-----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, BnDm28eOZFzfXLpDVkxngiB+290ju47USAJMGXc2Li6GLJQxdEqk8pDHa4bj7nrc 3yyGbGOHf02mvzT2t+ct7Q== 0000893220-99-000157.txt : 19990215 0000893220-99-000157.hdr.sgml : 19990215 ACCESSION NUMBER: 0000893220-99-000157 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19990212 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONECTIV INC CENTRAL INDEX KEY: 0001029590 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 510377417 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-72251 FILM NUMBER: 99534417 BUSINESS ADDRESS: STREET 1: 800 KING STREET P O BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19899 BUSINESS PHONE: 3024293114 MAIL ADDRESS: STREET 1: 800 KING ST STREET 2: P O BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19899 S-3 1 FORM S-3 CONECTIV 1 As filed with the Securities and Exchange Commission on February 12, 1999 Registration No. 333- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CONECTIV (Exact name of registrant as specified in charter) Delaware 51-0377417 (State or other jurisdiction of (IRS Employer Identification No.) Incorporation or organization) 800 King Street Wilmington, DE 19899-0231 Attn: John C. van Roden, Jr. (302) 429-3525 (Address, including zip code, and telephone number including area code, of registrant's principal executive offices) Peter F. Clark, Esquire John C. van Roden, Jr. General Counsel Senior Vice President and Chief Financial Officer Conectiv Conectiv 800 King Street 800 King Street Wilmington, DE 19899 Wilmington, DE 19899 (302) 429-3311 (302) 429-3525 (Names, addresses, including zip codes, and telephone numbers, including area codes, of agents for service) It is respectfully requested that the Commission send copies of all notices, orders and communications to: J. Anthony Terrell, Esquire Thelen Reid & Priest LLP 40 West 57th Street New York, New York 10019 (212) 603-2000 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the registration statement becomes effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. /x/ If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. / / If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / / 2 CALCULATION OF REGISTRATION FEE
==================================================================================================================================== Title of Each Class Amount to be Registered Proposed Maximum Offering Proposed Maximum Amount of Registration Securities to be Registered Pricing Per Unit (1) Aggregate Offering Price Fee (1) (1) - ------------------------------------------------------------------------------------------------------------------------------------ Debt Securities $250,000,000 100% $250,000,000 $69,500.00 - ------------------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o). The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. 3 The information in this Prospectus is not complete and may be changed. We may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. this prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED FEBRUARY 12, 1999 CONECTIV LOGO PROSPECTUS CONECTIV 800 King Street Wilmington, Delaware 19899 (302) 429-3525 $250,000,000 DEBT SECURITIES We may offer from time to time unsecured debt securities of senior notes and debentures and subordinated notes and debentures and/or other unsecured evidences of indebtedness in one or more series. The aggregate initial offering price of the securities that are offered will not exceed $250,000,000. We will offer the securities in an amount and on terms to be determined by market conditions at the time of the offering. We will provide specific terms of these securities in supplements to this prospectus. You should read this prospectus and any supplement carefully before you invest. This prospectus may not be used to sell securities unless accompanied by a prospectus supplement. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OF THE SECURITIES TO BE ISSUED UNDER THIS PROSPECTUS OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is _____, 1999 2 4 TABLE OF CONTENTS ABOUT THIS PROSPECTUS ..................................................... 3 WHERE YOU CAN FIND MORE INFORMATION ....................................... 3 THE COMPANY ............................................................... 5 USE OF PROCEEDS ........................................................... 6 RATIO OF EARNINGS TO FIXED CHARGES ........................................ 6 DESCRIPTION OF DEBT SECURITIES ............................................ 7 PLAN OF DISTRIBUTION ...................................................... 13 LEGAL MATTERS ............................................................. 15 EXPERTS ................................................................... 15
ABOUT THIS PROSPECTUS This prospectus is part of a registration statement that Conectiv ("we" or "Conectiv") filed with the Securities and Exchange Commission (the "SEC") utilizing a shelf registration process. Under this shelf process, we may sell Debt Securities in a cumulative amount up to $250,000,000 in one or more offerings over the next several years. This prospectus provides you with a general description of the Debt Securities we may offer. Whenever we sell Debt Securities under this registration statement, we will provide a prospectus supplement which will contain specific information about the terms of that particular transaction. The prospectus supplement or pricing supplement may also add, update or change information contained in this prospectus. Although we will try to include all information that we believe may be material to investors, certain details that may be important to you may have been excluded. To obtain more detailed information, you should read the exhibits filed by us with this registration statement or our other SEC filings. You also should read this prospectus and any prospectus supplement together with the additional information described under the heading "WHERE YOU CAN FIND MORE INFORMATION." We also regularly file with the SEC documents that include information about our financial statements and our company, including information on matters that might affect our future financial results. Our principal subsidiaries, Delmarva Power & Light Company ("Delmarva") and Atlantic City Electric Company ("ACE"), also periodically file documents with the SEC. It is important for you to read these documents, this Prospectus and the applicable Prospectus Supplement before you invest. WHERE YOU CAN FIND MORE INFORMATION AVAILABLE INFORMATION We file annual, quarterly and special reports, and other information with the SEC. You may read and copy any document we file at the SEC's Public Reference Room located at 450 Fifth Street, N. W., Room 1024 Washington, D. C. 20549 or at the SEC's other public reference facilities located at the New York Regional Office 7 World Trade Center, Suite 1300, New York, New York 10048 and Chicago Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Please call the SEC at 1-800-SEC-0330 to obtain information about the operation of the public reference facilities. The Company's Common Stock and Class A Common Stock are listed on the New York Stock Exchange (NYSE: CIV and CIV A). 3 5 Our SEC filings are also available for inspection at the offices of the New York Stock Exchange at 20 Broad Street, New York, New York 10005. Please call the New York Stock Exchange at (212) 656-5060 to learn how to obtain copies. The SEC also maintains an Internet world wide web site that contains annual and quarterly reports, proxy statements and other information about issuers. Our SEC filings are available to the public over the Internet at the SEC's website at http://www.sec.gov. Our SEC filings can also be reviewed at Conectiv's Internet web site at http://www.conectiv.com. Please click on "InvestorInfo" on the home page to access our SEC filings. INCORPORATION BY REFERENCE We incorporate by reference the information we file with the SEC, which means we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is an important part of this prospectus, and information that we file with the SEC at a later date will automatically update this prospectus. We incorporate by reference the documents listed below and any future filings with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until all the Debt Securities are sold: - - Delmarva's Annual Report on Form 10-K for the year ended December 31, 1997; - - Combined Atlantic Energy, Inc. ("Atlantic") and ACE's Annual Report on Form 10-K for the year ended December 31, 1997; - - Our quarterly reports on Form 10-Q for the periods ended March 31, 1998, June 30, 1998 and September 30, 1998; - - Delmarva's quarterly reports on Form 10-Q for the periods ended March 31, 1998, June 30, 1998 and September 30, 1998; - - ACE's quarterly reports on Form 10-Q for the periods ended March 31, 1998, June 30, 1998 and September 30, 1998; - - Our current reports on Form 8-K dated March 6, 1998 (as amended on March 9, 1998), April 23, 1998, August 3, 1998, September 18, 1998, November 2, 1998 and December 8, 1998, and January 26, 1999; - - ACE's current reports on Form 8-K dated March 3, 1998, March 5, 1998, September 18, 1998 and December 7, 1998; and - - Delmarva's current reports on Form 8-K dated March 3, 1998, March 4, 1998, March 9, 1998 and January 26, 1999. You may request a copy of these filings at no cost, by writing or telephoning us at the following address: Corporate Secretary -- Assistant Secretary Conectiv 800 King Street Wilmington, Delaware 19899 (302) 429-3935 4 6 You should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with different information. We may only use this prospectus to sell Debt Securities if it is accompanied by a prospectus supplement. We are only offering these Debt Securities in states where the offer is permitted. You should not assume that the information in this prospectus or any applicable prospectus supplement is accurate as of any date other than the date on the front of those documents. THE COMPANY Conectiv is a registered public utility holding company under the Public Utility Holding Company Act of 1935, as amended ("PUHCA") and is headquartered in Wilmington, Delaware. On March 1, 1998, through a combination of Delmarva and Atlantic, Delmarva and its direct subsidiaries and Atlantic's direct subsidiaries, including ACE, became direct subsidiaries of the Company and Atlantic was merged out of existence. Delmarva was incorporated under the laws of the State of Delaware in 1909 and under the laws of the Commonwealth of Virginia in 1979. Delmarva's primary business includes producing, purchasing, delivering and selling electricity; purchasing, transporting and selling natural gas; and providing other services which are primarily energy-related. Delmarva provides electric service in Delaware, Maryland and Virginia and gas service in Delaware. ACE is a public utility company organized under the laws of the State of New Jersey in 1924 by the merger and consolidation of several utility companies. ACE is engaged in the generation, transmission, distribution, and sale of electric energy in the southern part of New Jersey. Conectiv provides vital services (energy, telecommunications, heating, cooling, plumbing) to homes and businesses in the mid Atlantic region. We currently have 950,000 regulated retail energy customers and 175,000 nonregulated retail energy, services and telecommunications customers in Delaware, southern New Jersey, and parts of Virginia, Maryland and southeastern Pennsylvania. Conectiv is organized in three business groups: Energy, Services and Power Delivery. Energy is a multi-fueled, asset-backed energy (electric, natural gas, oil) provider to regulated and unregulated customers throughout the mid Atlantic region. Power Delivery delivers electricity and natural gas in four regulated franchise jurisdictions. Services includes Conectiv Communications Inc. ("CCI"), Conectiv Services Inc. ("CSI") and Conectiv Thermal Inc. ("CTS"). CCI was formed in November 1997 and provides facilities-based local and long distance telecommunications services. CSI commenced operations in 1996 and has grown through acquisitions. CTS began operation in 1995 and provides thermal energy services to large commercial and industrial customers, including casinos, hotels and office complexes, primarily in New Jersey. We have received authorization from the SEC pursuant to the PUHCA for certain actions designed to further simplify and consolidate our non-utility subsidiaries. The restructuring will be accomplished in two phases with final phase to be completed by June 1999. 5 7 The information above concerning Conectiv and its subsidiaries is only a summary and does not purport to be comprehensive. For additional information concerning the Company and its subsidiaries, you should refer to the information described in "Where You Can Find More Information." The principal executive offices of Conectiv are located at 800 King Street, Wilmington, DE 19899 and the telephone number for Conectiv information is 1-800-424-8401. USE OF PROCEEDS Unless the applicable prospectus supplement indicates otherwise, we anticipate adding the net proceeds to be received from the sale of the offered Debt Securities to our general funds, which may be used to: - - repay short-term debt; - - repurchase shares of our common stock; - - finance capital expenditures of non-regulated subsidiary companies; and - - provide working capital. Until all of the net proceeds are used, they may be temporarily invested in short-term interest-bearing securities. RATIO OF EARNINGS TO FIXED CHARGES Our consolidated ratios of earnings to fixed charges for the periods indicated are as follow:
TWELVE MONTHS ENDED DEC. 31 TWELVE MONTHS ENDED --------------------------- SEPTEMBER 30, 1998 1997 1996 1995 1994 1993 - ------------------ ---- ---- ---- ---- ---- 2.62 2.63 2.83 2.92 2.85 2.88
