of the Purchaser with whom details of delivery on the Delivery Date may be discussed are as follows: (Please print.) Telephone No. Name (Including Area Code) Department 16 17 [NAME OF ISSUER] PURCHASE AGREEMENT COMMON STOCK [Name of Issuer] [ADDRESS] Dear Sirs: Referring to the Common Stock of [Name of Issuer] (the "Company") covered by the registration statement on Form S-3 (No. 333-______), such registration statement including (i) the prospectus included therein, dated ______________ , 199_ in the form first filed under Rule 424 and any additional prospectus supplements relating to the Common Stock filed under Rule 424 (such prospectus as so supplemented, including each document incorporated by reference therein is hereinafter called the "Prospectus") and (ii) all documents filed as part thereof or incorporated by reference therein, is hereinafter called the "Registration Statement", on the basis of the representations, warranties and agreements contained in this Agreement, but subject to the terms and conditions herein set forth, the purchaser or purchasers named in Schedule A hereto (the "Underwriters") agree to purchase, severally, and the Company agrees to sell to the Underwriters, severally, the respective number of shares of Common Stock having the terms described below (the "Shares") set forth opposite the name of each Underwriter on Schedule A hereto. The price at which the Shares shall be purchased from the Company by the Underwriters shall be $____ per share. The initial public offering price shall be $____ per share. The Shares will be offered by the Underwriters as set forth in the Prospectus relating to such Shares. The Shares will have the following terms: 17 18 Title of Shares: Payment for the Shares shall be made in the following funds: _______________________ The "time of purchase" shall be: _______________________ The place at which the Shares may be checked and packaged shall be: _______________________ The place(s) at which the Shares shall be delivered and sold shall be: _______________________ Delayed Delivery Contracts: _______________________ 18 19 Notices to Underwriters shall be sent to the following address(es) or telecopier number(s): If we are acting as Representative(s) for the several Underwriters named in Schedule A hereto, we represent that we are authorized to act for such several Underwriters in connection with the transactions contemplated in this Agreement, and that, if there are more than one of us, any action under this Agreement taken by any of us will be binding upon all the Underwriters. All of the provisions contained in the document entitled "[Name of Issuer] Standard Purchase Provisions - Equity Securities", a copy of which has been previously furnished to us, are hereby incorporated by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein. If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon it will become a binding agreement between the Company and the several Underwriters in accordance with its terms. Very truly yours, [Firm Name] By _____________________________ Title: ______________________ [Firm Name] By _____________________________ Title: ______________________ Acting on behalf of and as Representative(s) of the several Underwriters named in Schedule A hereto.* - ------------------- * To be deleted if the Purchase Agreement is not executed by one or more Underwriters acting as Representative(s) of the Underwriters for purposes of this Agreement. 19 20 The foregoing Purchase Agreement is hereby confirmed as of the date first above written [NAME OF ISSUER] By ____________________________ Title: _____________________ _______________________________ 20 21 SCHEDULE A Number of Name of Underwriters Shares Total ========== 21 EX-99.B2 7 FORM OF STANDARD CONECTIV U/A (DEBT) 1 Exhibit B-2 [NAME OF ISSUER] DEBT SECURITIES STANDARD PURCHASE PROVISIONS INCLUDING FORM OF PURCHASE AGREEMENT [NAME OF ISSUER] STANDARD PURCHASE PROVISIONS - DEBT SECURITIES From time to time, [Name of Issuer], a corporation organized and existing under the laws of the State of Delaware (the "Company"), may enter into purchase agreements that provide for the sale of designated securities to the purchaser or purchasers named therein. The standard provisions set forth herein may be incorporated by reference in any such purchase agreement (the "Purchase Agreement"). The Purchase Agreement, including the provisions incorporated therein by reference, is herein sometimes referred to as "this Agreement." The term "Securities" shall mean the Debt Securities of the Company to be sold by the Company pursuant to the applicable Purchase Agreement. Unless otherwise defined herein, terms defined in the Purchase Agreement are used herein as therein defined. The Company has filed, in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder (collectively called the "Act"), with the Securities and Exchange Commission (the "Commission"), a registration statement on Form S-3 (including a prospectus), relating to the Securities, which pursuant to Item 12 of Form S-3 incorporates by reference documents which the Company has filed in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively called the "Exchange Act"). Such registration statement has been declared effective by the Commission. Promptly upon the execution of this Agreement, the Company will prepare a prospectus supplement relating to the Securities (the "Prospectus Supplement"). The Company has furnished to you, for use by the Underwriters (as defined herein) and dealers, copies of one or more preliminary prospectuses and the documents so incorporated therein (each thereof, including the doc- uments so incorporated therein, is herein called the "Preliminary Prospectus"). The terms Registration Statement and Prospectus shall have the meanings ascribed to them in the Purchase Agreement. 2 1. Introductory. The Company proposes to issue and sell from time to time Securities registered under the Registration Statement. The Securities will be issued pursuant to an Indenture, dated , to as Trustee (the "Trustee"), as supplemented and amended, including a supplemental indenture pertaining to the particular series of Securities involved in the offering (the "Indenture"), and will have varying designations, interest rates and times of payment of any interest, maturities, redemption provisions and other terms, with all such terms for any particular series of the Securities being determined at the time of the sale and set forth in the Purchase Agreement and the Prospectus Supplement relating to such series of Securities. The Securities involved in any such offering are hereinafter referred to as the "Purchased Securities," and the firm or firms, as the case may be, which agree to purchase the same are hereinafter referred to as the "Underwriters" of the Purchased Securities. The terms "you" and "your" refer to those Underwriters who sign the Purchase Agreement either on behalf of themselves only or on behalf of themselves and as representatives of the several Underwriters named in Schedule A thereto, as the case may be. Purchased Securities to be purchased by Underwriters are herein referred to as "Underwriters' Securities," and any Purchased Securities to be purchased pursuant to Delayed Delivery Contracts (as defined below) as hereinafter provided are herein referred to as "Contract Securities." 2. Delivery and Payment. The Company will deliver the Underwriters' Securities to you for the accounts of the Underwriters at the place specified in the Purchase Agreement, against payment of the purchase price by wire transfer of immediately available funds (as agreed to by the parties and specified in the Purchase Agreement), at the time set forth in this Agreement [or at such other time not later than seven full business days thereafter] as you and the Company determine, such time being herein referred to as the "time of purchase." Unless otherwise provided for in the Purchase Agreement, the Underwriters' Securities so to be delivered will be in definitive fully registered form registered in such authorized denominations and in such names as you request in writing not later than 10:00 A.M.,1 on the third business day prior to the time of purchase, or, if no such request is received, in the names of the respective Underwriters in the amounts agreed to be purchased by them pursuant to this Agreement. For the purpose of expediting the checking of the Underwriters' Securities, the Company agrees to make the Underwriters' Securities available to you (at the place specified in the Purchase Agreement) in definitive form not later than 10:00 A.M. on the first businessday preceding the time of purchase.2 If any Purchase Agreement provides for sales of Purchased Securities pursuant to delayed delivery contracts, the Company authorizes the Underwriters to solicit offers to - -------- (1) Times mentioned herein are New York City Time (2)* As used herein, "business day" shall mean a day on which the New York Stock Exchange is open for trading. 2 3 purchase Contract Securities pursuant to delayed delivery contracts substantially in the form of Schedule I attached hereto (the "Delayed Delivery Contracts") with such changes therein as the Company may approve. Delayed Delivery Contracts are to be with institutional investors, including commercial and savings banks, insurance companies, pension funds, investment companies, and educational and charitable institutions. At the time of purchase the Company will pay you as compensation, for the accounts of the Underwriters, the compensation set forth in such Purchase Agreement in respect of the principal amount of Contract Securities. The Underwriters will not have any responsibility in respect of the validity or the performance of Delayed Delivery Contracts. If the Company executes and delivers Delayed Delivery Contracts, the Contract Securities shall be deducted from the Purchased Securities to be purchased by the several Underwriters and the aggregate principal amount of Purchased Securities to be purchased by each Underwriter shall be reduced pro rata in proportion to the principal amount of Purchased Securities set forth opposite each Underwriter's name in such Purchase Agreement, except to the extent that you determine that such reduction shall be otherwise allocated and so advise the Company. 3. Certain Covenants of the Company. The Company agrees: a) As soon as possible after the execution and delivery of this Agreement to file, or mail for filing, the Prospectus with the Commission pursuant to its Rule 424 under the Act and, if and when required at any time after such execution and delivery, to file amendments to the applications the Company has previously filed with any state regulatory agencies having jurisdiction to govern the Company's issuance of its securities setting forth, among other things, the necessary information with respect to the price and terms of the Purchased Securities and the terms of offering of the Purchased Securities; b) To file no amendment or supplement to the Registration Statement or Prospectus (other than a required filing under the Exchange Act) subsequent to the execution of this Agreement to which you object in writing; c) To furnish such proper information as may be required and otherwise to cooperate in qualifying the Purchased Securities for sale under the laws of such jurisdictions as you may designate and in determining their eligibility for investment under the laws of such jurisdictions; provided that the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; d) To the extent not previously furnished to you, to furnish to you two signed copies of the Registration Statement, as initially filed with the Commission, of all amendments thereto, and of all documents incorporated by reference herein (including all exhibits filed therewith, other than exhibits which have previously been furnished to you), two signed copies of each consent and certificate of independent accountants and of each other person who by his profession gives 3 4 authority to statements made by him and who is named in the Registration Statement as having prepared, certified or reviewed any part thereof, and to furnish to you sufficient unsigned copies of the foregoing (other than exhibits, including consents filed as exhibits, to the Registration Statement) for distribution of a copy to you and to each of the other Underwriters; e) To deliver to the Underwriters without charge in New York City as soon as practicable after the execution and delivery of this Agreement and thereafter from time to time to furnish to the Underwriters, without charge, as many copies of the Prospectus in final form and any documents incorporated by reference therein at or after the date thereof (or as amended or supplemented, if the Company shall have made any amendment or supplement after the effective date of the Registration Statement) as you or the respective Under-writers may reasonably request for the purposes contemplated by the Act; f) To advise you promptly (confirming such advice in writing) of any official request made by the Commission for amendments to the Registration Statement or Prospectus or for additional information with respect thereto, or of official notice of institution of proceedings for, or the entry of, a stop order suspending the effectiveness of the Registration Statement and, if such order should be entered by the Commission, to make every reasonable effort to obtain