UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
PENNSYLVANIA 1-1398 23-1174060
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(STATE OR OTHER JURISDICTION (COMMISSION FILE (IRS EMPLOYER
INCORPORATION) NUMBER) ID NUMBER)
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100 KACHEL BOULEVARD
GREEN HILLS CORPORATE CENTER, SUITE 400
READING, PENNSYLVANIA 19607
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(610) 796-3400
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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UGI Utilities, Inc. Form 8-K Page 2 August 1, 1996 |
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
(1) Form of Agency Agreement between UGI Utilities, Inc. and Donaldson, Lufkin & Jenrette Securities Corporation
(4) Instruments defining the rights of security holders, including indentures
(i) Form of fixed rate Series B Medium-Term Note
(ii) Form of floating rate Series B Medium-Term Note
(iii) Form of Calculation Agent Agreement dated August 1, 1996 between UGI Utilities, Inc. and First Union National Bank
(iv) Form of Officers' Certificate establishing series under the Indenture
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
By: /s/ John C. Barney
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John C. Barney
Vice President -
Finance and Accounting
Date: August 1, 1996
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UGI Utilities, Inc. Form 8-K Page 3 August 1, 1996
Exhibit No. Description
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(c)(1) Form of Agency Agreement between UGI Utilities,
Inc. and Donaldson, Lufkin & Jenrette Securities
Corporation
(c)(4)(i) Form of fixed rate Series B Medium-Term Note
(c)(4)(ii) Form of floating rate Series B Medium-Term Note
(c)(4)(iii) Form of Calculation Agent Agreement dated August
1, 1996 between UGI Utilities, Inc. and First
Union National Bank
(c)4(iv) Form of Officers' Certificate establishing series
under the Indenture
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Exhibit (1)
$75,000,000
UGI UTILITIES, INC.
SERIES B MEDIUM-TERM NOTES
August 1, 1996
Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
2. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer represents and warrants to, and agrees with, the Agent as follows:
statements in or omissions from any of such documents based upon written information furnished to the Issuer by the Agent specifically for use therein or to that portion of the Registration Statement which constitutes the Trustee's Statement of Eligibility and Qualification under the Trust Indenture Act (the Form T-1). The Indenture, including any amendment and supplements thereto, pursuant to which the Securities will be issued, conforms in all material respects with the requirements of the Trust Indenture Act and the rules and regulations of the Commission thereunder.
(c) The Issuer has been duly incorporated and is validly existing as a corporation in good standing under the laws of the Commonwealth of Pennsylvania with full power (corporate and other) and authority to own its properties and conduct its business as described in the Prospectus; the Issuer is not qualified as a foreign corporation for the transaction of business in any other jurisdiction, and does not own or lease properties or conduct any business so as to require such qualification in any jurisdiction, other than where the failure to be so qualified would not have a material adverse effect on the Issuer and its subsidiaries taken as a whole; and the Issuer does not have any subsidiary that is a "significant subsidiary" within the meaning of Rule 1-02 of Regulation S-X.
3. APPOINTMENT AS AGENT; AGREEMENT OF AGENT; SOLICITATIONS AS AGENT.
(a) Subject to the terms and conditions stated herein, the Issuer hereby appoints the Agent as an agent of the Issuer for the purpose of soliciting or receiving offers to purchase the Securities from the Issuer by others. Notwithstanding anything to the contrary contained herein, the Issuer may authorize any other person, partnership or corporation (an
forth in Section 5 hereof. Subject to all of the terms and conditions of this Agreement and any agreement contemplated by Section 11 hereof, the foregoing shall not be construed to prevent the Issuer from selling at any time any Registered Securities in a firm commitment underwriting pursuant to an underwriting agreement that does not provide for a continuous offering of such Registered Securities.
The Issuer reserves the right, in its sole discretion, to instruct the Agent to suspend solicitation of offers to purchase the Securities commencing at any time for any period of time or permanently. As soon as reasonably practicable, but in any event not later than one Business Day after receipt of notice from the Issuer, the Agent will forthwith suspend solicitation of offers to purchase Securities from the Issuer until such time as the Issuer has advised the Agent that such solicitation may be resumed.
offer, in whole or in part. The Agent shall have the right, without notice to the Issuer, to reject any offer to purchase Securities received by it, in whole or in part, if the Agent deems such offer unreasonable, and any such rejection shall not be deemed a breach of its agreement contained herein.
No Security which the Issuer has agreed to sell pursuant to this Agreement shall be deemed to have been purchased and paid for, or sold by the Issuer, until such Security shall have been delivered to the purchaser thereof against payment by such purchaser.
(d) Administrative procedures respecting the sale of Securities (the
(f) The Agent agrees to keep and maintain confidential any
information provided by the Issuer pursuant to the third sentence of
Section 4(c) and known by the Agent to be non-public, until such
information is announced or otherwise disclosed to the general public.
4. CERTAIN AGREEMENTS OF THE ISSUER. The Issuer agrees with the
Agent that it will furnish to Shearman & Sterling, counsel for the Agent, one
(1) signed copy of the registration statement relating to the Registered
Securities, including all exhibits, in the form
that it became effective and of all amendments thereto and that, in connection with each offering of Securities:
Agreement is entered into, or such other time period as to which the Issuer and the Agent may agree, in the event that a Purchase Agreement in not entered into, or (ii) the Issuer has accepted an offer to purchase Securities but the related settlement has not occurred, the Issuer, subject to the provisions of subsection (a) of this Section, will promptly prepare and file with the Commission an amendment or supplement that will correct such statement or omission or an amendment that will effect such compliance and will supply any such amended or supplemented Prospectus to the Agent in such quantities as the Agent may reasonably request. Neither the Agent's consent to, nor its delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 5.
(c) The Issuer will file promptly all documents required to be filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act. The Issuer will advise the Agent of the filing of any document pursuant to the periodic reporting requirements of the Exchange Act on the day of such filing and will furnish one copy of such document to the Agent no later than one Business Day after the day of such filing. In addition, on or prior to the date on which the Issuer makes any press release or announcement to the general public concerning earnings or concerning any other event which is required to be described, or which the Issuer proposes to describe, in a document filed pursuant to the Exchange Act, the Issuer will furnish the information contained or to be contained in such press release or announcement to the Agent and will furnish the Agent with copies of all such press releases or announcements. The Issuer will promptly notify the Agent of the Issuer's receipt of written or oral notice of any downgrading in the rating of the Securities or any other debt securities of the Issuer or any proposal to downgrade the rating of the Securities or any other debt securities of the Issuer by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Issuer (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading of such rating).