For purposes of computing the ratio, earnings are net income plus income taxes and fixed charges, less nonutility capitalized interest. Fixed charges consist of interest on long- and short-term debt, amortization of debt discount, premium and expense, preferred stock dividend requirements of subsidiaries and interest on leases. Preferred dividend requirements for purposes of computing the ratio have been increased to an amount representing the pre-tax earnings that would be required to cover such dividend requirements. 6 8 DESCRIPTION OF DEBT SECURITIES The following description states the general terms and provisions of our unsecured debt securities. In this prospectus, "Debt Securities" means the debentures, notes, bonds and other evidences of indebtedness that we will issue and the Trustee will authenticate and deliver under an Indenture to be entered into between us and the trustee, the First Union Trust Company, National. Association. The prospectus supplement will describe the specific terms of the Debt Securities offered through that prospectus supplement and any general terms outlined in this section that will not apply to those Debt Securities. We have summarized certain terms and provisions of the Indenture in this section. The summary is not complete. We have also filed the form of the Indenture as an exhibit to this registration statement. You should read the form of Indenture for additional information before you buy any Debt Securities. The Indenture will be qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). You should refer to the Trust Indenture Act for provisions that apply to the Debt Securities. In the summary, we have included references to section numbers of the Indenture so that you can more easily locate these provisions. This summary also is subject to and qualified by reference to the description of the particular terms of the Debt Securities described in the applicable prospectus supplement or supplements and pricing supplement or supplements. Capitalized terms used but not defined in this summary have the meanings specified in the Indenture. GENERAL The Debt Securities will be our direct, senior, unsecured obligations and will rank equally with any other senior, unsecured debt of Conectiv. Debt Securities issued under the Indenture will be issued as part of a series that has been established pursuant to a supplemental indenture, a Board Resolution or an Officer's Certificate designating the specific terms of the series of Debt Securities (Section 2.01). These terms will be described in a prospectus supplement and will include, among other things, the following: - - The title of the Debt Securities of the series; - - The denominations in which the Debt Securities can be issued if other than denominations of $1,000 or any integral multiple thereof; - - Any limit upon the aggregate principal amount of the Debt Securities; - - The dates on which the principal and premium, if applicable, of the Debt Securities will be payable; - - The interest rate which the Debt Securities will bear and the interest rate payment dates for the Debt Securities; - - The place or places where the principal of and premium, if any, and interest, if any, on any of the Debt Securities will be payable; - - The percentage of the principal amount at which the Debt Securities will be issued and any optional redemption provisions that would permit us to redeem the Debt Securities prior to their final maturity; 7 9 - - Any sinking fund provisions that would obligate us to repurchase or to redeem part or all of the Debt Securities prior to their final maturity; - - Any deletions or modifications of or additions to the Events of Default or covenants of Conectiv; - - The applicability of the provisions described under the Heading "Defeasance" to the Debt Securities; - - Whether the Debt Securities will be issued in whole or in part in the form of a "global security" (meaning a debt security issued under the Indenture to represent all or part of an entire series of Debt Securities); and - - Any other terms of the Debt Securities. Some of the Debt Securities may be issued at a discount below their stated principal amount bearing no interest or a reduced interest rate. These Debt Securities are known as "Discount Securities." In such a case, any applicable United States federal income tax consequences and other special factors applicable to the Discount Securities should be considered prior to purchasing such Discount Securities and will be described in a prospectus supplement. PAYMENT OF DEBT SECURITIES (Sections 2.01 and 2.12) Unless we state differently in a prospectus supplement, we may make interest payments on any series of Debt Securities by mailing a check to the address of the Holder listed on the Security Registrar's books or by wire transfer to the account of any Holder as of the close business on the regular record date relating to such payment. However, we will pay interest payable at maturity to the person to whom the principal is paid. If we have defaulted in the payment of interest on any Debt Security, then we shall pay defaulted interest in any lawful manner. We may pay such defaulted interest to the Holders of Debt Securities as of the close of business on a date at least 5 days prior to the date on which we propose to pay such defaulted interest. Unless otherwise specified in the prospectus supplement, we will pay principal, premium, if any, and interest on the Debt Securities at maturity upon presentation of the Debt Securities at the corporate trust office of First Union Trust Company, National Association, One Rodney Square, 920 King Street Wilmington, Delaware, 19801. REGISTRATION AND TRANSFER (Sections 2.05 and 2.08) You may exchange or transfer Debt Securities at the office of the Trustee. The Trustee acts as our agent for registering Debt Securities in the names of Holders and transferring Debt Securities. The Company may appoint or remove additional agents or may act as its own agent for this purpose. The Company may at its discretion change the place for registration of transfer of the Debt Securities. Except as otherwise provided in a prospectus supplement, there will be no service charge for the registration of transfer or exchange of any Debt Security but we may require you to pay any applicable tax or other governmental charge payable in connection with the registration of transfer or exchange of Debt Securities. We are not required to execute or to provide for the registration of transfer of, or the exchange 8 10 of, Debt Securities during a period of 15 days prior to giving any notice of redemption of such Debt Securities called for redemption or (b) any Debt Securities selected for redemption, except the unredeemed portion of any Debt Securities being redeemed in part. CONSOLIDATION, MERGER OR SALE (SECTION 4.01) The Indenture generally permits us to merge or consolidate with or to sell or lease all or substantially all of our assets to another United States based company as long as: - - the resulting entity expressly assumes all of our obligations under the Debt Securities and Indenture; - - immediately after the transaction, no Event of Default exists; - - Conectiv delivers to the Trustee an officer's certificate and legal opinion stating that the transaction complies with the Indenture; and - - certain other conditions are met. If we merge or consolidate with or sell all or substantially all of our assets to another United States based company, and satisfy the conditions enumerated above, then we will be relieved of all obligations under the Indenture and the Debt Securities. EVENTS OF DEFAULT (SECTION 5.01) "Event of Default," when used in the Indenture with respect to any series of Debt Securities, means any of the following: - - failure to pay interest on Debt Securities for 30 days after the same becomes due; - - failure to pay principal on Debt Securities when due; - - failure to comply with any of our agreements in the Debt Securities or the Indenture that applies to Debt Securities for 60 days after receiving written notice of such failure; - - certain events in bankruptcy, insolvency or reorganization of Conectiv; or - - any other Event of Default described in a prospectus supplement applicable to that certain series of Debt Securities. REMEDIES Acceleration of Maturity (Section 5.02 and 5.03) If an Event of Default (other than an Event of Default with respect to certain events in bankruptcy, insolvency or reorganization of Conectiv) occurs and is continuing, then either the Trustee or the Holders of 9 11 not less than 33% in aggregate principal amount of Debt Securities may declare the principal amount (or if \ any of the Debt Securities are Discount Securities, such portion of the principal amount thereof as may specified in the terms thereof) of all such Debt Securities, together with premium, if any, and accrued interest, if any, to be due and payable immediately by written notice to us (and to the Trustee if given by the Holders of Debt Securities). If such a declaration is made, the Holders of a majority of the aggregate principal amount of that series can void the declaration. If any Event of Default with respect to certain events in bankruptcy, insolvency or reorganization of Conectiv occurs and is continuing, the principal of, together with premium, if any, and interest, if any, on all the Debt Securities shall become and be immediately due and payable without any declaration or other act on the part of the Trustee of any Holders. With certain exceptions, the Holders of a majority in principal amount of the Debt Securities may waive an existing Event of Default. If all existing Events of Default have been waived or cured, except nonpayment of any amount 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. The prospectus supplement for each series of Debt Securities that are Discount Securities will describe the particular provisions that relate to the acceleration of maturity of a portion of the principal amount of such series when an Event of Default occurs and continues. Right to Direct Proceedings (Section 5.05) If an Event of Default occurs and is continuing, the Holders of a majority in Principal Amount of the Debt Securities will have the right to 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; provided, however, that (a) such direction does not conflict with any rule of law or with the Indenture, and could not involve the Trustee in personal liability in circumstances where indemnity would not, in the Trustee's sole discretion, be adequate, (b) the Trustee determines that such direction does not unduly prejudice the rights of the other Holders and (c) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Limitation on Right to Institute Proceedings (Section 5.06) No Holder of Debt Securities shall have the right to pursue any remedy with respect to the Indenture or the Debt Securities unless: (a) the Holder provides the Trustee with written notice of a continuing Event of Default; (b) the Holders of at least 33% in Principal Amount of the Debt Securities make a written request to the Trustee to pursue the remedy and have offered the Trustee reasonable security or indemnity against any loss, liability or expense; (c) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and 10 12 (d) the Holders of a majority of the [Principal Amount] of the Debt Securities do not give the Trustee a direction inconsistent with the request during the 60-day period. No Impairment of Right to Receive Payment (Section 5.07) Notwithstanding any other provision in the Indenture (including remedies which are subject to conditions precedent), each Holder of Debt Securities will have the right, which is absolute and unconditional, to receive payment of the principal of and premium, if any, and interest, if any, on the Debt Securities when due and to institute suit for the enforcement of any such payment. Such rights may not be impaired or affected without the consent of such Holder. Notice of Default (Section 6.05) If an Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each Holder of Debt Securities notice of the Event of Default. The Trust Indenture Act currently permits the Trustee to withold notices of default (except for certain payment defaults) if the Trustee in good faith determines that withholding the notice is in the interests of the Holders. MODIFICATION OF THE INDENTURE (SECTIONS 5.04, 8.01 AND 8.02) Modification Without Consent Conectiv and the Trustee may amend the Indenture or the Debt Securities without notice for any of the following purposes: - to cure any ambiguity, omission, defect or inconsistency, or to make any other changes that do not adversely affect the rights of any holder of the Debt Securities in any material respect; or - to evidence the succession of another entity to Conectiv and the assumption by any such successor of the covenants of Conectiv in the Indenture and the Debt Securities; or - to provide for the procedures required to permit Conectiv to utilize, at its option, a non-certificated system of registration for all or any series of the Debt Securities; or - to provide collateral security for the Debt Securities; or - to add to the covenants of Conectiv for the benefit of all Holders of the Debt Securities of one or more specific series or for the benefit of the holders of the Debt Securities or to surrender any right or power herein conferred upon Conectiv by the Indenture; or - to make any change that does not adversely affect the rights of any holder of any Debt Securities in any material respect. Without limiting the generality of the foregoing, if the Trust Indenture Act is amended after the date 11 13 of the Indenture so as to require changes to the Indenture or the incorporation therein of additional provisions or so as to permit changes to, or the elimination of, provisions which, at the date of the Indenture or at any time thereafter, were required by the Trust Indenture Act to be contained in the Indenture, the Indenture will be deemed to have been amended so as to conform to such amendment or to effect such changes or elimination, and the Company and the Trustee may, without the consent of any holders of any Debt Securities, enter into one or more supplemental indentures to evidence or effect such amendment. Modification With Consent Conectiv and the Trustee may amend and/or supplement the Indenture or the Debt Securities without notice to any Holder but with the written consent of the Holders of more than 50% of the aggregate principal amount of outstanding Debt Securities of each series affected by the change. Without the consent of each Holder affected, any amendment may not: - reduce the amount of Debt Securities whose Holders must consent to an amendment; - reduce the rate of or extend the time for payment of interest on any Debt Security; - reduce the principal of or extend the fixed maturity of any Debt Security; - reduce the premium payable upon the redemption of any Debt Security or change the time at which any Debt Security may or shall be redeemed; - make any Debt Security payable in money other than that stated in the Debt Security; or - reduce the number of holders of Debt Securities that are required for any waiver of default under the Indenture. We may enter into supplemental indentures for other specified purposes, including the creation of a new series of Debt Securities, without the consent of any Holder of Debt Securities. DEFEASANCE (SECTION 7.01) We will be discharged from our obligations on the Debt Securities of any series, or any portion of the principal amount thereof, at any time that we irrevocably deposit in trust with the Trustee or any Paying Agent (other than Conectiv) cash or non-redeemable U.S. Government Obligations, or a combination of the two, sufficient to pay the principal of, interest, and any premium or other sums due to the maturity date or a redemption date of the Debt Securities of the series. If this happens, the Holders of Debt Securities of the series will not be entitled to the benefits of the Indenture except for registration of transfer and exchange of Debt Securities and replacement of lost, stolen or mutilated Debt Securities. "U.S. Government Obligations" include direct obligations of, or obligations unconditionally guaranteed by, the United States entitled to the benefit of the full faith and credit thereof and certificates, depositary receipts or other instruments which evidence a direct ownership interest in such obligations or in any specific interest or principal payments due in respect thereof. 12 14 DISCHARGE OF INDENTURE (SECTION 7.02) The Indenture will cease to be of any effect when: - - all previously issued Debt Securities have been delivered to the Trustee for cancellation and have been deemed paid; and - - all sums payable by us under the Indenture have been paid. REDEMPTION (SECTIONS 9.02, 9.03 AND 9.04) The terms for the redemption of Debt Securities will be stated in the applicable prospectus supplement. Unless the prospectus supplement states differently and except with respect to Debt Securities redeemable at the option of the Holder, Debt Securities will be redeemable upon notice by mail to each Holder of Debt Securities to be redeemed between 30 and 60 days prior to the redemption date. If less than all of the Debt Securities of any series are to be redeemed, the Trustee will select the Debt Securities to be redeemed pro rata, by lot or by a another method as the Trustee deems fair and appropriate. Debt Securities selected by the Trustee shall be in the amounts of $1,000 or in the minimum principal denomination for the such series of Debt Securities. Any notice of redemption at the option of Conectiv may state that such redemption will be conditional upon receipt by the Paying Agent of monies sufficient to redeem all the Securities called for redemption not later than the opening of business on the redemption date. If such moneys are to be deposited by such date and time, the Trustee shall promptly notify the holders of all Securities called for redemption of such fact and Conectiv shall not be required to redeem such securities. Debt Securities will cease to bear interest on the redemption date. Upon the surrender of your Debt Securities, Conectiv will pay the redemption price plus any premium and accrued interest. If only part of the Debt Securities is redeemed, the Trustee will deliver to you a new Debt Security of the same series for the remaining portion. PLAN OF DISTRIBUTION We may sell the Debt Securities offered under this prospectus through underwriters, agents or dealers or directly to purchasers. UNDERWRITERS Any agents or underwriters will be identified and their compensation (including underwriting discount) will be described in the applicable prospectus supplement. The prospectus supplement will also describe other terms of the offering, including any discounts or concessions allowed or reallowed or paid to dealers and any securities exchanges on which the offered securities may be listed. 