the lifting or removal thereof as soon as possible, or of the suspension of qualification of the Purchased Securities for offering or sale in any jurisdiction or of the initiation or threatening of any proceeding for any such purpose; g) To apply the net proceeds from the sale of the Purchased Securities in the manner set forth in the Prospectus; h) To furnish to you during a period of five years from the time of purchase (i) as soon as practicable after the end of each fiscal year, a copy of its annual report to shareholders for such year; (ii) from time to time, copies of any reports or other communications which it shall file with the Commission or any governmental agency substituted therefor under the Exchange Act or sent to its public stockholders, or holders of the Purchased Securities, and (iii) such other information as you may from time to time reasonably request regarding the financial condition and operations of the Company; i) To furnish to any other Underwriter copies of such of the financial statements, reports or other information referred to in the foregoing subparagraphs (h)(i) and (ii) as such Underwriter may, from time to time during the period you are entitled to receive them, request; j) To advise the Underwriters of the happening of any event known to the Company within the time during which a prospectus relating to the Purchased Securities is required to be delivered under the Act which, in the judgment of the Company, 4 5 would require the making of any change in the Prospectus or any amended or supplemented Prospectus or in the information incorporated by reference therein so that as thereafter delivered to purchasers such Prospectus will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and on request to prepare and furnish to the underwriters and to dealers and other persons designated by you such amendments or supplements (including appropriate filings under the Exchange Act) to the Prospectus as may be necessary to reflect any such change, provided that the Company shall be so obligated only so long as the Company is notified of unsold allotments (failure by the Underwriters to so notify the Company cancels the Company's obligation under this Section 3(j)); k) As soon as practicable, to make generally available to its security holders an earnings statement (as contemplated by Rule 158 under the Act) covering a period of twelve months after the effective date of the Registration Statement; l) To pay the fees and expenses of counsel for the Underwriters, and to reimburse the Underwriters for their reasonable out-of-pocket expenses incurred in contemplation of the performance of this Agreement, in the event that the Underwriters' Securities are not delivered to and taken up and paid for by the Underwriters hereunder for any reason whatsoever except the failure or refusal of any Underwriter to take up and pay for Underwriters' Securities for some reason not permitted by the terms of this Agreement, the Underwriters agreeing to pay the fees and expenses of counsel for the Underwriters in any other event; m) To pay all expenses, fees and taxes (other than transfer taxes and fees and disbursements of counsel for the Underwriters except as set forth under 3(l) above or (iv) below) in connection with (i) the preparation and filing of the Registration Statement, each Preliminary Prospectus and the Prospectus, any documents incorporated by reference therein at or after the date thereof and any amendments or supplements thereto, and the printing or reproduction and furnishing of copies of each thereof to the Underwriters and to dealers, (ii) the issue, sale and delivery of the Purchased Securities, (iii) the printing or reproduction of this Agreement and the opinions and letters referred to in Section 4(a) hereof, (iv) the qualification of the Purchased Securities for sale and determination of their eligibility for investment under state laws as aforesaid, including the legal fees and all filing fees and disbursements of counsel for the Underwriters and all other filing fees, and the printing or reproduction and furnishing of copies of the "Blue Sky Survey" and the "Legal Investment Survey" to the Underwriters and to dealers, (v) the rating of the Purchased Securities by national rating agencies and (vi) the performance of the Company's other obligations hereunder; n) To furnish to you as early as practicable prior to the time of purchase, but no later than two business days prior thereto, a copy of the latest available unaudited 5 6 interim consolidated financial statements, if any, of the Company which have been read by the Company's independent public accountants as stated in their letters to be furnished pursuant to Section 4(a) of this Agreement; and o) If a public offering of the Purchased Securities is to be made, not to offer or sell any of its other debt securities which are substantially similar to the Purchased Securities prior to ten days after the time of purchase without your consent. 4. Conditions of Underwriters' Obligations. The several obligations of the Underwriters hereunder are subject to the following conditions: a) That, at the time of purchase, you shall receive the signed opinions of counsel for the Company and counsel for the Underwriters, substantially in the forms heretofore furnished to you, addressed to the Underwriters (with reproduced or conformed copies thereof for each of the other Underwriters); and that, at the time of purchase, you shall receive the signed letters of the independent public accountants of the Company, substantially in the form heretofore furnished to you and in substance satisfactory to you addressed to the Underwriters (with reproduced or conformed copies thereof for each of the other Underwriters); b) That, at or before 5:30 P.M. on the date hereof, or at such later time and day as you may have from time to time consented to in writing or by telephone, confirmed in writing, such orders of state authorities which are necessary to permit the issue, sale and delivery of the Purchased Securities, if any, shall have been issued; at the time of purchase such orders shall be in full force and effect; and prior to such time of purchase no stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Act by the Commission and at such time of purchase no proceedings therefor shall be pending or threatened; c) That, at the time the Registration Statement became effective, the Registration Statement did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that at the time of purchase the Prospectus shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, other than any statement contained in, or any matter omitted from, the Registration Statement or the Prospectus in reliance upon, and in conformity with, information furnished in writing by or on behalf of any Underwriter through you to the Company expressly for use with reference to such Underwriter in the Registration Statement or Prospectus; d) That, subsequent to the respective dates as of which information is given in the Registration Statement and in the Prospectus, at the time the Prospectus is first 6 7 filed, or mailed for filing, pursuant to Rule 424 under the Act, and prior to the time of purchase, in your opinion no material adverse change, or any development involving a prospective material adverse change, in the condition of the Company, financial or otherwise, shall have taken place (other than as referred to in or contemplated by the Registration Statement and Prospectus as of such time); e) That the Company shall have performed all of its obligations under this Agreement which are to be performed by the terms hereof at or before the time of purchase; f) That, since the date of this Agreement, there shall not have occurred any downgrading, nor shall any notice have 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 (other than as referred to in or contemplated by the Registration Statement and the Prospectus as of such time); g) That the Company shall, at the time of purchase, deliver to you (with reproduced or conformed copies thereof for each of the other Underwriters) a signed certificate of two of its executive officers stating that, subsequent to the respective dates as of which information is given in the Registration Statement and in the Prospectus, at the time the Prospectus is first filed, or mailed for filing, pursuant to Rule 424 under the Act, and prior to the time of purchase, no material adverse change, or any development involving a prospective material adverse change, in the condition of the Company, financial or otherwise, shall have taken place (other than as referred to in or contemplated by the Registration Statement and Prospectus as of such time) and also covering the matters set forth in (c) and (e) of this Section 4; and h) That the Company shall have accepted Delayed Delivery Contracts in any case where sales of Contract Securities arranged by the Underwriters have been approved by the Company. 5. Termination of Agreement. The obligations of the several Underwriters hereunder shall be subject to termination in your absolute discretion, if, at any time prior to the time of purchase, trading in securities on the New York Stock Exchange shall have been suspended (other than a temporary suspension to provide for an orderly market) or minimum prices shall have been established on the New York Stock Exchange, or if a banking moratorium shall have been declared either by the United States or New York State authorities, or if after the execution of this Agreement the United States shall have declared war in accordance with its constitutional processes or there shall have occurred any material outbreak or escalation of hostilities or other national or international calamity or crisis of such magnitude in its effect on the financial markets 7 8 of the United States as, in your judgment, to make it impracticable to market the Purchased Securities. If you elect to terminate this Agreement as provided in this Section 5, the Company and each other Underwriter shall be notified promptly in writing or by telephone, confirmed in writing. If the sale to the Underwriters of the Underwriters' Securities, as herein contemplated, is not carried out by the Underwriters for any reason permitted hereunder or if such sale is not carried out because the Company shall be unable to comply with any of the terms thereof, the Company shall not be under any obligation or liability under this Agreement (except to the extent provided in Sections 3(l), 3(m), 7(b) and 9 hereof), and the Underwriters shall be under no obligation or liability to the Company (except to the extent provided in Sections 8(b) and 9 hereof) or to one another under this Agreement. 6. Increase in Underwriters' Commitments: If any Underwriter shall default in its obligation to take up and pay for the Purchased Securities to be purchased by it hereunder and if the principal amount of the Purchased Securities which all Underwriters so defaulting shall have so failed to take up and pay for does not exceed 10% of the total principal amount of the Purchased Securities, the non-defaulting Underwriters shall take up and pay for (in addition to the principal amount of the Purchased Securities they are obligated to purchase pursuant to this Agreement) the principal amount of the Purchased Securities agreed to be purchased by all such defaulting Underwriters, as herein provided. Such Purchased Securities shall be taken up and paid for by such non-defaulting Underwriter or Underwriters in such amount or amounts as you may designate with the consent of each Underwriter so designated or, in the event no such designation is made, such Purchased Securities shall be taken up and paid for by all non-defaulting Underwriters pro rata in proportion to the principal amount of the Purchased Securities set opposite the names of all such non-defaulting Underwriters in Schedule A to the Purchase Agreement. Without relieving any defaulting Underwriter of its obligations hereunder, the Company agrees with the non-defaulting Underwriters that it will not sell any Purchased Securities hereunder unless all of the Underwriters' Securities are purchased by the Underwriters (or by substituted Underwriters selected by you with the approval of the Company or selected by the Company with your approval). If a new underwriter or underwriters are substituted by the Underwriters or by the Company for a defaulting Underwriter or Underwriters in accordance with the foregoing provision, the Company or you will have the right to postpone the time of purchase for a period of not exceeding five business days in order that necessary changes in the Registration Statement and Prospectus and other documents may be effected. 8 9 The term Underwriter as used in this Agreement will refer to and include any underwriter substituted under this Section 6 with like effect as if such substituted underwriter had originally been named in Schedule A to the Purchase Agreement. 