(d) As soon as practicable, after the date of each acceptance by the Issuer of an offer to purchase Securities hereunder, but in any event not later than the Applicable Availability Date (as defined below), the Issuer will make generally available to its security-holders earnings statements (as such term is defined in Rule 158 under the Act) covering a period of at least 12 months beginning after the Applicable Effective Date (as defined below) which will satisfy the provisions of Section 11(a) of the Act and Rule 158 thereunder. For the purpose of the preceding sentence only,
(e) The Issuer will furnish to the Agent copies of the Registration Statement, including all exhibits, the Prospectus and all amendments and supplements to such documents (including any Pricing Supplement), in each case as soon as available and in such quantities as are reasonably requested.
(h) The Issuer will pay all expenses incident to the performance of
its obligations under this Agreement or any agreement contemplated by
Section 11 hereof and will reimburse the Agent for any reasonable expenses
(including reasonable fees and disbursements of counsel) incurred by it in
connection with qualification of the Securities for sale and determination
of their eligibility for investment under the laws of such jurisdictions as
the Agent and the Issuer agree upon and the printing of memoranda relating
thereto, for any fees charged by investment rating agencies for the rating
of the Securities, for any filing fee of the National Association of
Securities Dealers, Inc. relating to the Securities, for reasonable
expenses incurred by the Agent in distributing the Prospectus and all
supplements thereto (including any Pricing Supplement), for previously
approved costs incurred by the Agent in advertising any offering of
Securities and for the Agent's reasonable expenses (including the
reasonable fees and disbursements of counsel to the Agent) incurred in connection with the establishment of the program contemplated by this Agreement.
5. CONDITIONS OF OBLIGATIONS. The obligation of the Agent, as agent of the Issuer, under this Agreement at any time to solicit offers to purchase the Securities is subject to the accuracy, on the date hereof, on each Representation Date and on the date of each such solicitation, of the representations and warranties of the Issuer herein, to the accuracy, on each such date, of the statements of the Issuer's officers made pursuant to the provisions hereof, the performance, on or prior to each such date, by the Issuer of its obligations hereunder, and to each of the following additional conditions precedent:
(a) The Prospectus, as amended or supplemented as of any Representation Date or date of such solicitation, as the case may be, shall have been filed with the Commission in accordance with the Rules and Regulations, and no stop order suspending the effectiveness of the Registration Statement or of any part thereof shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Issuer or the Agent, shall be contemplated by the Commission.
(b) Neither the Registration Statement nor the Prospectus, as amended or supplemented as of any Representation Date or date of such solicitation, as the case may be, shall contain any untrue statement of fact which, in the opinion of counsel for the Agent, is material or omit to state a fact which, in the opinion of counsel for the Agent, is material and is required to be stated therein or is necessary to make the statements therein not misleading, other than any statement contained in, or other matter omitted from, the Registration Statement or Prospectus in reliance upon, and in conformity with, information furnished in writing by the Agent to the Issuer expressly for use in the Registration Statement or Prospectus.
(c) There shall not have occurred since the date of the most recent amendment or supplement to the Prospectus (i) any change in the financial condition, results of operations, business or prospects of the Issuer and its subsidiaries taken as a whole that, in the reasonable judgment of the Agent, makes it impracticable to proceed with the soliciting of offers to purchase the Securities as contemplated by the Registration Statement or the Prospectus, (ii) any downgrading in the rating of the Securities or any other debt securities of the Issuer by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Issuer (other than any announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating); (iii) any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Issuer
on any exchange or in the over-the-counter market if, in the judgment of the Agent, any such event or any condition giving rise thereto or existing concurrently therewith makes it impracticable to proceed with the solicitation of offers to purchase, or sales of, Securities on the terms and in the manner contemplated by the applicable Pricing Supplement and the Prospectus; (iv) any banking moratorium declared by Federal or New York authorities; or (v) any declaration of war by Congress or any other substantial national or international calamity or emergency if, in the judgment of the Agent, the effect of any such outbreak, escalation, declaration, calamity or emergency makes it impractical to proceed with solicitations of offers to purchase, or sales of, Securities on the terms and in the manner contemplated by the applicable Pricing Supplement and the Prospectus.
