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
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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.
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(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.
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(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.
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(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
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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
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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
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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 ▇▇▇▇▇▇ ▇▇▇▇ & 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
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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
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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
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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
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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
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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
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(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
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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.
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(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.
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(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
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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, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
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.
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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:________________________
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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.
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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:________________________
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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).]
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[(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
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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.
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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.
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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
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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).
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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
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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 ▇▇▇▇ 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
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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.