7. Warranties and Representations of and Indemnity by the Company. a) The Company warrants and represents that, when the Registration Statement became effective, the Registration Statement complied in all material respects, and, when the Prospectus is first filed, or mailed for filing, pursuant to Rule 424 under the Act, the Prospectus will comply in all material respects with the provisions of the Act, and that neither will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Company makes no warranty or representation with respect to any statement contained in, or any matter omitted from, the Registration Statement or the Prospectus in reliance upon and in conformity with information furnished in writing by or on behalf of any Underwriter through you to the Company expressly for use with reference to the Underwriter in the Registration Statement or Prospectus. The Company also warrants and represents that the documents incorporated by reference in the Prospectus comply in all material respects with the requirements of the Exchange Act and any additional documents deemed to be incorporated by reference in the Prospectus will, when they are filed with the Commission, comply in all material respects with the requirements of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading. b) The Company agrees to indemnify and hold harmless each Underwriter, and any person who controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and against any loss, expense, liability or claim (including the reasonable fees and expenses of counsel and other reasonable expenses in connection with investigating, defending or settling any such claim) which arises out of or is based upon any alleged untrue statement of a material fact in the Registration Statement, any prospectus contained in the Registration Statement at the time it became effective or the Prospectus, or any related preliminary prospectus, or arises out of or is based upon any alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein not misleading. The foregoing shall not cover any such loss, expense, liability or claim, however, which arises out of or is based upon any alleged untrue statement of a material fact contained in, and in conformity with information furnished in writing by or on behalf of such Underwriter through you to the Company expressly for use with reference to the Underwriter in, any such documents or arises out of or is based upon any alleged omission to state a 9 10 material fact in connection with such information required to be stated in any such documents or necessary to make such information not misleading. If any action is brought against an Underwriter or controlling person in respect of which indemnity may be sought against the Company pursuant to the foregoing paragraph, such Underwriter shall promptly notify the Company in writing or by telephone, confirmed in writing, of the institution of such action and the Company shall assume the defense of such action, including the employment of counsel and payment of expenses. Such Underwriter or controlling person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless the employment of such counsel shall have been authorized in writing by the Company in connection with the defense of such action or the Company shall not have employed counsel to have charge of the defense of such action or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses of one counsel (in addition to local counsel) for all indemnified parties selected by you shall be borne by the Company. Anything in this paragraph to the contrary notwithstanding, the Company shall not be liable for any settlement of any such claim or action effected without its written consent. The Company's indemnity agreement contained in this Section 7(b) and its warranties and representations contained in this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of any Underwriter or controlling person, and shall survive any termination of this Agreement or the issuance and delivery of the Purchased Securities. The Company agrees promptly to notify the Underwriters of the commencement of any litigation or proceedings against the Company or any of its officers or directors in connection with the issue and sale of the Purchased Securities or with such Registration Statement or Prospectus. 8. Warranties and Representations of and Indemnity by Underwriters. a) Each Underwriter warrants and represents that the information furnished in writing by or on behalf of such Underwriter through you to the Company expressly for use with reference to such Underwriter in the Registration Statement at the time it became effective or the Prospectus, or any related preliminary prospectus does not contain an untrue statement of a material fact and does not omit to state a material fact in connection with such information required to be stated in the Registration Statement at the time it became effective or the Prospectus, or any related preliminary prospectus or necessary to make such information not misleading. Each Underwriter, in addition to other information furnished by such Underwriter or on its behalf through you to the Company in writing expressly for use with reference to such Underwriter in the Registration Statement and Prospectus, hereby furnishes to the Company in writing expressly for use with reference to such Underwriter the statements with respect to the terms 10 11 of offering of the Purchased Securities by the Underwriters set forth on the cover page of the Prospectus Supplement and under "Underwriting" therein. b) Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors and its officers from and against any loss, expense, liability or claim (including the reasonable fees and expenses of counsel and other reasonable expenses in connection with investigating, defending or settling any such claim) which arises out of or is based upon any alleged untrue statement of a material fact contained in, and in conformity with information furnished in writing by or on behalf of such Underwriter through you to the Company expressly for use with reference to such Underwriter in, the Registration Statement, any prospectus contained in the Registration Statement at the time it became effective or the Prospectus, or any related preliminary prospectus, or arises out of or is based upon any alleged omission to state a material fact in connection with such information required to be stated in such documents or necessary to make such information not misleading. If any action is brought against the Company or any such person in respect of which indemnity may be sought against any Underwriter pursuant to the foregoing paragraph, the Company or such person shall promptly notify such Underwriter in writing or by telephone, confirmed in writing, of the institution of such action and such Underwriter shall assume the defense of such action, including the employment of counsel and payment of expenses. The Company or such person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Company or such person unless the employment of such counsel shall have been authorized in writing by such Underwriter in connection with the defense of such action or such Underwriter shall not have employed counsel to have charge of the defense of such action or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to such Underwriter (in which case such Underwriter shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses for all indemnified parties of one counsel (in addition to local counsel) selected by the Company shall be borne by such Underwriter. Anything in this paragraph to the contrary notwithstanding, no Underwriter shall be liable for any settlement of any such claim or action effected without the written consent of such Underwriter. The indemnity agreement on the part of each Underwriter contained in this Section 8(b) shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or such person, and shall survive any termination of this Agreement or the issuance and delivery of the Purchased Securities. Each Underwriter agrees promptly to notify the Company of the commencement of any litigation or proceedings against such Underwriter in connection with the issue and sale of the Purchased Securities or with such Registration Statement or Prospectus. 9. Contribution. If the indemnification provided for in Sections 7(b) or 8(b) above is unavailable in respect of any losses, expenses, liabilities or claims referred to therein, 11 12 then the parties entitled to indemnification by the terms thereof shall be entitled to contribution to liabilities and expenses except to the extent that contribution is not permitted under the Act or the Exchange Act. In determining the amount of contribution to which the respective parties are entitled, there shall be considered the relative benefits received by each party from the offering of the Purchased Securities (taking into account the portion of the proceeds of the offering realized by each), the parties' relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and any other equitable considerations appropriate under the circumstances. The Company and the Underwriters and such controlling persons agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Underwriters and such controlling persons were treated as one entity for such purpose). Notwithstanding the provisions of this Section 9, no indemnifying Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by such Underwriter and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter otherwise has been required to pay by reason of such untrue statement or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The contribution agreement contained in this Section 9 shall remain in full force and effect regardless of any investigation made by or on behalf of any Underwriter or the Company or any of its officers or directors or any controlling person and shall survive any termination of this Agreement or the issuance and delivery of the Purchased Securities. 10. Notices. All statements, requests, notices and agreements shall be in writing or by telegram and, if to the Underwriters, shall be sufficient in all respects if delivered or sent by registered mail to the address furnished in writing for the purpose of such statements, requests, notices and agreements hereunder, and, if to the Company shall be sufficient in all respects if delivered or sent by registered mail to the Company at [Name of Issuer/Address], Attention: . 11. Construction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this agreement. 12. Parties in Interest. The Agreement herein set forth has been and is made solely for the benefit of the Underwriters and the Company, and the controlling persons, directors and officers referred to in Sections 7, 8 and 9 hereof, and their respective successors, assigns, executors and administrators, and no other person shall acquire or have any right under or by virtue of this Agreement. Nothing in this Agreement is intended or 12 13 shall be construed to give to any other person, firm or corporation (including, without limitation, any purchaser of the Purchased Securities from an Underwriter or any subsequent holder thereof or any purchaser of any Contract Securities or any subsequent holder thereof) any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. The term "successor" as used in this Agreement shall not include any purchaser, as such purchaser, of any Purchased Securities from any Underwriter or any subsequent holder thereof or any purchaser, as such purchaser, of any Contract Securities or any subsequent holder thereof. 13. Counterparts. This Agreement may be executed in any number of counterparts which, taken together, shall constitute one and the same instrument. 13 14 Schedule I DELAYED DELIVERY CONTRACT Dated: _______________, 199 [NAME OF ISSUER] [ADDRESS] Attention: Dear Sirs: The undersigned hereby agrees to purchase from [Name of Issuer] (the "Company"), and the Company agrees to sell to the undersigned, $___________________ principal amount of the Company's [state title of issue] (the "Securities") offered by the Company's Prospectus dated ___________, 199__ and a Prospectus Supplement dated ___________, 199__, receipt of copies of which is hereby acknowledged, at a purchase price of ____% of the principal amount thereof plus accrued interest and on the further terms and conditions set forth in this contract. The undersigned agrees to purchase such Securities in the principal amounts and on the delivery dates (the "Delivery" "Dates") set forth below: Delivery Principal Plus Accrued Date Amount Interest From: -------- --------- -------------- - ---------------- $--------------- ---------------- - ---------------- $--------------- ---------------- - ---------------- $--------------- ---------------- Payment for the Securities which the undersigned has agreed to purchase on each Delivery Date shall be made to the Company by wire transfer of immediately available at Corporate Trust Office of ___________________ (or at such other place as the undersigned and the Company shall agree) at 11:00 A.M., New York City Time, on such Delivery Date upon issuance and delivery to the undersigned of the Securities to be purchased by the 14 15 undersigned on such Delivery Date in such authorized denominations and, unless otherwise provided herein, registered in such names as the undersigned may designate by written or telegraphic communications addressed to the Company not less than five full business days prior to such Delivery Date. The obligation of the Company to sell and deliver, and of the undersigned to take delivery of and make payment for, Securities on each Delivery Date shall be subject to the conditions that (1) the purchase of Securities to be made by the undersigned shall not at the time of delivery be prohibited under the laws of the jurisdiction to which the undersigned is subject, (2) the sale of the Securities by the