13 15 The distribution of Debt Securities under this prospectus may occur from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. AGENTS AND DIRECT SALES If the applicable prospectus supplement indicates, we will authorize dealers or our agents to solicit offers by certain institutions to purchase offered Debt Securities from us pursuant to contracts that provide for payment and delivery on a future date. We must approve all institutions, but they may include, among others: - - commercial and savings banks; - - insurance companies; - - pension funds; - - investment companies; and - - education and charitable institutions. The institutional purchaser's obligations under the contract are subject only to the condition that the purchase of the offered Debt Securities at the time delivery is allowed by any laws that govern the purchaser. The dealers and our agents will not be responsible for the validity or performance of the contracts. GENERAL INFORMATION Underwriters, dealers and agents participating in a sale of Debt Securities may be deemed to be underwriters as defined in the Securities Act, and any discounts and commissions received by them and any profit realized by them on resale of the Debt Securities may be deemed to be underwriting discounts and commissions under the Securities Act. We may have agreements with the agents, underwriters and dealers to indemnify them against certain civil liabilities, including liabilities under the Securities Act, or to contribute with respect to payments which the agents, underwriters or dealers may be required to make as a result of those certain civil liabilities. Unless we indicate differently in a prospectus supplement, we will not list the Debt Securities on any securities exchange. If we sell a security offered under this prospectus to an underwriter for public offering and sale, the underwriter may make a market for that security but is not obligated to do so. Therefore, we cannot give any assurances to you concerning the liquidity of any security offered under this prospectus. Agents and underwriters and their affiliates may be customers of, engage in transactions with, or perform services for us or our subsidiary companies in the ordinary course of business. 14 16 LEGAL MATTERS The validity of the Debt Securities will be passed upon for Conectiv by Peter F. Clark, General Counsel for Conectiv, and for the underwriters or agents by Thelen Reid & Priest LLP, New York, New York. Thelen Reid & Priest, LLP represents Conectiv in connection with certain federal income tax matters. EXPERTS The consolidated balance sheets of Delmarva and its subsidiaries as of December 31, 1997 and 1996, and the related consolidated statements of income, changes in common stockholders' equity and cash flows for each of the three years in the period ended December 31, 1997, incorporated by reference in this Registration Statement, have been incorporated herein in reliance on the report of Coopers & Lybrand L.L.P., independent accountants, as given on the authority of that firm as experts in accounting and auditing. The consolidated financial statements of Atlantic Energy, Inc. and ACE incorporated herein by reference from their respective Annual Reports on Form 10-K for the year ended December 31, 1997 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports, which are incorporated herein by reference, and have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. 15 17 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth those expenses to be incurred by the Conectiv in connection with the issuance and distribution of the Debt Securities being registered, other than underwriting discounts and commissions. All of the amounts shown are estimates, except the applicable Securities and Exchange Commission registration fee. Securities and Exchange Commission Filing Fees......................... $69,500 Printing Expenses...................................................... $30,000* Trustee's Fees and Expenses............................................ $ 5,000 Legal Fees and Expenses................................................ $75,000* Independent Public Accountants' Fees and Expenses...................... $40,000* Rating Agency Fees..................................................... $40,000* Blue Sky Filing Fees and Expenses...................................... $ 7,500* Miscellaneous Expenses................................................. $_______ Total Expenses................................................ $267,000* *Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Conectiv is a Delaware corporation. Under Section 145 of the General Corporation Law of the State of Delaware, the Conectiv has the power to indemnify its directors and officers, subject to certain limitations. The Restated Certificate and Articles of Incorporation of Conectiv provide that Conectiv shall indemnify, to the full extent that it shall have power to do so under applicable law, each director and officer against all costs and liabilities reasonably incurred by or imposed on such persons in connection with any litigation in which such director or officer may be involved by reason of being or having been a director or officer of Conectiv. This provision is not exclusive of other rights to which any director or officer may otherwise be entitled. The Restated Certificate and Articles of Incorporation of Conectiv also provide that, to the extent the Delaware General Corporation Law is amended to authorize further eliminating or limiting the personal liability of directors, the liability of the directors of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law. Subject to certain exceptions, the directors and all corporate officers of Conectiv are insured for not less than $75,000,000 for of any claim or claims that may be made against them, including those claims arising under the Securities Act, and caused by any negligent act, any error, any omission or any breach of II-1 18 duty while acting in their capacities as such directors or officers, and Conectiv is insured to the extent that it shall have indemnified the directors and officers for such loss. The premiums for such director and officer insurance are paid by Conectiv. The foregoing summaries are necessarily subject to the complete text of the statute, certificate of incorporation and insurance policy referred to above and are qualified in their entirety by reference thereto. ITEM 16. EXHIBITS Reference is made to the Exhibit Index filed herein at Page II-5, such Exhibit Index is being incorporated in this Item 16 by reference. ITEM 17. UNDERTAKINGS (a) The undersigned registrant hereby undertakes: 1. To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: i. To include any prospectus required by Section 10(a)(3) of the Securities Act; ii. To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and iii. To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (l)(i) and (l)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement. 2. That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2 19 3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. 4. That, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described under Item 15 above, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted against the Conectiv by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-3 20 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, Conectiv certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Wilmington and State of Delaware on the 12th of February, 1999. CONECTIV By /s/ J.C. VAN RODEN, JR. Name: J.C. van Roden, Jr. Title: Senior Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed on the 12th day of February, 1999 by the following persons in the capacities indicated:
SIGNATURE TITLE --------- ----- /s/ H.E. COSGROVE Chairman of the Board, Chief Executive Officer and - ----------------------- Director (H. E. Cosgrove) (Principal Executive Officer) /s/ J.C. VAN RODEN, JR. Senior Vice President and Chief Financial Officer - ----------------------- (Principal Financial Officer) (J.C. van Roden, Jr.) /s/ J. P. LAVIN Controller - ----------------------- (Principal Accounting Officer) (J. P. Lavin)
M. G. Abercrombie ) R. D. Burris ) A. K. Doberstein ) Directors* M. B. Emery ) S. I. Gore ) C. Holley ) J. L. Jacobs ) R. B. Mc Glynn ) Directors* B. J. Morgan ) W. E. Nellius ) H. Raveche ) * Louis M. Walters, by signing his name hereto on the 12th day of February, 1999, does hereby sign this document pursuant to powers duly executed by the Directors named, filed with the Securities and Exchange Commission on behalf of such Directors, all in the capacities and on the date stated, such persons all being Directors of the Registrant. /s/ Louis M. Walters -------------------- Louis M. Walters, Attorney-in-Fact II-4 21 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT - ------ ---------------------- 1 --- Form of Distribution Agreement (for the offering of Medium-Term Notes) 4(a) --- Form of Indenture between the Company and First Union Trust Company, National Association, Trustee 5 --- Opinion of Peter F. Clark, Esq. (to be filed by amendment) 12 --- Statement of Ratio of Earnings to Fixed Charges (Incorporated by reference to the Company's quarterly report on Form 10-Q for the period ended September 30, 1998) 23 --- Consent of Peter F. Clark, Esq. (Included in Exhibit 5) 23(b) --- Consent of PricewaterhouseCoopers LLP, independent accountants 23(c) --- Consent of Deloitte & Touche LLP, independent auditors 24 --- Powers of Attorney 25 --- Statement of Eligibility of Trustee
II-5 EX-1 2 FORM OF DISTRIBUTION AGREEMENT 1 EXHIBIT 1 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 First Union Trust Company, National Association, 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 and the Administrative Procedure set forth on Annex II hereto. 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 and Exchange Commission (the "Commission") in conformity with the rules, regulations 2 -2- 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" (the prospectus included in the Registration Statement, as such prospectus may have been amended to the date hereof, being hereinafter called the "Basic Prospectus"); the Basic Prospectus, as amended by a prospectus supplement relating to the Securities and the plan of distribution thereof, in the form in which such prospectus supplement most recently has been filed with the Commission pursuant to Rule 424(b) under the Act on or prior to the date of this Agreement, is hereinafter called the "Prospectus"; any reference herein to the Registration Statement, the Basic 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, Basic Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to the Basic 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)(i) The Registration Statement as amended, as of each applicable Effective Date (as hereinafter defined), complied and will comply in all material respects with the applicable provisions of the Act, the Rules and Regulations and the Trust Indenture Act and did not 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 not misleading. 3 -3- (ii) The Prospectus as amended or supplemented, as of each applicable Representation Date (as hereinafter defined), complied and will comply in all material respects with the applicable provisions of the Act and the Trust Indenture Act and did not and will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (iii) The documents which constitute Incorporated Documents as of the date hereof, when they became effective or were filed with the Commission, complied in all material respects with the applicable provisions of the Act, the Rules and Regulations, the Exchange Act, and/or the rules and regulations of the Commission under the Exchange Act, and did not contain an untrue statement of a material fact or (considered together) omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any documents which become Incorporated Documents after the date hereof, when they become effective or are filed with the Commission, as the case may be, will comply in all material respects with the applicable provisions of the Act, the Rules and Regulations, the Exchange Act, and/or the rules and regulations of the Commission under the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (iv) 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. (v) The representations and warranties in this subsection (c) 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. (vi) As used herein, (A) "Effective Date" means the later of the date and time that the Registration Statement or any post-effective amendment thereto became or becomes effective or the date and time thereafter of the filing of the Company's most recent Annual Report on Form 10-K, and (B) Representation Date means each of (I) the Commencement Date, (II) each Solicitation Time (as defined in Section 6), (III) the time of each acceptance of an offer to purchase Securities hereunder, (IV) the time of the related issuance, sale and delivery of such Securities pursuant to each such accepted offer, (V) the time of the execution and delivery of each Terms Agreement and (VI) the related Time of Delivery (as defined in Section 2) under each such Terms Agreement. 