(d) At the Closing Date, the Agent shall have received an opinion, dated the Closing Date, of Brendan P. Bovaird, general counsel for the Issuer, to the effect that:
(i) (A) The Issuer has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction in which it is chartered or organized, with full corporate power and authority to own its properties and conduct its business as described in the Prospectus; and (B) the Issuer is not qualified as a foreign corporation for the transaction of business in any other jurisdiction, and the Issuer does not own or lease properties or conduct any business so as to require such qualification in any jurisdiction, other than where the failure to be so qualified would not have a material adverse effect on the Issuer and its subsidiaries taken as a whole;
(ii) The Indenture has been duly authorized, executed and delivered by the Issuer and has been duly qualified under the Trust Indenture Act, and constitutes a valid and legally binding obligation of the Issuer enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization or other similar laws affecting enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law);
(iii) The Securities have been duly authorized and, when executed by the Issuer and authenticated by the Trustee in accordance with the Indenture and delivered against payment therefor as contemplated by this Agreement, such Securities will be duly issued and delivered by the Issuer and constitute valid and legally binding obligations of the Issuer, entitled to the benefits of the Indenture and enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization or other similar laws affecting enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law); and the Securities, when so issued and delivered, will conform in all material respects to the description thereof contained in the Prospectus;
(iv) To the knowledge of such counsel, there is no pending or threatened action, suit or proceeding before any court or governmental agency, authority or body or any arbitrator involving the Issuer or any of its subsidiaries of a character required to be disclosed in the Registration Statement by Item 103 of Regulation S-K which is not disclosed in the Prospectus;
(v) The Registration Statement has become effective under the Act, and, to the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement or of any part thereof has been issued, and, to the knowledge of such counsel, no proceedings for that purpose have been instituted or are pending or contemplated under the Act, and the registration statement relating to the Registered Securities, as of its effective date, the Registration Statement and the Prospectus, as of the Closing Date, and any amendment or supplement thereto, as of its date, complied as to form in all material respects with the requirements of the Act, the Trust Indenture Act and the Rules and Regulations; nothing has come to the attention of such counsel that leads them to believe that the Registration Statement relating to the Registered Securities, as of its effective date and as of the Closing Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus, or any amendment or supplement thereto, as of its respective effective or issue date and as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that such counsel need express no opinion as to the financial statements or schedules or other financial or statistical information included or incorporated by reference in the Registration Statement or the Prospectus);
(vi) Except for the registration of the securities certificate relating to the Securities by the Pennsylvania Public Utility Commission, which registration has been obtained by corrected order dated May 9, 1996, no consent, approval, authorization or order of any court or governmental agency
or body is required for the consummation of the transactions contemplated by this Agreement in connection with the issuance and sale of the Securities by the Issuer, except such as have been obtained and made under the Act and the Trust Indenture Act and as may be required under state securities laws;
(vii) The execution, delivery and performance of the Indenture or this Agreement, the issue and sale of the Securities, the consummation of the other transactions herein contemplated or the fulfillment of the terms hereof will not conflict with, result in a breach of, or constitute a default under the charter or by-laws of the Issuer or the terms, except any of the financial covenants, of any indenture or other agreement or instrument known to such counsel to which the Issuer or any of its subsidiaries is a party or bound, or any statute, rule, order or regulation known to such counsel and applicable to the Issuer or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over the Issuer or any of its subsidiaries; and the Issuer has full power and authority to authorize, issue and sell the Securities as contemplated by this Agreement;
(viii) This Agreement has been duly authorized, executed and delivered by the Issuer;
(ix) The Issuer and its subsidiaries have all necessary franchises or permits for gas and electric operations in all communities now served, except as set forth in the Registration Statement and except where, in the opinion of such counsel, the failure to be so authorized by franchise or permit does not materially affect the right of the Issuer or such subsidiary to the use of its properties or the conduct of its business; and the franchises of the Issuer and its subsidiaries referred to in the Registration Statement are good and valid except for and subject only to such defects as may be set forth or referred to in the Registration Statement, and such others as do not, in the opinion of such counsel, materially affect the right of the Issuer or such subsidiary to the use of its properties or the conduct of its business, and said franchises impose no materially burdensome restrictions; and
(x) The Issuer is not a "holding company" within the meaning of the PUHCA. The Issuer is a "subsidiary company" of a "holding company" within the meaning of the PUHCA, but UGI Corporation, the "holding company," is exempt from all the rules and regulations promulgated thereunder, other than Section 9(a)(2) thereof, by virtue of its filing of a Form U-3A-2 with the Commission.
In rendering such opinion, such counsel may rely as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Issuer and public officials.
(e) At the Closing Date, the Agent shall have received a certificate, dated the Closing Date, of the President or any Vice President and a principal financial or accounting officer of the Issuer in which such officers shall state that (i) the representations and warranties of the Issuer in this Agreement are true and correct, (ii) the Issuer has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, (iii) no stop order suspending the effectiveness of the Registration Statement or of any part thereof has been issued and, to their knowledge, no proceedings for that purpose have been instituted or are contemplated by the Commission, and (iv) subsequent to the date of the most recent financial statements included or incorporated by reference in the Prospectus, there has been no material adverse change in the financial position, results of operations, business or prospects of the Issuer and its subsidiaries taken as a whole, except as set forth in or contemplated by the Prospectus.
(f) At the Closing Date, the Agent shall have received a letter, dated the Closing Date, of Coopers & Lybrand L.L.P., confirming that they are independent public accountants within the meaning of the Act and the applicable published Rules and Regulations thereunder and stating in effect that:
(i) In their opinion, the financial statements and schedules examined by them and included in the Registration Statement and Prospectus comply in form in all material respects with the applicable accounting requirements of the Act and the related published Rules and Regulations;
(ii) On the basis of a reading of the latest available interim financial statements of the Issuer, inquiries of officials of the Issuer who have responsibility for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements, if any, included in the Prospectus do not comply in form in all material respects with the applicable accounting requirements of the Act and the related published Rules and Regulations or any material modification should be made to the unaudited consolidated financial statements for them to be in conformity with generally accepted accounting principles;
(B) the unaudited capsule information, if any, included in the Prospectus does not agree with the amounts set forth in the unaudited
consolidated financial statements from which such capsule information was derived or was not determined on a basis substantially consistent with that of the audited financial statements included in the Prospectus;
(C) at the date of the latest available balance sheet read by such accountants, or at a subsequent specified date not more than five days prior to the Closing Date, there was any change in the capital stock or any increase in short-term indebtedness or long-term debt of the Issuer and consolidated subsidiaries or, at the date of the latest available balance sheet read by such accountants, there was any increase in consolidated net current liabilities or any decrease in consolidated net assets, as compared with amounts shown on the latest balance sheet included in the Prospectus; or
(D) for the period from the date of the latest income statement included in the Prospectus to the closing date of the latest available income statement read by such accountants there were any decreases, as compared with the corresponding period of the previous year, in consolidated operating revenues, utility operating income, or net income, or, where the comparison is of fiscal quarters, in the ratio of earnings to fixed charges;
except in all cases set forth in clauses (C) and (D) above for changes, increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and
(iii) They have compared specified dollar amounts (or percentages derived from such dollar amounts) and other financial information contained in the Prospectus (in each case to the extent that such dollar amounts, percentages and other financial information are derived from the general accounting records of the Issuer and its subsidiaries subject to the internal controls of the Issuer's accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter and have found such dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by reference into the Prospectus shall be deemed included in the Prospectus for purposes of this subsection.
(g) The Agent shall have received from Shearman & Sterling, counsel for the Agent, such opinion or opinions, dated the Closing Date, with respect to the incorporation of the Issuer, the validity of the Securities, the Registration Statement, the Prospectus and other related matters as they may require, and the Issuer shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. In rendering such opinion, Shearman & Sterling may rely as to the matters relating to the laws of the Commonwealth of Pennsylvania upon the opinion of Brendan P. Bovaird, general counsel for the Issuer.