Company pursuant to this contract shall not at the time of delivery be prohibited under the laws of any jurisdiction to which the Company is subject and (3) the Company shall have sold, and delivery shall have taken place, to the Underwriters of such principal amount of the Securities as is to be sold and delivered to them. In the event that Securities are not sold to the undersigned because one of the foregoing conditions is not met, the Company shall not be liable to the undersigned for damages arising out of the transactions covered by this contract. Promptly after completion of the sale and delivery to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by copies of the opinions of counsel for the Company delivered to the Underwriters. Failure to take delivery of and make payment for Bonds by any purchaser under any other Delayed Delivery Contract shall not relieve the undersigned of its obligations under this contract. The undersigned represents and warrants that (a) as of the date of this contract, the undersigned is not prohibited under the laws of the jurisdictions to which the undersigned is subject from purchasing the Securities hereby agreed to be purchased and (b) the undersigned does not contemplate selling the Securities which it has agreed to purchase hereunder prior to the Delivery Date therefor. This contract will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. This contract shall be governed by and construed in accordance with the laws of the State of New York. This contract may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 15 16 It is understood that the acceptance of any Delayed Delivery Contract is in the Company's sole discretion and, without limiting the foregoing, need not be on a first-come, first-served basis. If the contract is acceptable to the Company, it is requested that the Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding contract between the Company and the undersigned when such counterpart is so signed. Yours very truly, ____________________________________ By ____________________________________ ____________________________________ ____________________________________ Address Accepted, as of the date first above written [Name of Issuer] By_________________________________ PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING The name and telephone and department of the representative of the Purchaser with whom details of delivery on the Delivery Date may be discussed are as follows: (Please print.) Telephone No. Name (Including Area Code) Department [NAME OF ISSUER] PURCHASE AGREEMENT DEBT SECURITIES _______________, 1996 16 17 [Name of Issuer] [ADDRESS] Dear Sirs: Referring to the Debt Securities, ______% Series due (the "Securities"), of [Name of Issuer] (the "Company") covered by registration statement on Form S-3 (No. 333- ), such registration statement including (i) the prospectus included therein, dated , 1996, as supplemented by a prospectus supplement dated ______________, 19 in the form first filed under Rule 424 and any additional prospectus supplements relating to the Securities filed under Rule 424 (such prospectus as so supplemented, including each document incorporated by reference therein is hereinafter called the "Prospectus") and (ii) all documents filed as part thereof or incorporated by reference therein, is hereinafter called the "Registration Statement" on the basis of the representations, warranties and agreements contained in this Agreement, but subject to the terms and conditions herein set forth, the purchaser or purchasers named in Schedule A hereto (the "Underwriters") severally agree to purchase and the Company agrees to sell to each Underwriter the principal amount of the Company's Securities having the terms described below (the "Purchased Securities") set forth opposite the name of each Underwriter on Schedule A hereto. The price at which the Purchased Securities shall be purchased from the Company by the Underwriters shall be ______%. The initial public offering price shall be ______%. The Purchased Securities will be offered by the Underwriters as set forth in the Prospectus relating to such Purchased Securities. The Purchased Securities will have the following terms: Title of Securities: ____________________________ Interest rate: ____________________________ Interest Payment Dates: ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ Maturity: ____________________________ Redemption Provisions: ____________________________ ____________________________ ____________________________ 17 18 Other: ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ Payment for the Purchased Securities shall be made in the following funds: ____________________________ The time of purchase shall be: ____________________________ The place(s) at which the Purchased Securities shall be delivered and sold shall be: ____________________________ Delayed Delivery Contracts: ______________________________ Notices to the Underwriters shall be sent to the following address or telecopier number: If we are acting as Representative(s) for the several Underwriters named in Schedule A hereto, we represent that we are authorized to act for such several Underwriters in connection with the transactions contemplated in this Agreement, and that, if there are more than one of us, any action under this Agreement taken by any of us will be binding upon all the Underwriters. All of the provisions contained in the document entitled "[Name of Issuer] Standard Purchase Provisions - Debt Securities," a copy of which has been previously furnished to us, are hereby incorporated by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein. If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon it will become a binding agreement between the Company and each Underwriter in accordance with its terms. Very truly yours, 18 19 [Firm Name] By ________________________________ Title: [Firm Name] By ________________________________ Title: Acting on behalf of and as Representative(s) of the several Underwriters named in Schedule A hereto.* The foregoing Purchase Agreement is hereby confirmed as of the date first above written. [NAME OF ISSUER] By ___________________________ Title: - ------------------ * To be deleted if the Purchase Agreement is not executed by one or more Underwriters acting as Representative(s) of the Underwriters for purposes of this Agreement. 19 EX-99.B3 8 FORM OF STANDARD CONECTIV MASTER DISTR. AGREE. 1 EXHIBIT B-3 CONECTIV $----------- Medium-Term Notes, Series __ DISTRIBUTION AGREEMENT [insert date] [insert names and addresses of agents] Ladies and Gentlemen: Conectiv, a Delaware corporation (the "Company"), proposes to issue and sell from time to time its Medium Term Notes, Series __ (the "Securities"), in an aggregate amount up to [insert aggregate principal amount] and agrees with each of you (individually, an "Agent", and collectively, the "Agents") as set forth in this Agreement. Subject to the terms and conditions stated herein and to the reservation by the Company of the right to sell Securities directly on its own behalf, the Company hereby (i) appoints each Agent as an agent of the Company for the purpose of soliciting and receiving offers to purchase Securities from the Company pursuant to Section 2(a) hereof and (ii) agrees that, except as otherwise contemplated herein, whenever it determines to sell Securities directly to any Agent, as principal, it will enter into a separate agreement (each a "Terms Agreement") in accordance with Section 2(b) hereof. The Securities will be issued under an Indenture, dated as of [insert date], as it may be supplemented and amended (the "Indenture"), between the Company and [insert name of trustee], as Trustee (the "Trustee"). The Securities shall have the maturity ranges, interest rates, redemption provisions and other terms set forth in the Prospectus referred to below as it may be amended or supplemented from time to time. The Securities will be issued, and the terms and rights thereof established, from time to time by the Company in accordance with the Indenture. 1. Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, each Agent that: (a) A registration statement (No. ), together with amendments thereto, if any, with respect to the Securities has been prepared by the Company and filed with the Securities 2 -2- and Exchange Commission (the "Commission") in conformity with the rules, regulations and releases of the Commission (the "Rules and Regulations") under the Securities Act of 1933, as amended (the "Act"). Such registration statement has been declared effective by the Commission and the Indenture has been qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Copies of such registration statement, together with all amendments thereto, if any, have heretofore been delivered to each Agent, and copies of any amendments thereto, including the exhibits filed therewith, which shall be filed subsequent to the date hereof also will be delivered to each Agent. Such registration statement, including all exhibits thereto but excluding the Statement of Eligibility of the Trustee, as amended at the time it became effective, is hereinafter called the "Registration Statement" (any preliminary prospectus included in such registration statement being hereinafter called a "Preliminary Prospectus"); the prospectus (including, if applicable, any prospectus supplement) relating to the Securities, in the form in which it most recently has been filed with the Commission on or prior to the date of this Agreement is hereinafter called the "Prospectus"; any reference herein to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents filed by the Company under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and incorporated by reference therein (the "Incorporated Documents") as of the date of such Registration Statement, Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus, including any supplement to the Prospectus that sets forth only the terms of a particular issue of the Securities (a "Pricing Supplement"), shall be deemed to refer to and include the Incorporated Documents as of the date of such amendment or supplement; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to and include the Prospectus as then amended or supplemented (including the applicable Pricing Supplement) in relation to a particular issue of Securities, in the form filed with the Commission pursuant to Rule 424(b) under the Act, including any Incorporated Documents as of the date of such filing. (b) No stop order suspending the effectiveness of the Registration Statement nor any order preventing or suspending use of the Prospectus nor any order directed to the adequacy or accuracy of any Incorporated Document has been issued by the Commission, and no proceeding for any such purpose has been initiated or is pending or, to the knowledge of the Company, is contemplated by the Commission. (c) On the date hereof and at and as of any Solicitation Time (as defined in Section 6) and any Time of Delivery (as defined in Section 2), (i) the Registration Statement and the Prospectus contain, and any amendment or supplement thereto will contain, all statements and information which are required to be included therein by the Act and the Rules and Regulations and the Registration Statement and the Prospectus conform, and any amendment of supplement thereto will conform, in all material respects, to the requirements of the Act and the Rules and Regulations; (ii) the Indenture conforms, and any amendment or supplement thereto will conform, in all material respects, to the 3 -3- requirements of the Trust Indenture Act; (iii) the Registration Statement does not, and any amendment thereto will not, include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and (iv) the Prospectus does not, and any amendment or supplement thereto will not, include 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 this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by any Agent expressly for use in the Prospectus as amended or supplemented to relate to a particular issuance of Securities or to any statement in or omissions from the Statement of Eligibility of the Trustee under the Indenture. There are no contracts or documents of the Company or of any Subsidiary (as defined below) which are required to be filed as exhibits to the Registration Statement by the Act or by the Rules and Regulations which have not been filed as required. (d) The Company has filed timely all reports and all definitive proxy and information statements required to be filed by the Company with the Commission pursuant to the Exchange Act and the rules and regulations of the Commission thereunder. Each of the Incorporated Documents, when it and when any amendment thereto was filed with the Commission, complied as to form in all material respects to the requirements of the Exchange Act, and the rules and regulations of the Commission thereunder, and any Incorporated Document and any amendment thereto, when filed with the Commission, will comply as to form in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission thereunder; and none of such documents includes or will include any untrue statement of a material fact or omits or will omit to state any 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. (e) The Company has been duly organized and is validly existing as a corporation in good standing under the laws of Delaware, with all corporate power and