4 -4- (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. (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 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) Since the respective dates as of which information contained in the Prospectus as amended or supplemented is given, and except as set forth therein or contemplated thereby, there has not been any material adverse change in, or any adverse development which materially affects, the business, properties, financial condition, results of operations or business prospects of the Company and its consolidated subsidiaries taken as a whole. (i) The Company has an authorized capitalization as set forth in the financial statements incorporated by reference in the Prospectus, and all of the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable. 5 -5- (j) The financial statements included in the Registration Statement present fairly the financial position of the Company and its consolidated subsidiaries, as the case may be, as at the dates indicated and the results of their operations for the periods specified; and, except as otherwise stated in the Registration Statement, such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis during the periods involved and the supporting financial schedules included in the Registration Statement present fairly the information required to be stated therein. PricewaterhouseCoopers LLP and Deloitte & Touche LLP, the accountants who certified certain of such financial statements and financial schedules, are independent certified public accountants as required by the Act. (k) The Securities have been duly authorized, and, when issued and delivered pursuant to this Agreement and any Terms Agreement, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture; the Indenture has been duly authorized and constitutes a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general principles of equity; and the Indenture conforms and the Securities of any particular tranche will conform to the descriptions thereof in the Prospectus as amended or supplemented to relate to such tranche of Securities. (l) Each of the Company's direct and indirect subsidiaries has been duly incorporated, is validly existing and is in good standing under the laws of its jurisdiction of incorporation, and is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which its ownership of properties or the conduct of its business requires such qualification, except where the failure to be so qualified would not have a material adverse effect on the Company and its subsidiaries, taken as a whole, and has the corporate power and authority necessary to own or hold its respective properties and to conduct the businesses in which it is engaged. (m) The Company directly or indirectly has good and marketable title to all of the common stock of its direct and indirect subsidiaries which the Registration Statement and Prospectus disclose as being owned by it, free and clear of all liens and encumbrances, except such as do not materially affect the value thereof, and the common stock of each of such subsidiaries has been duly and validly issued and is fully paid and nonassessable. (n) Other than as set forth in or contemplated by the Prospectus as amended or supplemented, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or to which any property of the Company or any of its subsidiaries is a party or to which any property of the Company or any of its subsidiaries is subject, which, if determined adversely to the 6 -6- Company or any of its subsidiaries, would individually or in the aggregate have a material adverse effect on the consolidated financial position, stockholders' equity or results of operations of the Company and its subsidiaries, and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. (o) 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. (p) 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. (q) 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 reasonable 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. 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 7 -7- 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 reject any offer to purchase Securities, in whole or in part. Each Agent may, in its discretion reasonably exercised, reject any offer received by it to purchase Securities, in whole or in part. 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 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 8 -8- 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, 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 of Thelen Reid & Priest LLP 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"). 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 9 -9- 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 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 10 -10- 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 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, each execution and delivery by the Company of a Terms Agreement and each issuance, sale and delivery by the Company of Securities hereunder or 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 or the date of the issuance, sale and delivery of Securities pursuant to such accepted offer, or the date of such Terms Agreement or the Time of Delivery thereunder, 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 11 -11- Registration Statement and the Prospectus as amended and supplemented relating to such Securities); (h) The Company shall timely furnish or use all reasonable efforts to cause to be furnished all the opinions of counsel, letters of accountants and officers' certificates specified in Section 6 and shall prepare and furnish such papers and information as shall be reasonably requested in connection herewith. 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 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. The obligation of any Agent, as agent of the Company, at any time ("Solicitation Time") to solicit offers to purchase the Securities, the obligation of any offeree to purchase Securities pursuant to an accepted offer or the obligation 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 other applicable Representation Date that is on or prior to such Solicitation Time, the date of such purchase or 12 -12- the Time of Delivery under such Terms Agreement, as the case may be, and at and as of such Solicitation Time, the date of such purchase or such Time of Delivery, as the case may be, the condition that at or prior to such time the Company shall have performed all of its obligations hereunder (or under any applicable Terms Agreement) theretofore to be performed, and the following additional conditions: (a) (i) The Prospectus as then 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 (if and to the extent such filing is required) within the applicable time period prescribed for such filing by the Rules and Regulations 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 such matters as shall have been reasonably requested by the Agents and (ii) if and to the extent requested by such Agent, on each date (on or prior to such Solicitation Time, the date of such purchase pursuant to an accepted offer or the Time of Delivery under such Terms Agreement, as the case may be) on which (A) the Registration Statement or the Prospectus is amended or supplemented (other than by a Pricing Supplement) or (B) a document is filed under the Act or the Exchange Act and is incorporated by reference into the Prospectus or (C) the Company sells Securities under a Terms Agreement which specifies a condition under this subsection, 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 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 referred to in subsection (b) above, in form and substance satisfactory to such Agent and the Company to the effect set forth in Annex III hereto; (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 13 -13- Commencement Date and each applicable date referred to in subsection (b) above, in form and substance satisfactory to such Agent to the effect set forth in Annex IV hereto; (e) 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 referred to in subsection (b) above (read to refer to this subsection) 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), (f) and (g) of this Section 6, and as to such other matters as such Agent may reasonably request. (f) Since the respective dates as of which information in the Prospectus as amended or supplemented to such Solicitation Time, the date of such acceptance or the date of such Terms Agreement, as the case may be, is given, and except as set forth therein or contemplated thereby, there shall not have been any change in, or any development which affects, the business, properties, financial condition, results of operations or business prospects of the Company and its consolidated subsidiaries, taken as a whole, which, in the reasonable judgment of such Agent, is material and adverse and which, in the reasonable judgment of such Agent, makes it impracticable or inadvisable to proceed with the solicitation of offers to purchase the Securities or to proceed with the purchase of Securities pursuant to such accepted offer or such Terms Agreement. (g) Unless known to such Agent prior to such Solicitation Time, the date of such acceptance or the date of such Terms Agreement, as the case may be, there shall not have occurred: (i) 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 reasonable 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 reasonable 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, the date of such acceptance or Time of Delivery, as the case may be; or 14 -14- (ii) 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. 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 the Registration Statement any Preliminary Prospectus, the Basic 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 shall not inure to the benefit of any Agent on account of any such losses, claims, damages or liabilities (or actions in respect thereof) arising from the sale of the Securities by or through such Agent to any person if a copy of the Prospectus as it then may be amended or supplemented (exclusive of the Incorporated Documents) shall not have been given or sent to such person by such Agent with or prior to the written confirmation of the sale involved to the extent that (i) the Prospectus as so amended or supplemented would have cured the defect in such document giving rise to such losses, claims, damages or liabilities, (ii) sufficient quantities of the Prospectus as so amended or supplemented were timely made available to such Agent and (iii) such Agent shall not have reasonably objected to such amendment or supplement pursuant to Section 4(a) hereof. (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 15 -15- 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 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. 16 -16- (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 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. 17 -17- (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. 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 18 -18- 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. 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. 19 -19- 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:________________________ 20 -20- 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. 21 -21- 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:________________________ 22 -22- 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).] [(2) The opinion of counsel to the Company referred to in Section 6(c).] 23 -23- [(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): 24 -24- 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. The Company will have the sole right to accept offers to purchase Securities and may reject any such offer in whole or in part. 25 -25- 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; (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. 26 -26- 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 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 27 -27- 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. 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). 28 -28- 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. 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 29 -29- 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 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 30 -30- 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. 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. EX-4.(A) 3 FORM OF INDENTURE / COMPANY & FIRST UNION TRUST CO 1 EXHIBIT 4(a) CONECTIV Senior Debt Securities INDENTURE Dated as of _________, 1999 First Union Trust Company, National Association Trustee 2 CROSS-REFERENCE TABLE CONECTIV AND FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, TRUSTEE INDENTURE DATED ___________, 1999
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 ..................................... 5 ARTICLE 2 The Securities SECTION 2.01. Amount; Issuable in Series ................................ 6 SECTION 2.02. Denominations ............................................. 9 SECTION 2.03. Execution, Authentication and Delivery .................... 9 SECTION 2.04. Temporary Securities ...................................... 10 SECTION 2.05. Registrar and Paying Agent ................................ 11 SECTION 2.06. Paying Agent to Hold Money in Trust ....................... 12 SECTION 2.07. Securityholder Lists ...................................... 12 SECTION 2.08. Transfer and Exchange ..................................... 13 SECTION 2.09. Mutilated, Destroyed, Lost or Stolen Securities ........... 14 SECTION 2.10. Outstanding Securities .................................... 14 SECTION 2.11. Cancellation .............................................. 15 SECTION 2.12. Default Interest .......................................... 15 SECTION 2.13. Computation of Interest ................................... 16 ARTICLE 3 Covenants SECTION 3.01. Payment of Securities ..................................... 16 SECTION 3.02. SEC Reports ............................................... 16 SECTION 3.03. Compliance Certificate .................................... 16
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Page ---- ARTICLE 4 Successor Company SECTION 4.01. When Company May Merge or Transfer Assets ................. 17 SECTION 4.02. Successor Entity Substituted .............................. 17 SECTION 4.03. Limitation ................................................ 17 ARTICLE 5 Defaults and Remedies SECTION 5.01. Events of Default ......................................... 18 SECTION 5.02. Acceleration .............................................. 19 SECTION 5.03. Other Remedies ............................................ 19 SECTION 5.04. Waiver of Past Defaults ................................... 19 SECTION 5.05. Control by Majority ....................................... 20 SECTION 5.06. Limitation on Suits ....................................... 20 SECTION 5.07. Rights of Holders To Receive Payment ...................... 20 SECTION 5.08. Collection Suit by Trustee ................................ 21 SECTION 5.09. Trustee May File Proofs of Claim .......................... 21 SECTION 5.10. Priorities ................................................ 21 SECTION 5.11. Undertaking for Costs ..................................... 22 SECTION 5.12. Waiver of Stay or Extension Laws .......................... 22 ARTICLE 6 Trustee SECTION 6.01. Duties of Trustee ......................................... 22 SECTION 6.02. Rights of Trustee ......................................... 23 SECTION 6.03. Individual Rights of Trustee .............................. 24 SECTION 6.04. Trustee's Disclaimer ...................................... 24 SECTION 6.05. Notice of Defaults ........................................ 24 SECTION 6.06. Reports by Trustee to Holders ............................. 25 SECTION 6.07. Compensation and Indemnity ................................ 25 SECTION 6.08. Replacement of Trustee .................................... 26 SECTION 6.09. Successor Trustee by Merger ............................... 27 SECTION 6.10. Eligibility; Disqualification ............................. 27 SECTION 6.11. Preferential Collection of Claims Against Company ......... 27
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Page ---- ARTICLE 7 Discharge of Securities and Indenture SECTION 7.01. Satisfaction and Discharge of Securities .................. 27 SECTION 7.02. Satisfaction and Discharge of Indenture ................... 30 SECTION 7.03. Application of Trust Money ................................ 31 ARTICLE 8 Amendments SECTION 8.01. Without Consent of Holders ................................ 31 SECTION 8.02. With Consent of Holders ................................... 32 SECTION 8.03. Compliance with Trust Indenture Act ....................... 33 SECTION 8.04. Revocation and Effect of Consent and Waivers .............. 33 SECTION 8.05. Notation on or Exchange of Securities ..................... 34 SECTION 8.06. Trustee To Sign Amendments ................................ 34 ARTICLE 9 Redemption SECTION 9.01. Applicability ............................................. 34 SECTION 9.02. Notice to Trustee ......................................... 34 SECTION 9.03. Selection of Securities To Be Redeemed .................... 35 SECTION 9.04. Notice of Redemption ...................................... 35 SECTION 9.05. Effect of Notice of Redemption ............................ 36 SECTION 9.06. Deposit of Redemption Price ............................... 36 SECTION 9.07. Securities Redeemed in Part ............................... 36 ARTICLE 10 Sinking Funds SECTION 10.01. Applicability ............................................ 37 SECTION 10.02. Satisfaction of Sinking Fund Payment with Securities ..... 37 SECTION 10.03. Redemption of Securities for Sinking Fund ................ 38