(h) Subsequent to the execution of this Agreement (1) the Issuer shall not have received notice that either Moody's Investors Service Inc.
The Issuer will furnish the Agent with such conformed copies of such opinions, certificates, letters and documents as it may reasonably request.
6. ADDITIONAL COVENANTS OF THE ISSUER. The Issuer agrees that:
(a) Each acceptance by the Issuer of an offer for the purchase of Securities shall be deemed to be an affirmation that its representations and warranties contained in this Agreement are true and correct at the time of such acceptance and a covenant that such representations and warranties will be true and correct at the time of delivery to the purchaser of the Securities as though made at and as of each such time, it being understood that such representations and warranties shall relate to the Registration Statement and the Prospectus as amended or supplemented at each such time. Each such acceptance by the Issuer of an offer for the purchase of Securities shall be deemed to constitute an additional representation, warranty and agreement by the Issuer that, as of the settlement date for the sale of such Securities, after giving effect to the issuance of such Securities, of any other Securities to be issued on or prior to such settlement date and of any other Registered Securities to be issued and sold by the Issuer on or prior to such settlement date, the aggregate amount of Registered Securities (including any Securities) which have been issued and sold by the Issuer will not exceed the amount of Registered Securities registered pursuant to the Registration Statement.
(b) Each time that the Registration Statement or the Prospectus shall be amended or supplemented (other than by a Pricing Supplement), the Issuer shall, (A) concurrently with such amendment or supplement, if such amendment or
(e) The Issuer agrees that any obligation of a person who has agreed
to purchase Securities to make payment for and take delivery of such
Securities shall be subject to (i) the accuracy, on the related settlement
date fixed pursuant to the Procedures, of the Issuer's representation and
warranty deemed to be made to the Agent pursuant to the last sentence of
subsection (a) of this Section 6 and (ii) the satisfaction, on such
settlement date, of each of the conditions set forth in Sections 5(a) and
(c), it being understood that the judgment of such person with respect to
Sections 5(c)(i), 5(c)(iii) and 5(c)(v) shall be substituted, for purposes
of this Section 6(e), for the judgment of the Agent (provided that in the
case of Section 5(c)(i) such change must, in the reasonable judgment of
such person, be so material and adverse as to make it impracticable to
purchase such Securities), and under no circumstance shall the Agent have
any duty or obligation to exercise the judgment permitted under Section
5(c) on behalf of any such person.
7. INDEMNIFICATION AND CONTRIBUTION.
(b) The Agent agrees, severally and not jointly, to indemnify and hold harmless the Issuer against any losses, claims, damages or liabilities to which the Issuer 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 any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, the Prospectus or any amendment or supplement thereto, or any related preliminary prospectus or preliminary prospectus supplement, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made,) 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 reliance upon and in conformity with written information furnished to the Issuer by the Agent specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Issuer in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, unless such loss, claim, damage or liability arises out of the offer or sale of Securities occurring after the Agent has notified the Issuer in writing that such information should no longer be used therein. The Issuer acknowledges that: (i) the statement appearing on page S-2 of the Prospectus Supplement with respect to stabilizing the market price of the Securities, (ii) the information appearing in the third, fourth and fifth sentences of the second paragraph under the heading "Plan of Distribution" in the Prospectus Supplement, and (iii) the statement in the third sentence of the fourth paragraph under the heading "Plan of Distribution" in the Prospectus Supplement constitute the only information furnished in writing by or on behalf of the Agent for inclusion in the documents referred to in the foregoing indemnity, and you confirm that such statements are correct.
indemnifying party to such indemnified party of its election so to appoint counsel to defend such action and approval by the indemnified party of such counsel, the indemnifying party will not be liable to such indemnified party under this Section 7 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (plus any local counsel), approved by the Agent in the case of paragraph (a) of this Section 7, representing the indemnified parties under such paragraph (a) who are parties to such action), (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party; and except that, if clause (i) or (iii) is applicable, such liability shall be only in respect of the counsel referred to in such clause (i) or (iii).
(d) If the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of 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 the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuer on the one hand and the Agent on the other from the offering pursuant to this Agreement of the Securities which are the subject of the action or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Issuer on the one hand and the Agent on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Issuer on the one hand and the Agent on the other shall be deemed to be in the same proportions as the total net proceeds from the offering pursuant to this Agreement of the Securities which are the subject of the action (before deducting expenses) received by the Issuer bear to the total discounts and commissions received by the Agent from the offering of such Securities pursuant to this Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer or the Agent and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Issuer and the Agent agree that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid
by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any reasonable legal or other expenses incurred by
such indemnified party in connection with investigating or defending any
action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), the Agent shall not
be required to contribute any amount in excess of the amount by which the
total price at which the Securities which are the subject of the action and
which were distributed to the public through it pursuant to this Agreement
or upon resale of Securities purchased by it from the Issuer exceeds the
amount of any damages which the 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 representation.
(e) The obligations of the Issuer under this Section 7 shall be in addition to any liability which the Issuer may otherwise have and shall extend, upon the same terms and conditions, to the person, if any, who controls the Agent within the meaning of the Act; and the obligations of the Agent under this Section 7 shall be in addition to any liability which the Agent may otherwise have and shall extend, upon the same terms and conditions, to each director of the Issuer (including any person who, with his consent, is named in the Registration Statement as about to become a director of the Issuer), to each officer of the Issuer who has signed the Registration Statement and to each person, if any, who controls the Issuer within the meaning of the Act.
8. STATUS OF THE AGENT. In soliciting offers to purchase the Securities from the Issuer pursuant to this Agreement and in assuming its other obligations hereunder (other than offers to purchase pursuant to Section 11), the Agent is acting individually and not jointly and is acting solely as agent for the Issuer and not as principal. The Agent will use its reasonable best efforts to assist the Issuer in obtaining performance by each purchaser whose offer to purchase Securities from the Issuer has been solicited by the Agent and accepted by the Issuer, but the Agent shall have no liability to the Issuer in the event any such purchase is not consummated for any reason. If the Issuer shall default on its obligations to deliver Securities to a purchaser whose offer it has accepted, the Issuer (i) shall hold the Agent harmless against any loss, claim or damage arising from or as a result of such default by the Issuer, and (ii) in particular, shall pay to the Agent any commission to which it would be entitled in connection with such sale.
9. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective indemnities, agreements, representations, warranties and other statements of the Issuer or its officers and of the Agent set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of the Agent, the Issuer or any of their respective representatives, officers or directors or any controlling person and will survive delivery of and payment for the Securities. If this Agreement is terminated pursuant to Section l0 or for any other reason, the Issuer shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 4(h) and the obligations of the Issuer under Sections 4(d) and 4(g) and the respective obligations of the Issuer and the Agent pursuant to Section 7 shall remain in effect. In addition, if any such termination shall occur either (i) when the Agent shall own any Securities with the intention of reselling them, but only for the time period specified in the Purchase Agreement relating to the purchase of such Securities from the Issuer in the event that a Purchase Agreement is entered into, or such other time period as to which the Issuer and the Agent may agree, in the event that a Purchase Agreement is not entered into, or (ii) when the Issuer has accepted an offer to purchase Securities but the related settlement has not occurred, the obligations of the Issuer under the second sentence of Section 4(b), under Sections 4(a), 4(c), 4(e) and 4(f) and, in the case of a termination occurring as described in (ii) above, under Sections 3(c), 6(a) and 6(e) and under the last sentence of Section 8, shall also remain in effect.
10. TERMINATION. This Agreement may be terminated for any reason at any time by the Issuer as to the Agent or by the Agent insofar as this Agreement relates to the Agent, upon the giving of one day's written notice of such termination to the other party hereto. Any settlement with respect to Securities placed by the Agent occurring after termination of this Agreement shall be made substantially in accordance with the Procedures and the Agent agrees, if requested by the Issuer, to take the steps therein provided to be taken by the Agent in connection with such settlement.
12. CONDITIONS TO THE OBLIGATIONS OF A PURCHASER. The obligations of a Purchaser to purchase Securities pursuant to any Purchase Agreement will be subject to the accuracy of the representations and warranties on the part of the Issuer herein as of the date of the respective Purchase Agreement and as of the settlement date for the sale of such Securities, to the performance and observance by the Issuer of all covenants and agreements herein and therein contained on its part to be performed and observed and to the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration Statement, as amended from time to time, shall have been issued and no proceedings for that purpose shall have been instituted or threatened.
(b) Except to the extent modified by the respective Purchase
Agreement, the Purchaser shall have received, appropriately updated in a
manner consistent with Section 6 hereof, (i) a certificate of the Issuer,
dated as of the settlement date, to the effect set forth in Section 5(e),
(ii) the opinion or opinions of the general counsel of the Issuer or other
counsel to the Issuer, dated as of the settlement date, to the effect set
forth in Section 5(d), (iii) the opinion of Shearman & Sterling, counsel
for the Purchaser, dated as of the settlement date, to the effect set forth
in Section 5(g) and (iv) a letter of Coopers & Lybrand, dated as of the
settlement date, to the effect set forth in Section 5(f).
(c) The conditions set forth in Section 5(c) shall have been satisfied.
(d) Subsequent to the execution of any Purchase Agreement, there shall not have been any decrease in the ratings of any of the Issuer's debt securities by Moody's or S&P.
13. NOTICES. Except as otherwise provided herein, all notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to Donaldson, Lufkin & Jenrette Securities Corporation shall be directed to it at 277 Park Avenue, New York, New York 10172, Attention: Syndicate/MTN Department, 9th Floor, fax number: (212) 892- 4298 and notices to the Issuer shall be directed to it at 100 Kachel Boulevard, Green Hills Corporate Center, Suite 400, P.O. Box 12677, Reading, Pennsylvania 19612-2677, Attention: General Counsel, fax number: (610) 992-3258; or in the case of any party hereto, to such other address or person as such party shall specify to each other party by a notice given in accordance with the provisions of this Section 13. Any such notice shall take effect at the time of receipt.
14. SUCCESSORS. This Agreement will inure to the benefit of and be binding upon the parties hereto, their respective successors and assigns, the officers and directors and
controlling persons referred to in Section 7 and, to the extent provided in
Section 6(e), any person who has agreed to purchase Securities from the Issuer,
and no other person will have any right or obligation hereunder.
15. GOVERNING LAW; COUNTERPARTS. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such executed counterparts shall together constitute one and the same Agreement.
If the foregoing correctly sets forth our agreement, please indicate your acceptance hereof in the space provided for that purpose below.
Very truly yours,
UGI UTILITIES, INC.
CONFIRMED AND ACCEPTED,
as of the date first above written:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: ________________________
Name
Title:
EXHIBIT A
The Issuer agrees to pay the Agent a commission equal to the following percentage of the principal amount of Securities sold to purchasers solicited by the Agent:
====================================================================
Commission Rate
(as a percentage of
Term principal amount)
---- -----------------
- --------------------------------------------------------------------
From 9 months to less than 1 year .125%
- --------------------------------------------------------------------
From 1 year to less than 18 months .150
- --------------------------------------------------------------------
From 18 months to less than 2 years .200
- --------------------------------------------------------------------
From 2 years to less than 3 years .250
- --------------------------------------------------------------------
From 3 years to less than 4 years .350
- --------------------------------------------------------------------
From 4 years to less than 5 years .450
- --------------------------------------------------------------------
From 5 years to less than 6 years .500
- --------------------------------------------------------------------
From 6 years to less than 7 years .550
- --------------------------------------------------------------------
From 7 years to less than 10 years .600
- --------------------------------------------------------------------
From 10 years to less than 15 years .625
- --------------------------------------------------------------------
From 15 years to less than 20 years .700
- --------------------------------------------------------------------
From 20 years to 30 years .750
- --------------------------------------------------------------------
Greater than 30 years To be determined at
the time of sale
====================================================================
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EXHIBIT B
ADMINISTRATIVE PROCEDURES
Administrative procedures and specific terms of the offering are explained below -- Part I indicating procedures applicable to all Notes, Part II indicating specific procedures for Book-Entry Notes, Part III indicating specific procedures for Notes issued in certificated form. Administrative and record keeping responsibilities will be handled for the Issuer by its Treasury Department. The Issuer will advise the Agent in writing of those persons handling administrative responsibilities with whom the Agent is to communicate regarding offers to purchase Notes and the details of their delivery.