other authority, including franchises, necessary to own or lease its properties and conduct its business as described in the Registration Statement and the Prospectus and to issue and sell the Securities. The Company is not qualified to do business as a foreign corporation or in any other jurisdiction and the conduct of its business or its ownership or leasing of properties requires no such qualification. (f) The issue and sale of the Securities, the compliance by the Company with all of the provisions of the Securities, the Indenture, this Agreement, the Administrative Procedure (as defined in Section 2 hereof) and any Terms Agreement, and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, the Indenture or any indenture, mortgage, deed of trust, loan agreement or other agreement or 4 -4- instrument to which the Company is a party or by which it is bound or to which any of its property or assets is subject, or the Company's Articles of Incorporation or the By-Laws, or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its property. (g) The Company has full power and lawful authority to authorize, issue and sell the Securities on the terms and conditions herein set forth; has taken all corporate action necessary therefor; and has obtained every consent, approval, authorization and other order of any regulatory body which is required for such authorization, issue or sale, except as may be required under state securities laws; and such consents, approvals, authorizations and other orders are in full force and effect and are not subject to appeal. (h) The Company is not an "investment company" or an entity "controlled" by an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended. (i) Immediately after any sale of Securities by the Company hereunder or under any Terms Agreement, the aggregate amount of Securities which shall have been issued and sold by the Company hereunder or under any Terms Agreement will not exceed the amount of Securities registered under the Act. (j) This Agreement has been, and any Terms Agreement will have been, duly authorized and entered into by the Company. 2. Obligations of the Agents and the Company. (a) On the basis of the representations and warranties and subject to the terms and conditions herein set forth, each of the Agents hereby severally and not jointly agrees, as agent of the Company, to use its best efforts to solicit and receive offers to purchase the Securities from the Company upon the terms and conditions set forth in the Prospectus as amended or supplemented from time to time. So long as this Agreement shall remain in effect with respect to any Agent, the Company shall not, without the consent of such Agent, solicit or accept offers to purchase, or sell, any debt securities with a maturity at the time of original issuance of 9 months to 40 years except pursuant to this Agreement, any Terms Agreement or a private placement not constituting a public offering under the Act, or except in connection with a firm commitment underwriting pursuant to an underwriting agreement that does not provide for a continuous offering of medium-term debt securities. However, the Company reserves the right to sell, and may solicit and accept offers to purchase, Securities directly on its own behalf, and, in the case of any such sale not resulting from a solicitation made by any Agent, no commission will be payable with respect to such sale. These provisions shall not limit Section 4(f) hereof or any similar provision included in any Terms Agreement. 5 -5- Procedural details relating to the issue and delivery of Securities, the solicitation of offers to purchase Securities and the payment therefor shall be as set forth in the Administrative Procedure attached hereto as Annex II as it may be amended from time to time by written agreement between the Agents and the Company (the "Administrative Procedure"). The provisions of the Administrative Procedure shall apply to all transactions contemplated hereunder other than those made pursuant to a written Terms Agreement. Each Agent and the Company agree to perform the respective duties and obligations specifically provided to be performed by each of them in the Administrative Procedure. The Company will furnish to the Trustee a copy of the Administrative Procedure as from time to time in effect. 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 Securities. As soon as practicable, but in any event not later than one business day, after receipt of notice from the Company, the Agents will suspend solicitation of offers to purchase Securities from the Company until such time as the Company has advised the Agents that such solicitation may be resumed. The Company agrees to pay each Agent a commission, at the time of settlement of any sale of a Security by the Company as a result of a solicitation made by such Agent, in an amount equal to the following applicable percentage of the principal amount of such Security sold (except that the Company and such Agent may agree in writing to a higher commission for maturities in excess of 30 years):
COMMISSION (PERCENTAGE OF AGGREGATE PRINCIPAL AMOUNT) RANGE OF MATURITIES OF SECURITIES SOLD From 9 months to less than 1 year.............................. From 1 year to less than 18 months............................. From 18 months to less than 2 years............................ From 2 years to less than 3 years.............................. From 3 years to less than 4 years.............................. From 4 years to less than 5 years.............................. From 5 years to less than 6 years.............................. From 6 years to less than 7 years.............................. From 7 years to less than 10 years............................. From 10 years to less than 15 years............................ From 15 years to less than 20 years............................ 20 years and more..............................................
(b) Each sale of Securities to any Agent as principal shall be made in accordance with the terms of this Agreement and a Terms Agreement which will provide for the sale of such 6 -6- Securities to, and the purchase thereof by, such Agent. A Terms Agreement may be either (i) a written agreement between one or more of the Agents and the Company, which may be substantially in the form of Annex I hereto, or (ii) an oral agreement between any Agent and the Company confirmed in writing by such Agent. Each Terms Agreement shall contain the information specified in the Administrative Procedure under the caption, "Communication of Sale Information to Company by Agent", and may specify certain terms of the reoffering of the Securities. The commitment of any Agent to purchase Securities as principal 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 specify the time and date and place of delivery of and payment for such Securities. Unless otherwise specified in a Terms Agreement, the procedural details relating to the issue and delivery of such Securities and payment therefor shall be as set forth in the Administrative Procedure. Each time and date of delivery of and payment for Securities to be purchased by an Agent as principal, whether set forth in a Terms Agreement or in accordance with the Administrative Procedure, is referred to herein as a "Time of Delivery". Unless otherwise specified in a Terms Agreement, an Agent purchasing Securities as principal may resell such Securities to dealers. Any such sales may be at a discount, which shall not exceed the amount set forth in the Pricing Supplement relating to such Securities. 3. Commencement. The documents required to be delivered pursuant to Section 6 hereof on the Commencement Date (as defined below) shall be delivered to the Agents at the offices [insert place of closing] at or before 12:00 noon, New York City time, on the date of this Agreement, which date and time of such delivery may be postponed by agreement between the Agents and the Company but in no event shall be later than the day prior to the date on which solicitation of offers to purchase Securities is commenced or on which any Terms Agreement is executed (such time and date being referred to herein as the "Commencement Date"). 7 -7- 4. Covenants of the Company. The Company covenants and agrees with each Agent: (a) (i) To make no amendment or supplement to the Registration Statement or the Prospectus (A) prior to the Commencement Date, to which any Agent shall reasonably object after reasonable notice thereof or (B) after the date of any Terms Agreement by an Agent to purchase Securities as principal and prior to the related Time of Delivery, to which any Agent party to such Terms Agreement or so purchasing as principal shall reasonably object after reasonable notice thereof; (ii) to prepare, with respect to each particular issue of Securities to be sold through or to such Agent pursuant to this Agreement, a Pricing Supplement with respect to such Securities in a form previously approved by such Agent and to file such Pricing Supplement pursuant to Rule 424(b) under the Act; (iii) to make no amendment or supplement to the Registration Statement or Prospectus, other than any Pricing Supplement, at any time prior to having afforded each Agent a reasonable opportunity to review and comment on it; (iv) to file timely all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the offering or sale of the Securities, and during such same period to advise such Agent, promptly after the Company receives notice thereof, of the time when any amendment to the Registration Statement has been filed or has become effective or any supplement to the Prospectus or any amended Prospectus (other than any Pricing Supplement that relates to Securities not purchased through or by such Agent) has been filed with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Securities, of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amendment or supplement of the Registration Statement or Prospectus or for additional information; and (v) in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any such prospectus or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal; (b) Promptly, from time to time, to take such action as such Agent reasonably may request to qualify the Securities for offering and sale under the securities laws of such jurisdictions as such Agent may request and to comply with such laws so as to permit the continuance of sales and dealings therein for as long as may be necessary to complete the distribution or sale of the Securities; provided, however, that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction or to submit to any requirements which it deems unduly burdensome; (c) To furnish such Agent with copies of the Registration Statement and each amendment thereto, and with copies of the Prospectus as amended or supplemented, other than any 8 -8- Pricing Supplement (except as provided in the Administrative Procedure), in the form in which it is filed with the Commission pursuant to Rule 424(b) under the Act, both in such quantities as such Agent may reasonably request from time to time; and, if the delivery of a prospectus is required at any time in connection with the offering or sale of the Securities (including Securities purchased from the Company by such Agent as principal) and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to notify such Agent and request such Agent, in its capacity as agent of the Company, to suspend solicitation of offers to purchase Securities from the Company (and, if so notified, such Agent shall cease such solicitations as soon as practicable, but in any event not later than one business day later); and if the Company shall decide to amend or supplement the Registration Statement or the Prospectus as then amended or supplemented, to so advise such Agent promptly by telephone (with confirmation in writing) and to prepare and cause to be filed promptly with the Commission an amendment or supplement to the Registration Statement or the Prospectus as then amended or supplemented that will correct such statement or omission or effect such compliance; provided, however, that if during such same period such Agent continues to own Securities purchased from the Company by such Agent as principal or such Agent is otherwise required to deliver a prospectus in respect of transactions in the Securities, the Company shall promptly prepare and file with the Commission such an amendment or supplement; (d) To make generally available to its security holders as soon as practicable, but in any event not later than eighteen months after (i) the effective date of the Registration Statement, (ii) the effective date of each post-effective amendment to the Registration Statement, and (iii) the date of each filing by the Company with the Commission of an Annual Report on Form 10-K that is incorporated by reference in the Registration Statement, an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158); (e) For a period of five years from the date any Securities are sold by the Company pursuant to an offer solicited by such Agent under this Agreement, to deliver to such Agent (i) as soon as available, a copy of each report of the Company mailed to security holders or filed with the Commission and (ii) from time to time such other information concerning the Company as such Agent shall reasonably request. If at any time, the Company shall have a majority-owned subsidiary or subsidiaries which is or are "significant" within the meaning of Regulation S-X of the Commission, the financial statements contained in the documents referred to in (i) shall be furnished in consolidated form, if such consolidation 9 -9- is required under such Regulation S-X, for the Company and such subsidiary or subsidiaries; (f) That, between the date of any Terms Agreement with an Agent and the related Time of Delivery, the Company will not, without the prior written consent of such Agent, offer, sell, contract to sell or otherwise dispose of any debt securities of the Company substantially similar to the Securities (other than (i) Securities that are to be sold pursuant to such Terms Agreement, (ii) Securities previously agreed to be sold by the Company and (iii) commercial paper issued in the ordinary course of business), except as may otherwise be provided in such Terms Agreement; (g) That each acceptance by the Company of an offer to purchase Securities hereunder (including any purchase by such Agent as principal pursuant to a Terms Agreement) shall be deemed to be an affirmation to such Agent that the representations and warranties of the Company contained in or made pursuant to this Agreement are true and correct as of the date of such acceptance as though made at and as of such date, and an undertaking that such representations and warranties will be true and correct as of the settlement date for the Securities relating to such acceptance or as of the Time of Delivery relating to such purchase pursuant to a Terms Agreement, as the case may be, as though made at and as of such date (except that such representations and warranties shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented relating to such Securities); 5. Payment of Expenses. The Company covenants and agrees with each Agent that the Company will pay or cause to be paid the following: (i) the fees and expenses of the Company's counsel and accountants in connection with the registration of the Securities under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus, the Prospectus and any Pricing Supplement and all other amendments and supplements thereto and the mailing and delivering of copies thereof to such Agent; (ii) the fees and expenses of counsel for the Agents in connection with the establishment of the program contemplated hereby, any opinions to be rendered by such counsel hereunder and the continuing advice and services of such counsel in connection with the transactions contemplated hereunder; (iii) the cost of printing, preparing by word processor or reproducing this Agreement, any Terms Agreement, any Indenture, any Blue Sky and Legal Investment Memoranda and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iv) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 4(b) hereof, including fees and disbursements of counsel for the Agents in connection with such qualification and in connection with the Blue Sky and legal investment surveys; (v) any fees charged by securities rating services for rating the Securities; (vi) any filing fees incident to any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Securities; (vii) the cost of preparing the Securities; (viii) the fees and expenses of any Trustee and any agent of any Trustee and any 10 -10- transfer or paying agent of the Company and the fees and disbursements of counsel for any Trustee or such agent in connection with any Indenture and the Securities; (ix) the out-of-pocket expenses of the Agents incurred in connection with the implementation of the program for the offer and sale of the Securities; and (x) all other costs and expenses incident to the performance of the Company's obligations hereunder which are not otherwise specifically provided for in this Section. Except as provided in Sections 7 and 8 hereof, each Agent shall pay all other expenses it incurs. 6. Conditions of Agents' Obligations. The obligation of any Agent, as agent of the Company, at any time ("Solicitation Time") to solicit offers to purchase the Securities and the obligation of any offeree to purchase Securities or of any Agent to purchase Securities as principal, pursuant to any Terms Agreement, shall in each case be subject, in such offeree's or Agent's discretion, to the condition that all representations and warranties and other statements of the Company herein (and, in the case of an obligation of an Agent under a Terms Agreement, contained in or incorporated in such Terms Agreement by reference) are true and correct at and as of the Commencement Date and any applicable date that is on or prior to such Solicitation Time or Time of Delivery, as the case may be, and at and as of such Solicitation Time or Time of Delivery, as the case may be, the condition that on or prior to such Solicitation Time or Time of Delivery, as the case may be, the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions: (a) (i) With respect to any Securities sold at or prior to such Solicitation Time or Time of Delivery, as the case may be, the Prospectus as amended or supplemented (including the Pricing Supplement) with respect to such Securities shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 4(a) hereof; (ii) no stop order suspending the effectiveness of the Registration Statement shall have been issued and shall remain in effect and no proceeding for that purpose shall have been initiated or threatened by the Commission; and (iii) all requests for additional information on the part of the Commission shall have been complied with to the reasonable satisfaction of such Agent; (b) Counsel to the Agents shall have furnished to such Agent (i) such opinion or opinions, dated the Commencement Date, with respect to the incorporation of the Company, the validity of the Indenture, the Securities, the Registration Statement and the Prospectus as amended or supplemented and (ii) if and to the extent requested by such Agent, on or prior to such Solicitation Time or Time of Delivery, as the case may be, a letter, dated such applicable date, to the effect that such Agent may rely on the opinion or opinions which were last furnished to such Agent pursuant to this Section 6(b) to the same extent as though it or they were dated the date of such letter authorizing reliance (except that the statements in such letter shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such date) or, in any case, in lieu of such a letter, an opinion or opinions of the same tenor as the opinion or opinions referred to in 11 -11- clause (i) but modified to relate to the Registration Statement and the Prospectus as amended and supplemented to such date; and in each case such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; (c) General Counsel for the Company, or other counsel for the Company satisfactory to such Agent, shall have furnished to such Agent his written opinions, dated the Commencement Date and each applicable date that is on or prior to such Solicitation Time or Time of Delivery, as the case may be, in form and substance satisfactory to such Agent and the Company. (d) The independent certified public accountants who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement shall have furnished to such Agent a letter, dated the Commencement Date and each applicable date that is on or prior to such Solicitation Time or Time of Delivery, as the case may be, in form and substance satisfactory to such Agent to the effect set forth in Annex III hereto; (e) There shall not have occurred any: (i) change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations, of the Company and its subsidiaries, taken as a whole, from that set forth in the Prospectus, as amended or supplemented at such Solicitation Time or Time of Delivery, as the case may be, that, in such Agent's judgment, is material and adverse and that makes it, in such Agent's judgment, impracticable to market the Securities on the terms and in the manner contemplated by the Prospectus, as so amended or supplemented; (ii) suspension or material limitation of trading generally on or by, as the case may be, the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (B) suspension of trading of any securities of the Company on any exchange or in any over-the-counter market, (C) declaration of a general moratorium on commercial banking activities in New York by either Federal or New York State authorities or (D) any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in such Agent's judgment, is material and adverse and, in the case of any of the events described in clauses (A) through (D), such event, singly or together with any other such event, makes it, in such Agent's judgment, impracticable to market the Securities on the terms and in the manner contemplated by the Prospectus, as amended or supplemented at such Solicitation Time or Time of Delivery, as the case may be; and 12 -12- (iii) downgrading 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 Securities Act; Except, in each case, as disclosed to such Agent in writing by the Company prior to such Solicitation Time, or unless in each case described in (ii) above, the relevant event shall have occurred and been known to such Agent prior to such Solicitation Time, as the case may be. (f) The Company shall have furnished or caused to be furnished to such Agent certificates of officers of the Company dated the Commencement Date and each applicable date that is on or prior to such Solicitation Time or Time of Delivery, as the case may be, in such form and executed by such officers of the Company as shall be satisfactory to such Agent, as to the accuracy of the representations and warranties of the Company herein at and as of the Commencement Date or such applicable date, as the case may be, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to the Commencement Date or such applicable date, as the case may be, as to the matters set forth in subsections (a) and (e) of this Section 6, and as to such other matters as such Agent may reasonably request. 7. Indemnification. (a) The Company will indemnify and hold harmless each Agent, and each person, if any, who controls such Agent within the meaning of the Act, against any losses, claims, damages or liabilities, joint or several, to which such Agent may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus, the Prospectus as amended or supplemented or any other prospectus relating to the Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse such Agent for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the Registration Statement, the Prospectus, the Prospectus as amended or supplemented or any other prospectus relating to the Securities, or any such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by such Agent expressly for use therein, and provided, further, that the indemnity agreement contained in this paragraph in respect of any Preliminary Prospectus shall not inure to the benefit of either Agent on account of any such losses, claims, damages or liabilities arising from the sale of the Securities to any offeree if such Agent failed to send or give a copy of the Prospectus as amended or supplemented 13 -13- (excluding documents incorporated therein by reference), if any amendments or supplements thereto shall have been furnished, at or prior to the time of written confirmation of the sale involved, to such offeree with or prior to the written confirmation of such sale. (b) Each Agent will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus, the Prospectus as amended or supplemented or any other prospectus relating to the Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement, the Prospectus, the Prospectus as amended or supplemented or any other prospectus relating to the Securities, or any such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by such Agent expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred. (c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either paragraph (a) or (b) above, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the reasonable fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them; provided, however, that the indemnifying party shall only be responsible for the fees of such counsel to the extent they are reasonably incurred. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses, to the extent they are 14 -14- reasonable, shall be reimbursed as they are incurred. Such firm shall be designated in writing by the Agents, in the case of parties indemnified pursuant to paragraph (a) above, and by the Company, in the case of parties indemnified pursuant to paragraph (b) above. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) If the indemnification provided for in this Section 7 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and each Agent on the other from the offering of the Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and each Agent on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and each Agent on the other shall be deemed to be in the same proportion as the total net proceeds from the sale of Securities (before deducting expenses) received by the Company bear to the total commissions or discounts received by such Agent in respect thereof. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading relates to information supplied by the Company on the one hand or by any Agent on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and each Agent agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by per capita allocation (even if all Agents were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages 15 -15- or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), an Agent shall not be required to contribute any amount in excess of the amount by which the total public offering price at which the Securities purchased by or through it were sold exceeds the amount of any damages which such Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of each of the Agents under this subsection (d) to contribute are several in proportion to the respective purchases made by or through it to which such loss, claim, damage or liability (or action in respect thereof) relates and are not joint. (e) The obligations of the Company under this Section 7 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Agent within the meaning of the Act; and the obligations of each Agent under this Section 7 shall be in addition to any liability which such Agent may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act. 8. Nonperformance. Each Agent, in soliciting offers to purchase Securities from the Company and in performing the other obligations of such Agent hereunder (other than in respect of any purchase by an Agent as principal, pursuant to a Terms Agreement or otherwise), is acting solely as agent for the Company and not as principal. Each Agent will make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Securities from the Company was solicited by such Agent and has been accepted by the Company, but such Agent shall not have any liability to the Company in the event such purchase is not consummated for any reason. If the Company shall default on its obligation to deliver Securities to a purchaser whose offer it has accepted, the Company shall (i) hold each Agent harmless against any loss, claim or damage arising from or as a result of such default by the Company and (ii) notwithstanding such default, pay to the Agent that solicited such offer any commission to which it would be entitled in connection with such sale. 9. Survival of Agreement. The respective indemnities, agreements, representations, warranties and other statements by any Agent and the Company set forth in or made pursuant to this Agreement shall remain in full force and effect regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Agent or any controlling person of any Agent or the Company, or any officer or director or any controlling person of the Company, and shall survive each delivery of and payment for any of the Securities. 16 -16- 10. Suspension or Termination. The provisions of this Agreement relating to the solicitation of offers to purchase Securities from the Company may be suspended or terminated at any time by the Company as to any Agent or by any Agent as to such Agent upon the giving of written notice of such suspension or termination to such Agent or the Company, as the case may be. In the event of such suspension or termination with respect to any Agent, (i) this Agreement shall remain in full force and effect with respect to any Agent as to which such suspension or termination has not occurred, (ii) this Agreement shall remain in full force and effect with respect to the rights and obligations of any party which have previously accrued or which relate to Securities which are already issued, agreed to be issued or the subject of a pending offer at the time of such suspension or termination and (iii) in any event, this Agreement shall remain in full force and effect insofar as the fourth paragraph of Section 2(a), Section 4(d), Section 4(e), Section 5, Section 7, Section 8 and Section 9 hereof are concerned. 11. Notices. Except as otherwise specifically provided herein or in the Administrative Procedure, all statements, requests, notices and advices hereunder shall be in writing, or by telephone if promptly confirmed in writing, and if to _____________________, shall be sufficient in all respects when delivered or sent by facsimile transmission or registered mail to ______________________________________________________________, Attention: _________________________________, Facsimile Transmission No. _____________, and if to ___________________________, shall be sufficient in all respects when delivered or sent by facsimile transmission or registered mail to __________________________________, Facsimile Transmission No. _______________________, Attention: _______________________________, and if to the Company shall be sufficient in all respects when delivered or sent by facsimile transmission or registered mail to Conectiv, 800 King Street, Wilmington, Delaware 19899, Facsimile Transmission No. (302) 429-3119, Attention: Treasurer. 12. Benefit of Agreement. This Agreement and any Terms Agreement shall be binding upon, and inure solely to the benefit of, each Agent and the Company, and to the extent provided in Section 7, Section 8 and Section 9 hereof, the officers and directors of the Company and any person who controls any Agent or the Company, and their respective personal representatives, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement or any Terms Agreement. No purchaser of any of the Securities through or from any Agent hereunder shall be deemed a successor or assign by reason of such purchase. 13. Definition of Business Day. Time shall be of the essence in this Agreement and any Terms Agreement. As used herein, the term "business day" shall mean any day when the office of the Commission in Washington, D.C. and banks located in the City of New York are normally open for business. 14. Governing Law. This Agreement and any Terms Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to the conflict of law provisions thereof. 17 -17- 15. Execution in Counterparts. This Agreement and any written Terms Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be an original, but all of such respective counterparts shall together constitute one and the same instrument. 18 -18- If the foregoing is in accordance with your understanding, please sign and return to us two counterparts hereof, whereupon this letter and the acceptance by each of you thereof shall constitute a binding agreement between the Company and each of you in accordance with its terms. Very truly yours, CONECTIV By: ---------------------------------- Title: ------------------------------- Accepted in New York, New York, as of the date hereof: [AGENT] By ---------------------------------- Title: ------------------------------ [AGENT] By: --------------------------------- Title: ------------------------------ 19 -19- ANNEX I CONECTIV MEDIUM TERM NOTES, SERIES __ TERMS AGREEMENT ___________, 199_ [Agent] Dear Sirs: Conectiv (the "Company") proposes, subject to the terms and conditions stated herein and in the Distribution Agreement, dated __________, 199_ (the "Distribution Agreement"), between the Company, on the one hand, and _____________________________________________________(the "Agents") on the other, to issue and sell to _________________________ the securities specified in the Schedule hereto (the "Purchased Securities"). Each of the provisions of the Distribution Agreement not specifically related to the solicitation by the Agents, as agents of the Company, of offers to purchase Securities is incorporated herein by reference in its entirety, and shall be deemed to be part of this Agreement to the same extent as if such provisions had been set forth in full herein. Nothing contained herein or in the Distribution Agreement shall make any party hereto an agent of the Company or make such party subject to the provisions therein relating to the solicitation of offers to purchase securities from the Company, solely by virtue of its execution of this Agreement. Each of the representations and warranties set forth in the Distribution Agreement shall be deemed to have been made at and as of the date of this Agreement, except that each representation and warranty in Section 1 of the Distribution Agreement which makes reference to the Prospectus shall be deemed to be a representation and warranty as of the date of the Distribution Agreement in relation to the Prospectus (as therein defined), and also a representation and warranty as of the date of this Agreement in relation to the Prospectus as amended and supplemented to relate to the Purchased Securities. An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Purchased Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission. 20 -20- Subject to the terms and conditions set forth herein and in the Distribution Agreement incorporated herein by reference, the Company agrees to issue and sell to ____________________________ and ______________________________________ agrees to purchase from the Company the Purchased Securities, at the time and place, in the principal amount and at the purchase price set forth in the Schedule hereto. If the foregoing is in accordance with your understanding, please sign and return to us two counterparts hereof, and upon acceptance hereof by you this letter and such acceptance hereof, including those provisions of the Distribution Agreement incorporated herein by reference, shall constitute a binding agreement between you and the Company. CONECTIV By: ------------------------------------- Title: ---------------------------------- Accepted in New York, New York, as of the date hereof: [PURCHASING AGENT] By: ----------------------------------- Title: -------------------------------- 21 -21- SCHEDULE TO ANNEX I Title of Purchased Securities: Aggregate Principal Amount: Price to Public: Purchase Price: Method of and Specified Funds for Payment of Purchase Price: [By certified or official bank check or checks, payable to the order of the Company, in immediately available funds] [By wire transfer to a bank account specified by the Company in immediately available funds] Time of Delivery: Closing Location: Maturity: Interest Rate: Interest Payment Dates: Initial Interest Payment Date: Redemption Provisions: Repayment Provisions: Documents to be Delivered: The following documents referred to in the Distribution Agreement shall be delivered as a condition to the Closing: [(1) The opinion or opinions of counsel to the Agents referred to in Section 6(b).] 22 -22- [(2) The opinion of counsel to the Company referred to in Section 6(c).] [(3) The accountants' letter referred to in Section 6(d).] [(4) The officers' certificate referred to in Section 6(f).] Other Provisions (including Syndicate Provisions, if applicable): 23 -23- ANNEX II CONECTIV ADMINISTRATIVE PROCEDURE This Administrative Procedure relates to the Securities defined in the Distribution Agreement, dated [insert date] (the "Distribution Agreement"), between Conectiv (the "Company") and [insert names of agents] (together, the "Agents"), to which this Administrative Procedure is attached as Annex II. Defined terms used herein and not defined herein shall have the meanings given such terms in the Distribution Agreement, the Prospectus as amended or supplemented or the Indenture. The procedures to be followed with respect to the settlement of sales of Securities directly by the Company to purchasers solicited by an Agent, as agent, are set forth below. Such procedures shall also be followed with respect to sales of Securities by the Company to an Agent, as principal, unless the Company and such Agent agree to follow different procedures pursuant to a written Terms Agreement. An Agent, in relation to a purchase of a Security by a purchaser solicited by such Agent, is referred to herein as the "Selling Agent" and, in relation to a purchase of a Security by such Agent as principal as the "Purchasing Agent". The Company will advise each Agent in writing of those persons with whom such Agent is to communicate regarding offers to purchase Securities and the related settlement details. Posting Rates by Company: The Company and the Agents will discuss from time to time the rates of interest per annum to be borne by and the maturity of Securities that may be sold as a result of the solicitation of offers by an Agent. The Company may establish a fixed set of interest rates and maturities for an offering period ("posting"). If the Company decides to change already posted rates, it will promptly advise the Agents to suspend solicitation of offers until the new posted rates have been established with the Agents. Acceptance of Offers by Company: Each Agent will promptly advise the Company by telephone or other appropriate means of all reasonable offers to purchase Securities, other than those rejected by such Agent. Each Agent may, in its discretion reasonably exercised, reject any offer received by it in whole or in part. Each Agent also may make offers to the Company to purchase Securities as a Purchasing Agent. 