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Page ---- ARTICLE 11 Meetings of Holders; Actions without Meeting SECTION 11.01. Purposes for Which Meetings May Be Called ................ 38 SECTION 11.02. Call, Notice and Place of Meetings ....................... 38 SECTION 11.03. Persons Entitled to Vote at Meetings ..................... 39 SECTION 11.04. Quorum; Action ........................................... 39 SECTION 11.05. Attendance at Meeting; Determination of Voting Rights; Conduct and Adjournment of Meetings ...................... 40 SECTION 11.06. Counting Votes and Recording Action of Meetings .......... 41 SECTION 11.07. Action without Meeting ................................... 42 ARTICLE 12 Miscellaneous SECTION 12.01. Trust Indenture Act Controls ............................. 42 SECTION 12.02. Notices .................................................. 42 SECTION 12.03. Communication by Holders with Other Holders .............. 43 SECTION 12.04 Acts of Holders .......................................... 43 SECTION 12.05. Certificate and Opinion as to Conditions Precedent ....... 45 SECTION 12.06. Statements Required in Certificate or Opinion ............ 45 SECTION 12.07. When Securities Disregarded .............................. 45 SECTION 12.08. Rules by Trustee, Paying Agent and Registrar ............. 46 SECTION 12.09. Legal Holidays ........................................... 46 SECTION 12.10. Governing Law ............................................ 46 SECTION 12.11. No Recourse Against Others ............................... 46 SECTION 12.12. Successors ............................................... 46 SECTION 12.13. Multiple Originals ....................................... 46 SECTION 12.14. Table of Contents; Headings .............................. 47 SECTION 12.15 Separability Clause ...................................... 47 TESTIMONIUM ...................................................................... 47 EXECUTION ........................................................................ 47 ACKNOWLEDGMENTS .................................................................. 47
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 First Union Trust Company, national banking association, a National Association organized and existing under the laws of the United States of America (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. "Bankruptcy Law" means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. "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. 8 "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. "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. "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. "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. "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. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Holder" or "Securityholder" means the person in whose name a Security is registered in the Security Register. "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 2 9 Assistant Controller, or any officer, agent or attorney-in-fact of the Company designated by Board Resolution or the Bylaws or named in an Officer's Certificate. "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. "Placement of Payment" when used with respect to the Securities of any series, or any Tranche thereof, means the place or places, specified as contemplated by Section 2.01, at which principal of and premium, if any, and interest, if any, on the Securities of such series payable. "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 any unsecured debentures, notes or other evidences of indebtedness 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. 3 10 "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. SECTION 1.02. Other Definitions
Defined in Term .................................................. Section - --------------- ------- "Act" ............................................................ 12.04 "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 "Security Register" .............................................. 2.05 "Security 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. 4 11 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 in the United States as in effect from time to time provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States at the date of such computation or, at the election of the Company from time to time, at the date of the execution and delivery of this Indenture; provided, however, that in determining generally accepted accounting principles applicable to the Company, effect shall be given, to the extent required, to any order, rule or regulation of any administrative agency, regulatory authority or other governmental body having jurisdiction over the Company; (3) any term used herein without definition which is defined in the Uniform Commercial Code as in effect in any jurisdiction in which any property of the Company is located shall have the meanings assigned to it therein with respect to such property; (4) "including" means including, without limitation; (5) "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. (6) "or" is not exclusive; (7) the words "herein," hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; (8) words in the singular include the plural and words in the plural include the singular; and (9) 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 Securities. 5 12 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; (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 6 13 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, to be in effect so long as any Securities of the series remain outstanding; (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) and the formulary or other method or other means by which the equivalent or any such amount in U.S. dollars is to be determined for any purpose, including for the purpose of determining the principal amount of such Securities deemed to be outstanding as any time; (12) if the principal of or premium, if any, or interest, if any, on the Securities of such series, are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than that in which the Securities are stated to be payable, the period or periods within which, and the terms and conditions upon which, such election may be made; (13) if the principal of or premium, if any, or interest, if any, on the Securities of such series, are to be payable, or are to be payable at the election of the Company or a Holder thereof, in securities or other property, the type and amount of such securities or other property, or the formulary or other method or other means by which such amount shall be determined, and the period or periods within which, and the terms and conditions upon which, any such election may be made; (14) if the amount payable in respect of the principal of or premium, if any, or interest, if any, on the Securities of such series, may be determined with reference to an index or other fact or event ascertainable outside of this Indenture, the manner in which such amounts shall be determined (to the extent not established pursuant to clause (4) of this paragraph); (15) the forms of the Securities of the series; 7 14 (16) any exceptions to Section 12.09 or variation in the definition of Business Day, with respect to the Securities of such series, except any variations which would eliminate reference to Delaware and North Carolina in Section 12.09; (17) 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; (18) if Securities of the series are to be convertible into other securities, the Terms of such conversion; and (19) any other Terms of any of the Securities of the series; provided, however, that any provision in any such Board Resolution, supplemental indenture, or Officer's Certificate, or in or pursuant to any Company Order in accordance with Section 2.03, that affects any right, power, authority, duty, benefit, protection, privilege, immunity, or indemnity of the Trustee shall not be binding on the Trustee unless the Trustee shall have consented thereto in writing (such consent not to be unreasonably delayed or withheld); All Securities of any one series shall be substantially identical except as to denomination and other terms as provided in or pursuant to the Board Resolution or supplemental indenture or the Officer's Certificate referred to above, or the Company Order contemplated by the fourth paragraph of Section 2.03. 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. 8 15 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. 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 executed on behalf of the Company by an Officer, together with the instrument or instruments establishing the form or forms and Terms of such series and 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 as permitted by Section 2.01, or the fourth paragraph of Section 2.03 prior to and as a condition to, 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: 9 16 (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, as to enforceability, to such exceptions with respect to laws or principles of equity relating to or affecting generally the enforcement of creditors' rights. 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, powers, authority, benefits, protections, privileges, indemnities 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 second 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, Board Resolution or supplemental indenture otherwise required pursuant to Section 2.01 or the Company Order otherwise required pursuant to the third preceding paragraph, or the Opinion of Counsel otherwise required pursuant to such second 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, in lieu of the opinion described in (b) above, the Opinion of Counsel may state: (a) when the Terms of such Securities shall have been established pursuant to a Company Order or Orders or pursuant to such procedures as may be specified from time to time by a Company Order or Orders, all as contemplated by and in accordance with the instrument or instruments delivered to the Trustee as required by the procedures set forth above, such terms will have been duly authorized by the Company and will have been established in conformity with the provisions of the Indenture; and (b) when such Securities shall have been authenticated and delivered by the Trustee in accordance with this Indenture and the Company Order or Orders or the specified procedures referred to in paragraph (a) above and issued and delivered by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, such Securities will constitute valid obligations of the Company, entitled to the benefits provided by the 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 10 17 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. Except as otherwise specified as contemplated by Section 2.01 in the Terms of the Securities of any series, 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 upon Company Order 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. SECTION 2.05. Registrar and Paying Agent The Company shall cause to be kept in an office or agency, with respect to the Securities of each series, a register (all registers kept in accordance with this Section being collectively referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities of such series and the registration of transfers and exchanges thereof. The Company shall designate one Person to maintain the Security Register for the Securities of each series, and such Person is referred to herein, with respect to such series, as the "Security Registrar." Anything herein to the contrary notwithstanding, the Company may designate one or more of its offices as an office in which a Security Register with respect to the Securities of one or more series shall be maintained, and the Company may designate itself the Security Registrar with respect to one or more of such series. The Security Register shall be open for inspection by the Trustee and the Company at all reasonable times. The Company shall also maintain an office or agency where Securities may be presented for payment (the "Paying Agent"). The Company initially appoints the Trustee as Registrar and Paying Agent in connection with the Securities. All rights, benefits, privileges, protections, immunities and indemnities of the Trustee shall apply to Trustee in its capacity as Security Registrar and Paying Agent. 11 18 SECTION 2.06. Paying Agent To Hold Money in Trust On or prior to each due date of the Principal Amount 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 Company or 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 the Principal Amount on the Securities and shall notify the Trustee of any default by the Company (or any other obligator on such Securities) 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. Subject to applicable laws, 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 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 Semiannually, not later than June 30 and December 31 in each year, commencing June 30, 1999, and within 30 days of such other times as the Trustee may request in writing, the Company shall furnish or cause to be furnished to the Trustee information as to the names and addresses of the Holders, as of a date no more than fifteen (15) days prior to the date such information is so furnished, and the Trustee shall preserve such information and similar information received by it in any other capacity and afford to the Holders access to information so preserved by it, all to such extent, if any, and in such manner as shall be required by the TIA; provided, however, that no such list need be furnished so long as the Trustee shall be the Security Registrar. 12 19 SECTION 2.08. Transfer and Exchange Except as otherwise specified as contemplated by Section 2.01 or the fourth paragraph of Section 2.03 with respect to the Securities of any series, upon presentment for registration of transfer of any Security at the office or agency of the Company in a Place of Payment for such series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of authorized denominations and of like tenor and aggregate principal amount. Except as otherwise specified as contemplated by Section 2.01 with respect to the Securities of any series, any Security of such series may be exchanged at the option of the Holder, for one or more new Securities of the same series, of authorized denominations and of like tenor and aggregate principal amount, upon presentment of the Securities to be exchanged at any such office or agency. Whenever any Securities are so presented for exchange, the Company shall execute, and the Trustee upon Company Order shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. All Securities delivered upon any registration of transfer or exchange of Securities shall be valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented for registration of transfer or for exchange shall (if so required of the Company, the Trustee or the Security Registrar) be duly endorsed or shall be accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee or the Security Registrar, as the case may be, duly executed by the Holder thereof or his attorney duly authorized in writing. Unless otherwise specified as contemplated by Section 2.01 or the fourth paragraph of Section 2.03 in the Terms of Securities of any series, no service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration or transfer or exchange of Securities, other than exchanges pursuant to Section 2.04 or 9.07 not involving any transfer. The Company shall not be required to execute or to provide for the registration of transfer of or the exchange of (a) Securities of any series during a period of 15 days immediately preceding the date of the mailing of any notice of redemption of such Securities called for redemption or (b) any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. 