Unless otherwise defined herein, terms defined in the Indenture (or any applicable board resolution or officer's certificate referred to therein related to the Notes) and the Prospectus Supplement shall be used herein as therein defined.
ISSUE DATE
PRICE TO PUBLIC; DENOMINATIONS; REGISTRATION
Except as otherwise specified in a Pricing Supplement, each Note will be issued at 100% of principal amount. The minimum denominations of the Notes will be $100,000 or any amount in excess thereof that is an integral multiple of $1,000. Notes will be issued only in fully registered form.
MATURITIES; MINIMUM PURCHASE; CALCULATION OF INTEREST
Each Note will mature on a date, selected by the purchaser and agreed to by the Issuer, which will be more than nine months from its Issue Date. The minimum aggregate amount of Notes which may be offered to any purchaser will be $100,000.
Interest on each interest-bearing Note will be calculated and paid in the manner described in such Note and in the Prospectus Supplement and the applicable Pricing Supplement. Unless otherwise set forth therein, interest on Fixed Rate Notes (including interest for partial periods) will be calculated on the basis of a 360-day year of twelve 30-day months and will not accrue on the 31st of any month. Interest on Floating Rate Notes, except as otherwise set forth therein, will be calculated on the basis of actual days elapsed and a year of 360 days, except that in the case of a Floating Rate Note for which the Base Rate is the Treasury Rate, interest will be calculated on the basis of the actual number of days in the year.
REDEMPTION/REPAYMENT
If indicated in the applicable Pricing Supplement, the Notes of a particular tenor will be subject to redemption in whole or in part (subject to applicable minimum denominations), at the option of the Issuer, on and after an initial redemption date as set forth in the applicable Pricing Supplement and in the applicable Note. The redemption price will be set forth in the applicable Pricing Supplement and in the applicable Note.
If indicated in the applicable Pricing Supplement, the Notes of a particular tenor will be subject to repayment at the option of the holders thereof in accordance with the terms of the Notes on a repayment date as set forth in the applicable Pricing Settlement and in the applicable Note. The repayment date or dates and repayment price will be set forth in the applicable Pricing Supplement and in the applicable Note.
PROCEDURES FOR ESTABLISHING THE TERMS OF THE NOTES
The Issuer and the Agent will discuss from time to time the rates to be borne by the Notes that may be sold as a result of the solicitation of offers by the Agent. Once the Agent has recorded any indication of interest in Notes upon certain terms, and communicated with the Issuer, if the Issuer plans to accept an offer to purchase Notes upon such terms, the Issuer will prepare a Pricing Supplement to the Prospectus, as then amended or supplemented, reflecting the terms of such Notes and will arrange to have a copy of the Pricing Supplement filed with, or transmitted by a means reasonably calculated to result in filing with, the Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933, as amended, as soon as practicable but in no event later than the fifth Business Day following the earlier of the date of determination of the settlement information described below or the date such Pricing Supplement is first used. The Issuer will supply one copy of such Pricing Supplement to the Agent at the address on Annex A attached hereto. No settlements with respect to Notes upon such terms may occur prior to such transmitting or filing.
If the Issuer decides to post rates and a decision has been reached to change interest rates, the Issuer will promptly notify the Agent. The Agent will forthwith suspend solicitation of purchases. At that time, the Agent will recommend and the Issuer will establish rates to be so "posted." Following establishment of posted rates and prior to the transmitting or filing described in the preceding paragraph, the Agent may only record indications of interest in purchasing Notes at the posted rates. Once the Agent has recorded any indication of interest in Notes at the posted rates and communicated with the Issuer, if the Issuer plans to accept an offer at the posted rate, it will prepare a Pricing Supplement reflecting such posted rates and, after approval from the Agent, will arrange to have ten copies of the Pricing Supplement filed with, or transmitted by means reasonably calculated to result in filing with, the Commission and will supply one copy of such Pricing Supplement to the Agent at the address on Annex A attached hereto. No settlements at the posted rates may occur prior to such transmitting or filing and the Agent will not, prior to such transmitting or filing, mail confirmations to customers who have offered to purchase Notes at the posted rates. After such transmitting or filing, sales, mailing of confirmations and settlements may resume, subject to the provisions of "Delivery of Prospectus" below.
Outdated Pricing Supplements, and copies of the Prospectus to which they are attached (other than those retained for files), will be destroyed.
SUSPENSION OF SOLICITATION; AMENDMENT OR SUPPLEMENT
As provided in the Agency Agreement, the Issuer may instruct the Agent to suspend solicitation of offers to purchase at any time. As soon as reasonably practicable, but in any event not later than one Business Day after receipt of notice from the Issuer, the Agent will forthwith suspend solicitation of offers to purchase Securities from the Issuer until such time as the Issuer has advised the Agent that such solicitation may be resumed.
If the Agent receives the notice from the Issuer contemplated by
Section 3(b) or 4(b) of the Agency Agreement, they will suspend solicitation as
soon as reasonably practicable, but in any event not later than one Business Day
after receipt of notice from the Issuer, and will resume solicitation only as
provided in the Agency Agreement. If the Issuer is required, pursuant to the
second sentence of Section 4(b) of the Agency Agreement, to prepare an amendment
or supplement, it will promptly furnish the Agent with the proposed amendment or
supplement; if the Issuer decides to amend or supplement the Registration
Statement or the Prospectus relating to the Notes (other than by any Pricing
Supplement), it will promptly advise the Agent and will furnish the Agent with
the proposed amendment or supplement in accordance with the terms of the Agency
Agreement. The Issuer will advise the Agent of the filing of any document
required to be filed pursuant to the periodic reporting requirements of the
Securities Exchange Act of 1934, as amended, on the day of such filing and will
furnish one copy of such document to the Agent no later than one Business Day
after such filing. The Issuer will file such amendment or supplement with the
Commission, provide the Agent with copies of any such amendment or supplement,
confirm to the Agent that such amendment or supplement has been filed with the
Commission and advise the Agent that solicitation may be resumed.