24 -24- The Company will have the sole right to accept offers to purchase Securities and may reject any such offer in whole or in part. The Company will promptly notify the Agent of its acceptance or rejection of an offer to purchase Securities. If the Company accepts an offer to purchase Securities, it will confirm such acceptance in writing to the Agent and the Trustee. Communication of Sale Information to Company by Agent: After the acceptance of an offer by the Company, the Agent will communicate the following details of the terms of such offer (the "Sale Information") to the Company by telephone (confirmed in writing) or by facsimile transmission or other acceptable written means: (1) Principal amount of Securities to be purchased; (2) If a Fixed Rate Security, the interest rate; (3) Maturity Date; (4) Issue Price; (5) Selling Agent's commission or Purchasing Agent's discount, as the case may be; (6) Net proceeds to the Company; (7) Settlement Date; (8) If a redeemable Security, such of the following as are applicable: (i) Redemption Commencement Date, (ii) Initial Redemption Price (% of par), and (iii) Amount (% of par) that the Redemption Price shall decline on each anniversary of the Redemption Commencement Date; [(9) If a Floating Rate Security, such of the following as are applicable: (i) Interest Rate Basis, (ii) Index Maturity, (iii) Spread or Spread Multiplier, (iv) Maximum Rate, (v) Minimum Rate, (vi) Initial Interest Rate, (vii) Interest Reset Dates, (viii) Calculation Dates, (ix) Interest Determination Dates, (x) Interest Payment Dates, (xi) Regular Record Dates, and (xii) Calculation Agent;] (10) Name, address and taxpayer identification number of the registered owner; (11) Denomination of certificates to be delivered at settlement; 25 -25- (12) Whether such Security is a Book-Entry Security or a Certificated Security; and (13) Whether such Agent is acting as Selling Agent or Purchasing Agent. Preparation of Pricing Supplement by Company: If the Company accepts an offer to purchase a Security, it will prepare a Pricing Supplement. The Company will arrange to have ten Pricing Supplements filed with the Commission not later than the close of business of the Commission on the fifth business day following the date on which such Pricing Supplement is first used, and will promptly deliver copies of such Pricing Supplement to the Agent no later than 11:00 a.m. on the day following the Trade Date via next day mail or telecopy at the following locations: Delivery of Confirmation and Prospectus to Purchaser by Selling Agent: The Selling Agent will deliver to the purchaser of a Security a written confirmation of the sale and delivery and payment instructions. In addition, the Selling Agent will deliver to such purchaser or its agent the Prospectus as amended or supplemented (including the Pricing Supplement) in relation to such Security prior to or together with the earlier of the delivery to such purchaser or its agent of (a) the confirmation of sale or (b) the Security. Date of Settlement: All offers solicited by a Selling Agent or made by a Purchasing Agent and accepted by the Company will be settled on a date (the "Settlement Date") which is the third business day after the date of acceptance of such offer, unless the Company and the purchaser agree to settlement (a) on any other business day after the acceptance of such offer or (b) with respect to an offer accepted by the Company prior to 10:00 a.m., New York City time, on the date of such acceptance. Instruction from Company to Trustee for Preparation of Securities, Preparation and Delivery of Securities by Trustee and Receipt of Payment Therefor: After receiving the Sale Information from the Agent, the Company will communicate such Sale Information to the Trustee by telephone (confirmed in writing) or by facsimile transmission or other acceptable written means. The Trustee will prepare each Security and appropriate receipts that will serve as the documentary control of the transaction. Each Security will be represented by either a Global Security (as defined below) 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 Security") or a certificate delivered to the holder thereof or a person designated by such holder (a "Certificated Security"). Except as set forth in the Prospectus, as 26 -26- amended or supplemented, an owner of a Book-Entry Security will not be entitled to receive a Certificated Security. A. PROCEDURES FOR BOOK-ENTRY SECURITIES In connection with the qualification of Book-Entry Securities 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 Representation from the Company and the Trustee to DTC, dated as of[insert date] (the "Letter of Representation"), and a Medium-Term Note Certificate Agreement between the Trustee and DTC dated [insert date], and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS"). On any Settlement Date for one or more Book-Entry Securities, the Company will issue a single global security in fully registered form without coupons (a "Global Security") representing up to U.S. $250,000,000 principal amount of all such Securities that have the same Original Issue Date, Maturity Date and other terms. Each Global Security will be dated and issued as of the date of its authentication by the Trustee. Each Global Security will bear an "Interest Accrual Date," which will be (i) with respect to an original Global Security (or any portion thereof), its original issuance date and (ii) with respect to any Global Security (or any portion thereof) issued subsequently upon exchange of a Global Security, or in lieu of a destroyed, lost or stolen Global Security, the most recent Interest Payment Date to which interest has been paid or duly provided for on the predecessor Global Security or Securities (or if no such payment or provision has been made, the original issuance date of the predecessor Global Security), regardless of the date of authentication of such subsequently issued Global Security. Book-Entry Securities may be payable only in U.S. dollars. No Global Security will represent any Certificated Security. Upon receipt of the Sale Information from the Company, the Trustee will then assign a CUSIP number to the Global Security representing such Security and will notify the Company and the Agent of such CUSIP number by telephone as soon as practicable. The Trustee will enter a pending deposit message through DTC's Participant Terminal System providing the following settlement information to DTC, the Agent and Standard & Poor's Corporation: 1. The Sale Information. 2. The Initial Interest Payment Date for such Security, the number of days by which such date succeeds the related DTC Record Date (which shall be the Record Date as defined in the Security) and, if known, amount of interest payable on such Initial Interest Payment Date. 27 -27- 3. The CUSIP number of the Global Security representing such Security. 4. Whether such Global Security will represent any other Book-Entry Security (to the extent known at such time). By 9:00 a.m. on the Settlement Date, the Trustee will complete and authenticate the Global Security representing such Security. By 10:00 a.m. on the Settlement Date, DTC will credit such Security to the Trustee's participant account at DTC. By 2:00 p.m. on the Settlement Date, the Trustee will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC to (i) debit such Security to the Trustee's participant account and credit such Security to the Agent's participant account and (ii) debit the Agent's settlement account and credit the Trustee's settlement account for an amount equal to the price of such Security less the Agent's commission, if any. 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 Security 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. Unless the Agent is the end purchaser of such Security, the Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Security to the Agent's participant account and credit such Security to the participant accounts of the Participants with respect to such Security and (ii) to debit the settlement accounts of such Participants and credit the settlement account of the Agent for an amount equal to the price of such Security. By 4:45 p.m. on the Settlement Date transfers of funds in accordance with SDFS deliver orders described in the two preceding paragraphs will be settled in accordance with SDFS operating procedures in effect on the Settlement Date. By 5:00 p.m. on the Settlement Date, the Trustee will credit to the account of the Company maintained with the Trustee in funds available for immediate use in the amount transferred to the Trustee by the Agent. Unless the Agent is the end purchaser of such Security, the Agent will confirm the purchase of such Security to the purchaser either by transmitting to the Participants with respect to such Security a confirmation order or orders through DTC's institutional delivery system or by mailing a written confirmation to such purchaser. 28 -28- If settlement of a Book-Entry Security is rescheduled or canceled, the Trustee, after receiving notice from the Company or the Agent, will deliver to DTC, through DTC's Participant Terminal System, a cancellation message to such effect by no later than 2:00 P.M. on the Business Day immediately preceding the scheduled Settlement Date. The Company will instruct the Trustee by facsimile transmission or other acceptable written means to authenticate and deliver the Certificated Securities no later than 2:15 p.m., New York City time, on the Settlement Date. Such instruction will be given by the Company prior to 3:00 p.m., New York City time, on the business day prior to the Settlement Date unless the Settlement Date is the date of acceptance by the Company of the offer to purchase Securities in which case such instruction will be given by the Company by 11:00 a.m., New York City time. B. PROCEDURES FOR CERTIFICATED SECURITIES In the case of a sale of Certificated Securities to a purchaser solicited by an Agent, the Trustee will, by 2:15 p.m., New York City time, on the Settlement Date, deliver the Securities to the Selling Agent for the benefit of the purchaser of such Securities against delivery by the Selling Agent of a receipt therefor. On the Settlement Date, the Selling Agent will deliver payment for such Securities in immediately available funds to the Trustee in an amount equal to the issue price of the Securities less the Selling Agent's commission; provided that the Selling Agent reserves the right to withhold payment for which it has not received funds from the purchaser. In the case of a sale of Securities to a Purchasing Agent, the Trustee will, by 2:15 p.m., New York City time, on the Settlement Date, deliver the Securities to the Purchasing Agent against delivery of payment for such Securities in immediately available funds to the Trustee in an amount equal to the issue price of the Securities less the Purchasing Agent's discount. In either case, promptly upon receipt of such funds from the Agent, the Trustee will wire an amount equal thereto to, or upon the order of, the Company in immediately available funds. The Trustee shall deliver Certificated Securities to: Failure to Settle: A. PROCEDURES FOR BOOK-ENTRY SECURITIES If the Trustee fails to enter an SDFS deliver order with respect to a Book-Entry Security, the Trustee may deliver to DTC, through DTC's Participant Terminal System, as soon as practicable a withdrawal message instructing DTC to debit such Security to the Trustee's participant account, provided that the Trustee's participant account contains a principal amount of 29 -29- the Global Security representing such Security 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 Securities 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 the procedures of the CUSIP Service Bureau of Standard & Poor's Corporation, 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 Securities represented by a Global Security, the Trustee will exchange such Global Security for two Global Securities, one of which shall represent such Book-Entry Security or Securities and shall be canceled immediately after issuance and the other of which shall represent the remaining Book-Entry Securities previously represented by the surrendered Global Security and shall bear the CUSIP number of the surrendered Global Security. If the purchase price for any Book-Entry Security is not timely paid to the Participants with respect to such Security 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 may enter SDFS deliver orders through DTC's Participant Terminal System reversing the orders entered. Thereafter, the Trustee will deliver the withdrawal message and take the related actions described in the preceding paragraph. Notwithstanding the foregoing, upon any failure to settle with respect to a Book-Entry Security, 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 Securities to have been represented by a Global Security, the Trustee will provide for the authentication and issuance of a Global Security representing the Book-Entry Securities to be represented by such Global Security and will make appropriate entries in its records. B. PROCEDURES FOR CERTIFICATED SECURITIES If a purchaser fails to make payment to the Selling Agent for a Certificated Security, the Selling Agent will promptly notify the Trustee and the Company thereof by telephone (confirmed in writing) or by facsimile transmission or other acceptable written means. The Selling Agent will immediately return the Certificated Security to the Trustee. Immediately upon receipt of such Security by the Trustee, the Trustee will debit the account of the Company in an amount equal to the amount previously credited thereto in respect of such Security and will return such funds to the Selling Agent. The Company will reimburse the Selling Agent on an equitable basis for its loss of the use of funds at the then prevailing broker-loan rate during the period when they were credited to the account of the Company. 30 -30- The Trustee will cancel the Certificated Security in respect of which the failure occurred, make appropriate entries in its records and, unless otherwise instructed by the Company, destroy the Security. -----END PRIVACY-ENHANCED MESSAGE-----