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 13 20 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. Mutilated, Destroyed, Lost and Stolen Securities If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee upon Company Order shall authenticate and deliver in exchange therefor a new Security of the same series, and of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and the Trustee (a) evidence to their satisfaction of the ownership of and the destruction, loss or theft of any Security and (b) such security or indemnity as may be reasonably required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security is held by a person purporting to be the owner of such Security, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and Tranche, and of like tenor and principal amount and bearing a number not contemporaneously outstanding. Notwithstanding the foregoing, in case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, but subject to compliance with the foregoing conditions, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Securities shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone other than the Holder of such new Security, and any such new Security shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of such series duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. 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 14 21 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. 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 a 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 Security 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. 15 22 SECTION 2.13. Computation of Interest Except as otherwise specified, as contemplated by Section 2.01 or the fourth paragraph of Section 2.03 in the Terms of 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. 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. 16 23 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: (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, 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, 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, the predecessor entity shall be relieved of all obligations and covenants under this Indenture and the Securities. SECTION 4.03. Limitation Nothing in this Indenture shall be deemed to prevent or restrict: (a) any consolidation or merger after the consummation of which the Company would be the surviving or resulting entity or any conveyance or other transfer, or lease of any part of the properties of the Company which does not constitute the entirety, or substantially the entirety, thereof; or (b) the approval by the Company of, or the consent by the Company to, any consolidation or merger to which any Subsidiary (or any other subsidiary or affiliate of the Company) may be a party or any conveyance, transfer or lease by any Subsidiary (or any such other subsidiary or affiliate) of any of its assets. 17 24 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 30 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; (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. 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 18 25 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 Discount Securities, such portion of the principal amount as may be specified in the terms of such Securities) and accrued interest on all 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 19 26 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. 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, in the case of redemption, on the redemption 20 27 date), 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 to collect and receive any money or other property payable or deliverable on any such claims and to distribute the same and, unless 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. 21 28 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. 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. 22 29 (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 the Trustee, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (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. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. 23 30 (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. 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 a responsible officer of 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. For purposes of this Indenture, a "responsible officer" of the Trustee is an officer in the Trustee's office at the address set forth in Section 12.02 who has direct responsibility for the administration of this Indenture and the performance of the Trustee's duties hereunder. 24 31 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 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 or the exercise of its rights 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 and the resignation or removal of the Trustee. 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. 25 32 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. 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 payment of all amounts owing to it in its individual capacity and 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. 26 33 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 person or banking association, the resulting, surviving or transferee person or banking association 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 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). 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. For purposes of Section 311(b) of the TIA (a) the term "cash transaction" shall have the meaning provided in Rule 116-4 under the TIA, and (b) the term "self-liquidating paper" shall have the meaning provided in Rule 116-6 under the TIA. 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 (other than the Company), 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 27 34 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 the Trustee 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; (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) and, if applicable, (c) 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 as contemplated by Section 2.01 or the fourth paragraph of Section 203, but the indebtedness of the Company in respect of such securities or portions thereof shall 28 35 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. 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 2.04, 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, (i) 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 Bankruptcy Law, (ii) are unable to apply any money held by the Trustee as provided in this Section and Section 7.03 with respect to such Security by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, 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. 29 36 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, upon Company Request 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; 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 reasonably 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 2.04, 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 upon Company Order delivered with such instruments, such instruments as, in the judgment of the Company, shall be necessary, desirable or appropriate to effect and 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 30 37 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 7.01 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 to 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. ARTICLE 8 AMENDMENTS SECTION 8.01. Without Consent of Holders The Company and the Trustee may amend and/or supplement 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 to 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. 31 38 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. SECTION 8.02. With Consent of Holders The Company and the Trustee may amend and/or supplement 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 32 39 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 other Securities of such 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 some, but not all 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. 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. 33 40 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 upon Company Order 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 or supplement authorized pursuant to this Article 8 if the amendment does not adversely affect the rights, duties, liabilities, benefits, protections, privileges, indemnities 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. 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). 34 41 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. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. 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. 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. 35 42 (c) If at the time of any notice of redemption the Company shall not have deposited or caused to be deposited with the Paying Agent moneys sufficient to redeem all the Securities called for redemption, such notice shall state that it is subject to the deposit of the redemption moneys with the Paying Agent 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 Securities called for redemption of such fact and the Company shall not be required to redeem such Securities. 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. 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, subject to any conditions stated in the notice of redemption, 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 upon Company Order 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. 36 43 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 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. 37 44 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. 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 County of New Castle, The City of Wilmington, 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 the outstanding Securities of all such series, considered as one 38 45 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 meeting 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 County of New Castle, The City of Wilmington, 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. (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 or the terms of any series of Securities 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 39 46 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. Except as limited by Section 8.02, 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 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 (except as provided in Section 12.04(g)) 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, 40 47 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. (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 or by proxy; 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 of 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 41 48 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. 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: First Union Trust Company, National Association One Rodney Square 920 King Street Wilmington, DE 19801 Attention: Corporate Trust Administration 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 Security Register and shall be sufficiently given if so mailed within the time prescribed. 42 49 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). 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 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 1.06. (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 Security Register maintained by the Security Registrar. 43 50 (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. (e) Until such time as written instruments or the record described in Section 12.04(a) or both 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 upon Company Order 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 for that purchase the Securities will be computed as of the record date) 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. 44 51 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 (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 any other obligor upon the Securities or by any Affiliate of the Company (unless the Company, such obligor or such Affiliate owns all Securities outstanding under the Indenture, or all outstanding Securities of each such series determined without regard to this Section) 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 a responsible officer of the Trustee knows are so owned shall be so disregarded provided, however, that Securities so owned which have been pledged in good faith may be regarded as outstanding if it is established to the reasonable satisfaction of the Trustee that the pledgee, and not the 45 52 Company, any such other obligor or Affiliate or such other obligor, has the right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor. 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 Security Registrar and the Paying Agent may make reasonable rules for their functions. 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, the State of Delaware, or the State of North Carolina. 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. 46 53 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. SECTION 12.15 Separability Clause In case any provision in this Indenture or the Securities shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 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: FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, AS TRUSTEE Attest: by Title: Title: 47 54 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 48 55 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 49 56 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 or agency of ____________, Trustee under the Indenture referred to on the reverse hereof, or its successor as such Trustee, in the County of New Castle, the City of Wilmington, 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 or agency 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. 50 57 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 51 58 [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.] 52 59 [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 or agency of the Trustee in said County of New Castle, 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. 53 60 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 or agency of __________, Trustee under the Indenture referred to on the reverse hereof, or its successor as such Trustee, in the County of New Castle, the City of Wilmington, 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 or agency 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 _____ 54 61 or __________ to which interest has been paid or, if no interest has been paid, from __________. 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. 55 62 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 56 63 [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.] 57 64 [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 or agency of the Trustee in said County of New Castle, 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. 58 EX-23.(B) 4 CONSENT OF PRICEWATERHOUSECOOPERS LLP 1 EXHIBIT 23(b) CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this Registration Statement of Conectiv on Form S-3 of our report dated February 6, 1998, except as to the information presented in Note 4 under Merger with Atlantic Energy, Inc., for which the effective date of the merger is March 1, 1998, on our audits of the consolidated financial statements of Delmarva Power & Light Company and Subsidiary Companies as of December 31, 1997 and 1996 and for each of the three years in the period ended December 31, 1997, which is included in the 1997 Annual Report on Form 10-K of Delmarva Power & Light Company. We also consent to the reference to our Firm under the caption "Experts" /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP 2400 Eleven Penn Center Philadelphia, Pa 19103 February 9, 1999 EX-23.