Any such suspension shall not affect the Issuer's obligations under the Agency Agreement; and in the event that at the time the Issuer suspends solicitation of offers to purchase there shall be any offers already accepted by the Issuer outstanding for settlement, the Issuer will have the sole responsibility for fulfilling such obligations. The Issuer will in addition promptly advise the Agent and the Trustee if such offers are not to be settled and if copies of the Prospectus as in effect at the time of the suspension may not be delivered in connection with the settlement of such offers.
ACCEPTANCE OF OFFERS
Agent shall have the right, without notice to the Issuer, to reject any offer received by it, in whole or in part, if the Agent deems such offer unreasonable. Prior to accepting any offer the Issuer will have the specific terms of the Notes approved by the officers authorized by the Board of Directors or by the members of the Executive/Nominating Committee of the Board of Directors. If the Issuer accepts or rejects an offer, in whole or in part, the Issuer will promptly notify the Agent.
CONFIRMATION
DELIVERY OF PROSPECTUS
AUTHENTICITY OF SIGNATURES
The Issuer will cause the Trustee to furnish the Agent from time to time with the specimen signatures of each of the Trustee's officers, employees or agents who have been authorized by the Trustee to authenticate Notes, but the Agent will not have any obligation or liability to the Issuer or the Trustee in respect of the authenticity of the signature of any officer, employee or agent of the Issuer or the Trustee on any Note or Global Note.
ADVERTISING EXPENSES
The Issuer will determine with the Agent the amount of advertising that may be appropriate in offering the Notes. Advertising expenses will be paid by the Issuer to the extent specified in the Agency Agreement.
BUSINESS DAY
TRUSTEE NOT TO RISK FUNDS
Nothing herein shall be deemed to require the Trustee to risk or expend its own funds in connection with any payment made to the Issuer, the Agent, DTC, or to the holder of any Note, it being understood by all parties that payments made by the Trustee to the Issuer, the Agent, DTC, or to the holder of any Note shall be made only to the extent that funds are provided to the Trustee for such purpose.
ISSUANCE
All Book-Entry Notes having the same Issue Date, interest rate, Maturity Date and other terms will be represented initially by a single Global Note in fully registered form without coupons. Each Global Note will be dated and issued as of the date of its authentication by the Trustee. Each Global Note will also bear an Issue Date, which will be (i) with respect to an original Global Note (or any portion thereof), its Issue Date, and (ii) following a consolidation of Global Notes, the most recent Interest Payment Date to which interest has been paid or duly provided for on the predecessor Global Notes, regardless of the date of authentication of such subsequently issued Global Note. No Global Note will represent any Note in certificated form.
IDENTIFICATION NUMBERS
REGISTRATION
will be considered the sole owner and holder of the Book-Entry Notes represented by such Global Note for all purposes under the Indenture.
TRANSFERS
Transfers of beneficial interest in a Book-Entry Note will be accomplished by book entries made by DTC and, in turn, by Participants (and, in certain cases, one or more indirect participants in DTC) acting on behalf of beneficial transferors and transferees of such Note.
EXCHANGES
The Trustee may upon notice to the Issuer deliver to DTC and the CUSIP
Service Bureau at any time a written notice of consolidation (a copy of which
shall be attached to the Global Note resulting from such consolidation)
specifying (i) the CUSIP numbers of two or more outstanding Global Notes that
represent Book-Entry Notes having the same interest rate, Maturity Date and
other terms, and for which interest (if any) has been paid to the same date,
(ii) a date, occurring at least thirty calendar days after such written notice
is delivered and at least thirty calendar days before the next Interest Payment
Date (if any) for such Notes, on which such Global Notes shall be exchanged for
a single replacement Global Note, and (iii) a new CUSIP number to be assigned to
such replacement Global Note. Upon receipt of such a notice, DTC will send to
its Participants (including the Trustee) a written reorganization notice to the
effect that such exchange will occur on such date. Prior to the specified
exchange date, the Trustee will deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and the new CUSIP number and stating
that, as of such exchange date, the CUSIP numbers of the Global Notes to be
exchanged will no longer be valid. On the specified exchange date, the Trustee
will exchange such Global Notes for a single Global Note bearing the new CUSIP
number and a new Original Issue Date, which shall be the most recent Interest
Payment Date to which interest has been paid or duly provided for on the
predecessor Global Notes, and the CUSIP numbers of the exchanged Global Notes
will, in accordance with CUSIP Service Bureau procedures, be cancelled and not
immediately reassigned. Notwithstanding the foregoing, if the Global Notes to
be exchanged exceed $100,000,000 in aggregate principal amount, one Global Note
will be authenticated and issued to represent each $100,000,000 of principal
amount of the exchanged Global Notes and an additional Global Note will be
authenticated and issued to represent any remaining principal amount of such
Global Notes (see "Denominations" below).
REDEMPTION
The Trustee will comply with the terms of the Letter with regard to redemptions of the Book-Entry Notes. In the case of Book-Entry Notes stated by their terms to be redeemable prior to the Maturity Date, at least 40 calendar days before the date fixed
DENOMINATIONS
Book-Entry Notes will be issued in principal amounts of $100,000 or any amount in excess thereof that is an integral multiple of $1,000. Global Notes will be denominated in principal amounts not in excess of $75,000,000. If one or more Book-Entry Notes having an aggregate principal amount in excess of $75,000,000 would, but for the preceding sentence, be represented by a single Global Note, then one Global Note will be issued to represent each $75,000,000 principal amount of such Book-Entry Note or Notes and an additional Global Note will be issued to represent any remaining principal amount of such Book-Entry Note or Notes. In such a case, each of the Global Notes representing such Book- Entry Note or Notes shall be assigned the same CUSIP number.
INTEREST
The Trustee and the Issuer acknowledge that Standard & Poor's Corporation will use the information received in the pending deposit message described under Settlement Procedure "C" to include the amount of any interest payable and certain other information regarding the related Global Note in the appropriate daily or weekly bond report published by Standard & Poor's Corporation.