(C) 5 CONSENT OF DELOITTE & TOUCHE LLP 1 EXHIBIT 23(c) INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Conectiv on Form S-3 of our report dated February 2, 1998 (March 1, 1998 as to Note 4), appearing in the combined Annual Report on Form 10-K of Atlantic Energy, Inc. and Atlantic City Electric Company for the year ended December 31, 1997 and to the reference to us under the heading "Experts" in this Registration Statement. /s/ DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP Parsippany, New Jersey February 9, 1999 EX-24 6 POWERS OF ATTORNEY 1 EXHIBIT 24 CONECTIV LIMITED POWER OF ATTORNEY The undersigned, a director or officer of Conectiv, a Delaware corporation, does hereby appoint H. E. COSGROVE, B. S. GRAHAM and L. M. WALTERS and each of them (with power to act without the other), including full power of substitution and revocation, as the undersigned's true and lawful attorneys-in-fact and agents, with full power and authority to act in all capacities for him/her and in his/her name, place and stead in connection with the filing with the Securities and Exchange Commission, pursuant to the Securities Act of 1933, as amended, of a Registration Statement on Form S-3, and any and all amendments thereto, for up to $500 million of a combination of shares of Company Common Stock, $.01 par value per share, and/or debt securities, which shall consist of unsecured medium term notes or unsecured debentures, and execute and deliver for the undersigned and in his/her name, place and stead all such other documents or instruments and to take such further action as they, or any of them, deem appropriate. The undersigned hereby grants to each such attorney-in-fact full power and authority to take any and all actions requisite, necessary or proper in the exercise of any of the rights and power granted herein, as fully as the undersigned could do if personally present, and hereby ratifies and confirms all that any such attorney-in-fact lawfully does or causes to be done by virtue of this Limited Power of Attorney and the rights and powers granted herein. The undersigned agrees that this Limited Power of Attorney shall survive the incapacity or disability of the undersigned. IN WITNESS WHEREOF, the undersigned has executed this document as of this 29th day of October, 1998. /s/ M. G. ABERCROMBIE ------------------------------ M. G. Abercrombie 2 CONECTIV LIMITED POWER OF ATTORNEY The undersigned, a director or officer of Conectiv, a Delaware corporation, does hereby appoint H. E. COSGROVE, B. S. GRAHAM and L. M. WALTERS and each of them (with power to act without the other), including full power of substitution and revocation, as the undersigned's true and lawful attorneys-in-fact and agents, with full power and authority to act in all capacities for him/her and in his/her name, place and stead in connection with the filing with the Securities and Exchange Commission, pursuant to the Securities Act of 1933, as amended, of a Registration Statement on Form S-3, and any and all amendments thereto, for up to $500 million of a combination of shares of Company Common Stock, $.01 par value per share, and/or debt securities, which shall consist of unsecured medium term notes or unsecured debentures, and execute and deliver for the undersigned and in his/her name, place and stead all such other documents or instruments and to take such further action as they, or any of them, deem appropriate. The undersigned hereby grants to each such attorney-in-fact full power and authority to take any and all actions requisite, necessary or proper in the exercise of any of the rights and power granted herein, as fully as the undersigned could do if personally present, and hereby ratifies and confirms all that any such attorney-in-fact lawfully does or causes to be done by virtue of this Limited Power of Attorney and the rights and powers granted herein. The undersigned agrees that this Limited Power of Attorney shall survive the incapacity or disability of the undersigned. IN WITNESS WHEREOF, the undersigned has executed this document as of this 29th day of October, 1998. /s/ R. D. BURRIS ------------------------------ R. D. Burris 3 CONECTIV LIMITED POWER OF ATTORNEY The undersigned, a director or officer of Conectiv, a Delaware corporation, does hereby appoint H. E. COSGROVE, B. S. GRAHAM and L. M. WALTERS and each of them (with power to act without the other), including full power of substitution and revocation, as the undersigned's true and lawful attorneys-in-fact and agents, with full power and authority to act in all capacities for him/her and in his/her name, place and stead in connection with the filing with the Securities and Exchange Commission, pursuant to the Securities Act of 1933, as amended, of a Registration Statement on Form S-3, and any and all amendments thereto, for up to $500 million of a combination of shares of Company Common Stock, $.01 par value per share, and/or debt securities, which shall consist of unsecured medium term notes or unsecured debentures, and execute and deliver for the undersigned and in his/her name, place and stead all such other documents or instruments and to take such further action as they, or any of them, deem appropriate. The undersigned hereby grants to each such attorney-in-fact full power and authority to take any and all actions requisite, necessary or proper in the exercise of any of the rights and power granted herein, as fully as the undersigned could do if personally present, and hereby ratifies and confirms all that any such attorney-in-fact lawfully does or causes to be done by virtue of this Limited Power of Attorney and the rights and powers granted herein. The undersigned agrees that this Limited Power of Attorney shall survive the incapacity or disability of the undersigned. IN WITNESS WHEREOF, the undersigned has executed this document as of this 29th day of October, 1998. /s/ A. K. DOBERSTEIN ------------------------------ A. K. Doberstein 4 CONECTIV LIMITED POWER OF ATTORNEY The undersigned, a director or officer of Conectiv, a Delaware corporation, does hereby appoint H. E. COSGROVE, B. S. GRAHAM and L. M. WALTERS and each of them (with power to act without the other), including full power of substitution and revocation, as the undersigned's true and lawful attorneys-in-fact and agents, with full power and authority to act in all capacities for him/her and in his/her name, place and stead in connection with the filing with the Securities and Exchange Commission, pursuant to the Securities Act of 1933, as amended, of a Registration Statement on Form S-3, and any and all amendments thereto, for up to $500 million of a combination of shares of Company Common Stock, $.01 par value per share, and/or debt securities, which shall consist of unsecured medium term notes or unsecured debentures, and execute and deliver for the undersigned and in his/her name, place and stead all such other documents or instruments and to take such further action as they, or any of them, deem appropriate. The undersigned hereby grants to each such attorney-in-fact full power and authority to take any and all actions requisite, necessary or proper in the exercise of any of the rights and power granted herein, as fully as the undersigned could do if personally present, and hereby ratifies and confirms all that any such attorney-in-fact lawfully does or causes to be done by virtue of this Limited Power of Attorney and the rights and powers granted herein. The undersigned agrees that this Limited Power of Attorney shall survive the incapacity or disability of the undersigned. IN WITNESS WHEREOF, the undersigned has executed this document as of this 29th day of October, 1998. /s/ M. B. EMERY ------------------------------ M. B. Emery 5 CONECTIV LIMITED POWER OF ATTORNEY The undersigned, a director or officer of Conectiv, a Delaware corporation, does hereby appoint H. E. COSGROVE, B. S. GRAHAM and L. M. WALTERS and each of them (with power to act without the other), including full power of substitution and revocation, as the undersigned's true and lawful attorneys-in-fact and agents, with full power and authority to act in all capacities for him/her and in his/her name, place and stead in connection with the filing with the Securities and Exchange Commission, pursuant to the Securities Act of 1933, as amended, of a Registration Statement on Form S-3, and any and all amendments thereto, for up to $500 million of a combination of shares of Company Common Stock, $.01 par value per share, and/or debt securities, which shall consist of unsecured medium term notes or unsecured debentures, and execute and deliver for the undersigned and in his/her name, place and stead all such other documents or instruments and to take such further action as they, or any of them, deem appropriate. The undersigned hereby grants to each such attorney-in-fact full power and authority to take any and all actions requisite, necessary or proper in the exercise of any of the rights and power granted herein, as fully as the undersigned could do if personally present, and hereby ratifies and confirms all that any such attorney-in-fact lawfully does or causes to be done by virtue of this Limited Power of Attorney and the rights and powers granted herein. The undersigned agrees that this Limited Power of Attorney shall survive the incapacity or disability of the undersigned. IN WITNESS WHEREOF, the undersigned has executed this document as of this 29th day of October, 1998. /s/ S. I. GORE ------------------------------ S. I. Gore 6 CONECTIV LIMITED POWER OF ATTORNEY The undersigned, a director or officer of Conectiv, a Delaware corporation, does hereby appoint H. E. COSGROVE, B. S. GRAHAM and L. M. WALTERS and each of them (with power to act without the other), including full power of substitution and revocation, as the undersigned's true and lawful attorneys-in-fact and agents, with full power and authority to act in all capacities for him/her and in his/her name, place and stead in connection with the filing with the Securities and Exchange Commission, pursuant to the Securities Act of 1933, as amended, of a Registration Statement on Form S-3, and any and all amendments thereto, for up to $500 million of a combination of shares of Company Common Stock, $.01 par value per share, and/or debt securities, which shall consist of unsecured medium term notes or unsecured debentures, and execute and deliver for the undersigned and in his/her name, place and stead all such other documents or instruments and to take such further action as they, or any of them, deem appropriate. The undersigned hereby grants to each such attorney-in-fact full power and authority to take any and all actions requisite, necessary or proper in the exercise of any of the rights and power granted herein, as fully as the undersigned could do if personally present, and hereby ratifies and confirms all that any such attorney-in-fact lawfully does or causes to be done by virtue of this Limited Power of Attorney and the rights and powers granted herein. The undersigned agrees that this Limited Power of Attorney shall survive the incapacity or disability of the undersigned. IN WITNESS WHEREOF, the undersigned has executed this document as of this 29th day of October, 1998. /s/ C. H. HOLLEY ------------------------------ C. H. Holley 7 CONECTIV LIMITED POWER OF ATTORNEY The undersigned, a director or officer of Conectiv, a Delaware corporation, does hereby appoint H. E. COSGROVE, B. S. GRAHAM and L. M. WALTERS and each of them (with power to act without the other), including full power of substitution and revocation, as the undersigned's true and lawful attorneys-in-fact and agents, with full power and authority to act in all capacities for him/her and in his/her name, place and stead in connection with the filing with the Securities and Exchange Commission, pursuant to the Securities Act of 1933, as amended, of a Registration Statement on Form S-3, and any and all amendments thereto, for up to $500 million of a combination of shares of Company Common Stock, $.01 par value per share, and/or debt securities, which shall consist of unsecured medium term notes or unsecured debentures, and execute and deliver for the undersigned and in his/her name, place and stead all such other documents or instruments and to take such further action as they, or any of them, deem appropriate. The undersigned hereby grants to each such attorney-in-fact full power and authority to take any and all actions requisite, necessary or proper in the exercise of any of the rights and power granted herein, as fully as the undersigned could do if personally present, and hereby ratifies and confirms all that any such attorney-in-fact lawfully does or causes to be done by virtue of this Limited Power of Attorney and the rights and powers granted herein. The undersigned agrees that this Limited Power of Attorney shall survive the incapacity or disability of the undersigned. IN WITNESS WHEREOF, the undersigned has executed this document as of this 29th day of October, 1998. /s/ J. L. JACOBS ------------------------------ J. L. Jacobs 8 CONECTIV LIMITED POWER OF ATTORNEY The undersigned, a director or officer of Conectiv, a Delaware corporation, does hereby appoint H. E. COSGROVE, B. S. GRAHAM and L. M. WALTERS and each of them (with power to act without the other), including full power of substitution and revocation, as the undersigned's true and lawful attorneys-in-fact and agents, with full power and authority to act in all capacities for him/her and in his/her name, place and stead in connection with the filing with the Securities and Exchange Commission, pursuant to the Securities Act of 1933, as amended, of a Registration Statement on Form S-3, and any and all amendments thereto, for up to $500 million of a combination of shares of Company Common Stock, $.01 par value per share, and/or debt securities, which shall consist of unsecured medium term notes or unsecured debentures, and execute and deliver for the undersigned and in his/her name, place and stead all such other documents or instruments and to take such further action as they, or any of them, deem appropriate. The undersigned hereby grants to each such attorney-in-fact full power and authority to take any and all actions requisite, necessary or proper in the exercise of any of the rights and power granted herein, as fully as the undersigned could do if personally present, and hereby ratifies and confirms all that any such attorney-in-fact lawfully does or causes to be done by virtue of this Limited Power of Attorney and the rights and powers granted herein. The undersigned agrees that this Limited Power of Attorney shall survive the incapacity or disability of the undersigned. IN WITNESS WHEREOF, the undersigned has executed this document as of this 29th day of October, 1998. /s/ R. B. MCGLYNN ------------------------------ R. B. McGlynn 9 CONECTIV LIMITED POWER OF ATTORNEY The undersigned, a director or officer of Conectiv, a Delaware corporation, does hereby appoint H. E. COSGROVE, B. S. GRAHAM and L. M. WALTERS and each of them (with power to act without the other), including full power of substitution and revocation, as the undersigned's true and lawful attorneys-in-fact and agents, with full power and authority to act in all capacities for him/her and in his/her name, place and stead in connection with the filing with the Securities and Exchange Commission, pursuant to the Securities Act of 1933, as amended, of a Registration Statement on Form S-3, and any and all amendments thereto, for up to $500 million of a combination of shares of Company Common Stock, $.01 par value per share, and/or debt securities, which shall consist of unsecured medium term notes or unsecured debentures, and execute and deliver for the undersigned and in his/her name, place and stead all such other documents or instruments and to take such further action as they, or any of them, deem appropriate. The undersigned hereby grants to each such attorney-in-fact full power and authority to take any and all actions requisite, necessary or proper in the exercise of any of the rights and power granted herein, as fully as the undersigned could do if personally present, and hereby ratifies and confirms all that any such attorney-in-fact lawfully does or causes to be done by virtue of this Limited Power of Attorney and the rights and powers granted herein. The undersigned agrees that this Limited Power of Attorney shall survive the incapacity or disability of the undersigned. IN WITNESS WHEREOF, the undersigned has executed this document as of this 29th day of October, 1998. /s/ B. J. MORGAN ------------------------------ B. J. Morgan 10 CONECTIV LIMITED POWER OF ATTORNEY The undersigned, a director or officer of Conectiv, a Delaware corporation, does hereby appoint H. E. COSGROVE, B. S. GRAHAM and L. M. WALTERS and each of them (with power to act without the other), including full power of substitution and revocation, as the undersigned's true and lawful attorneys-in-fact and agents, with full power and authority to act in all capacities for him/her and in his/her name, place and stead in connection with the filing with the Securities and Exchange Commission, pursuant to the Securities Act of 1933, as amended, of a Registration Statement on Form S-3, and any and all amendments thereto, for up to $500 million of a combination of shares of Company Common Stock, $.01 par value per share, and/or debt securities, which shall consist of unsecured medium term notes or unsecured debentures, and execute and deliver for the undersigned and in his/her name, place and stead all such other documents or instruments and to take such further action as they, or any of them, deem appropriate. The undersigned hereby grants to each such attorney-in-fact full power and authority to take any and all actions requisite, necessary or proper in the exercise of any of the rights and power granted herein, as fully as the undersigned could do if personally present, and hereby ratifies and confirms all that any such attorney-in-fact lawfully does or causes to be done by virtue of this Limited Power of Attorney and the rights and powers granted herein. The undersigned agrees that this Limited Power of Attorney shall survive the incapacity or disability of the undersigned. IN WITNESS WHEREOF, the undersigned has executed this document as of this 29th day of October, 1998. /s/ W. E. NELLIUS ------------------------------ W. E. Nellius 11 CONECTIV LIMITED POWER OF ATTORNEY The undersigned, a director or officer of Conectiv, a Delaware corporation, does hereby appoint H. E. COSGROVE, B. S. GRAHAM and L. M. WALTERS and each of them (with power to act without the other), including full power of substitution and revocation, as the undersigned's true and lawful attorneys-in-fact and agents, with full power and authority to act in all capacities for him/her and in his/her name, place and stead in connection with the filing with the Securities and Exchange Commission, pursuant to the Securities Act of 1933, as amended, of a Registration Statement on Form S-3, and any and all amendments thereto, for up to $500 million of a combination of shares of Company Common Stock, $.01 par value per share, and/or debt securities, which shall consist of unsecured medium term notes or unsecured debentures, and execute and deliver for the undersigned and in his/her name, place and stead all such other documents or instruments and to take such further action as they, or any of them, deem appropriate. The undersigned hereby grants to each such attorney-in-fact full power and authority to take any and all actions requisite, necessary or proper in the exercise of any of the rights and power granted herein, as fully as the undersigned could do if personally present, and hereby ratifies and confirms all that any such attorney-in-fact lawfully does or causes to be done by virtue of this Limited Power of Attorney and the rights and powers granted herein. The undersigned agrees that this Limited Power of Attorney shall survive the incapacity or disability of the undersigned. IN WITNESS WHEREOF, the undersigned has executed this document as of this 29th day of October, 1998. /s/ H. J. RAVECHE ------------------------------ H. J. Raveche EX-25 7 STATEMENT OF ELIGIBILITY OF TRUSTEE 1 EXHIBIT 25 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) X ---------- FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION (Exact name of trustee as specified in its charter) United States National Banking Association 56-1989961 (State of incorporation if (I.R.S. employer not a national bank) identification no.) First Union Trust Company, National Association One Rodney Square, Suite 102 920 King St. Wilmington, DE 19801 (Address of principal (Zip Code) executive offices) Same as above (Name, address and telephone number, including area code, of trustee's agent for service) Conectiv (Exact name of obligor as specified in its charter) The State of Delaware (State or other jurisdiction of incorporation or organization) 51-0377417 (I.R.S. employer identification no.) c/o Stephanie M. Scola Conectiv 800 King Street P.O. Box 231 Wilmington, DE 19899-0231 (Address, including zip code, of principal executive offices) -------------------- 2 MEDIUM TERM NOTES (Title of the Indenture securities) ------------------------------------------------ 1. General information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Federal Reserve Bank of Richmond, VA Richmond, VA Comptroller of the Currency Washington, D.C. Securities and Exchange Commission Division of Market Regulation Washington, D.C. Federal Deposit Insurance Corporation Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. The trustee is authorized to exercise corporate trust powers. 2. Affiliations with obligor and underwriters. If the obligor or any underwriter for the obligor is an affiliate of the trustee, describe each such affiliation. None. (See Note 1 on Page 4.) Because the obligor is not in default on any securities issued under indentures under which the applicant is trustee, Items 3 through 15 are not required herein. 3 16. List of Exhibits. All exhibits identified below are filed as a part of this statement of eligibility. 1. A copy of the Articles of Association of First Union Trust Company, National Association, as now in effect, which contain the authority to commence business and a grant of powers to exercise corporate trust powers. 2. A copy of the certificate of authority of the trustee to commence business, if not contained in the Articles of Association. 3. A copy of the authorization of the trustee to exercise corporate trust powers, if such authorization is not contained in the documents specified in exhibits (1) or (2) above. 4. A copy of the existing By-laws of First Union Trust Company, National Association, or instruments corresponding thereto. 5. Inapplicable. 6. The consent of the trustee required by Section 321(b) of the Trust Indenture Act of 1939 is included at Page 4 of this Form T-1 Statement. 7. A copy of the latest report of condition of the trustee published pursuant to law or to the requirements of its supervising or examining authority is attached hereto. 8. Inapplicable. 9. Inapplicable. 3 4 NOTE Note 1: Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information. Item 2 may, however, be considered correct unless amended by an amendment to this Form T-1. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, First Union Trust Company, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Wilmington, and State of Delaware, on the 9th day of February, 1999. FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION (trustee) By: \s\ Edward L. Truitt, Jr. Name: Edward L. Truitt, Jr. Title: Vice President CONSENT OF TRUSTEE Under section 321(b) of the Trust Indenture Act of 1939, as amended, and in connection with the proposed issuance by Conectiv, Medium Term Notes, First Union Trust Company, National Association, as the trustee herein named, hereby consents that reports of examinations of said Trustee by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon requests therefor. FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION By: \s\ Edward L. Truitt, Jr. Name: Edward L. Truitt, Jr. Title: Vice President 4 Dated: February 9, 1999 5 Legal Title of Bank: First Union Trust Company, N.A. Call Date: 6/30/98 ST-BK: 37-0351 FFIEC 031 Address: Two First Union Center Page RC-1 City, State, Zip: Charlotte, NC 28288-0201 FDIC Certificate #: 33869 CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1998 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding as of the last business day of the quarter. SCHEDULE RC--BALANCE SHEET
C400 Dollar Amount in Thousands RCFD Bil Mil Thou ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): a. Noninterest-bearing balances and currency and coin (1) ............................ 0081 10,212,563 1.a. b. Interest-bearing balances (2) ..................................................... 0071 1,529,435 1.b. 2. Securities: a. Held-to-maturity securities (from Schedule RC-B, column A) ........................ 1754 1,994,665 2.a. b. Available-for-sale securities (from Schedule RC-B, column D) ...................... 1773 37,427,525 2.b. 3. Federal funds sold and securities purchased under agreements to resell ................ 1350 7,551,730 3. 4. Loans and lease financing receivables a. Loans and leases, net of unearned income (from Schedule RC-C)RCFD 2122 133,841,290 4.a. b. LESS: Allowance for loan and lease losses ...................RCFD 3123 1,856,548 4.b. c. LESS: Allocated transfer risk reserve .......................RCFD 3128 0 4.c. d. Loans and leases, net of unearned income, allowance, and reserve (item 4.a minus 4.b and 4.c) ............................... 2125 131,984,742 4.d. 5. Trading assets (from Schedule RC-D) ................................................... 3545 8,349,640 5. 6. Premises and fixed assets (including capitalized leases) .............................. 2145 3,208,660 6. 7. Other real estate owned (from Schedule RC-M) .......................................... 2150 127,757 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) ................................................................ 2180 351,648 8. 9. Customers' liability to this bank on acceptances outstanding .......................... 2155 1,026,154 9. 10. Intangible assets (from Schedule RC-M) ................................................ 2143 5,215,196 10. 11. Other assets (from Schedule RC-F) ..................................................... 2160 9,099,122 11. 12. Total assets (sum of items 1 through 11) .............................................. 2170 218,078,837 12.
- ---------- (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. 6 Legal Title of Bank: First Union Trust Company, N.A. Call Date: 6/30/98 ST-BK: 37-0351 FFIEC 031 Address: Two First Union Center Page RC-1 City, State, Zip: Charlotte, NC 28288-0201 FDIC Certificate #: 33869 Schedule RC--Continued
Dollar Amount in Thousands Bil Mil Thou LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I)..................................................................... RCON 2200 131,541,691 13.a. (1) Noninterest-bearing (1).......................RCON 6631 23,997,063 13.a.(1) (2) Interest-bearing..............................RCON 6636 107,544,628 13.a.(2) b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E, part II).............................................................. RCFN 2200 8,708,735 13.b. (1) Noninterest-bearing...........................RCFN 6631 400,989 13.b.(1) (2) Interest-bearing..............................RCFN 6636 8,307,746 13.b.(2) 14. Federal funds purchased and securities sold under agreements to repurchase...... RCFD 2800 24,903,299 14. 15. a. Demand notes issued to the U.S. Treasury.................................... RCON 2840 772,252 15.a. b. Trading liabilities (from Schedule RC-D).................................... RCFD 3548 6,496,578 15.b. 16. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases):............................................................ a. With a remaining maturity of one year or less............................... RCFD 2332 11,928,951 16.a. b. With a remaining maturity of more than one year through three years......... RCFD A547 1,260,353 16.b. c. With a remaining maturity of more than three years.......................... RCFD A548 775,219 16.c. 17. Not applicable.................................................................. 18. Bank's liability on acceptances executed and outstanding........................ RCFD 2920 1,036,587 18. 19. Subordinated notes and debentures (2)........................................... RCFD 3200 3,501,546 19. 20. Other liabilities (from Schedule RC-G).......................................... RCFD 2930 9,211,139 20. 21. Total liabilities (sum of items 13 through 20).................................. RCFD 2948 200,136,350 21. 22. Not applicable.................................................................. EQUITY CAPITAL 23. Perpetual preferred stock and related surplus................................... RCFD 3838 160,540 23. 24. Common stock.................................................................... RCFD 3230 454,543 24. 25. Surplus (exclude all surplus related to preferred stock)........................ RCFD 3839 13,206,354 25. 26. a. Undivided profits and capital reserves...................................... RCFD 3632 3,553,449 26.a. b. Net unrealized holding gains (losses) on available-for-sale securities...... RCFD 8434 572,731 26.b. 27. Cumulative foreign currency translation adjustments............................. RCFD 3284 (5,130) 27. 28. Total equity capital (sum of items 23 through 27)............................... RCFD 3210 17,942,487 28. 29. Total liabilities and equity capital (sum of items 21 and 28)................... RCFD 3300 218,078,837 29. Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank Number by independent external auditors as of any date during 1996.................... RCFD 6724 N/A M.1.
1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank 2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4 = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 5 = Review of the bank's financial statements by external auditors 6 = Compilation of the bank's financial statements by external auditors 7 = Other audit procedures (excluding tax preparation work) 8 = No external audit work - ---------- (1) Includes total demand deposits and noninterest-bearing time and savings deposit. (2) Includes limited-life preferred stock and related surplus. 7 7 Comptroller of the Currency Administrator of National Banks Multinational Banking Division 250 E Street, SW Washington, D.C. 20219-0001 TRUST CERTIFICATE Whereas, FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, Charter Number 23201, located in WILMINGTON, State of DELAWARE, being a National Banking Association, organized under the statutes of the United States, has made application for authority to act as fiduciary; And whereas, applicable provisions of the statutes of the United States authorize the granting of such authority; Now, therefore, I hereby certify that the said association is authorized to act in all fiduciary capacities by such statutes. In testimony whereof, witness my signature and Seal of office this fifteenth day of January 1997. - -------------------------------------- Deputy Comptroller for Multinational Banking 8 Comptroller of the Currency Administrator of National Banks Multinational Banking Division 250 E Street, SW Washington, D.C. 20219-0001 CHARTER CERTIFICATE Whereas, satisfactory evidence has been presented to the Office of the Comptroller of the Currency that FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, located in WILMINGTON, State of DELAWARE, has complied with all provisions of the statutes of the United States required to be complied with before being authorized to commence the business of banking as a National Banking Association; Now, therefore, I hereby certify that the above-named association is authorized to commence the business of banking as a National Banking Association. In testimony whereof, witness my signature and Seal of office this fifteenth day of January 1997. - -------------------------------------- Deputy Comptroller for Multinational Banking Charter Number 23201 -----END PRIVACY-ENHANCED MESSAGE-----