PAYMENTS OF PRINCIPAL AND INTEREST
amount of interest to be paid on each Global Note on the following Interest Payment Date (other than an Interest Payment Date coinciding with Maturity) and the total of such amounts. DTC will confirm the amount payable on each Global Note on such Interest Payment Date by reference to the daily or weekly bond reports published by Standard & Poor's Corporation. The Issuer will pay to the Trustee the total amount of interest due on such Interest Payment Date (other than at Maturity), and the Trustee will pay such amount to DTC at the times and in the manner set forth below under "Manner of Payment." If any Interest Payment Date for a Book-Entry Note is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Interest Payment Date.
Notes represented by such Global Notes are recorded in the book-entry system maintained by DTC. NEITHER THE ISSUER NOR THE TRUSTEE SHALL HAVE ANY RESPONSIBILITY OR LIABILITY FOR THE PAYMENT BY DTC TO SUCH PARTICIPANTS OF THE PRINCIPAL OF AND INTEREST ON THE BOOK-ENTRY NOTES.
SETTLEMENT
In the event of a purchase of Book-Entry Notes by the Agent, as principal, appropriate Settlement details, if different from those set forth below, will be set forth in the Purchase Agreement to be entered into between the Agent and the Issuer. Unless otherwise agreed, Settlement Procedures with regard to each Book-Entry Note sold by the Agent, as agent for the Issuer, will be as follows.
The receipt by the Issuer of immediately available funds in payment for a Book-Entry Note, the authentication and issuance of the Global Note or Global Notes representing such Note and entry by the Agent of an SDFS deliver order through DTC's Participant Terminal System to credit such Note to the account of a Participant purchasing, or acting for the purchase of, such Note, shall constitute "settlement" with respect to such Note. All orders accepted by the Issuer will be settled from one to five Business Days from the date of the sale pursuant to the timetable for settlement set forth below unless the Issuer and the purchaser agree to settlement on a later date.
DETAILS FOR SETTLEMENT
1. Principal amount of each Note (in authorized denominations) to be purchased.
2. Issue price, interest rate if fixed or Initial Interest Rate and interest rate basis if floating, Spread or Spread Multiplier, maximum or minimum interest rates, interest calculation dates, Index Maturity, Interest Determination Date, Interest Reset Date,
interest rate reset period, interest payment period, Record Dates and Interest Payment Dates (as such capitalized terms are defined in either the Indenture or the Prospectus Supplement), in each case, to the extent applicable.
3. Any index to determine the amounts of payments of principal and any premium and interest.
4. Maturity of each Note.
5. Redemption, repayment or sinking fund provisions, if any, of each Note.
6. If an Original Issue Discount Note, the Yield to Maturity and the initial accrual period of original issue discount.
7. Issue Date of each Note.
8. Settlement date for each Note.
9. Agent's commission (to be paid in the form of a discount from the proceeds remitted to the Issuer upon settlement).
The Issue Date of, and the settlement date for, Notes will be the same. Before accepting any offer to purchase Book-Entry Notes to be settled in less than three Business Days, the Issuer will verify that the Trustee will have adequate time to prepare and authenticate the Global Notes.
SETTLEMENT PROCEDURES
Settlement Procedures with regard to each Book-Entry Note sold by the Issuer through the Agent shall be as follows:
A. The Agent will advise the Issuer by telephone, confirmed by telecopy, of the Purchase Information with respect to each Book-Entry Note which will be represented by the Global Note which is to be issued.
B. The Issuer will advise the Trustee by telex, facsimile transmission or by another mutually acceptable method of the information set forth in Settlement Procedure "A" above and the name of the Agent. Each such communication by the Issuer shall constitute a representation and warranty by the Issuer to the Trustee and the Agent that (i) such Note is then, and at the time of issuance and sale thereof will be, duly
authorized for issuance and sale by the Issuer; (ii) such Note, and the
Global Security representing such Note, will conform with the terms of the
Indenture pursuant to which such Note and Global Security are issued; and
(iii) upon authentication and delivery of such Global Security, the
aggregate initial offering price of all Notes issued under the Indenture
will not exceed $75,000,000 (except for Securities represented by,
authenticated and delivered in exchange for or in lieu of Securities
pursuant to the Indenture).
C. The Trustee will assign a CUSIP number to the Global Note representing such Book-Entry Note and advise the Issuer by telephone, confirmed by telecopy, of such CUSIP number. The Trustee will enter a pending deposit message through DTC's Participant Terminal System, providing the following settlement information to DTC (which shall route such information to Standard & Poor's Corporation and Interactive Data Corporation) and the Agent.
1. The applicable information set forth in Settlement Procedure "A."
2. Initial Interest Payment Date for such Book-Entry Note, number of days by which such date succeeds the Record Date and the amount of interest payable on such Interest Payment Date per $1,000 principal amount of Book-Entry Notes.
3. CUSIP number of the Global Note representing such Book-Entry Note.
4. Whether such Global Note will represent any other Book-Entry Note (to the extent known at such time).
5. Interest payment periods.
6. Numbers of the participant accounts maintained by DTC on behalf of the Trustee and the Agent.
D. To the extent it has not already done so, the Issuer will deliver to the Trustee a Global Note representing such Book-Entry Note.
E. The Trustee will complete and authenticate the Global Note representing such Book-Entry Note.
F. DTC will credit such Book-Entry Note to the Trustee's participant account at DTC.
G. The Trustee will enter an SDFS deliver order through DTC's Participant Terminal System, with respect to each Book-Entry Note represented by the Global Note to be
issued, instructing DTC to (i) debit such Book-Entry Note to the Trustee's participant account and credit such Book-Entry Note 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 Book-Entry Note less the Agent's commission. The entry of such a deliver order shall constitute a representation and warranty by the Trustee to DTC that (i) the Global Note representing such Book-Entry Note has been delivered and authenticated and (ii) the Trustee is holding such Global Note pursuant to the MTN Certificate Agreement.
H. The Agent will enter an SDFS deliver order through DTC's Participant Terminal System, with respect to each Book-Entry Note represented by the Global Note to be issued, instructing DTC (i) to debit such Book-Entry Note to the Agent's participant account and credit such Book-Entry Note to the participant accounts of the Participant with respect to such Book-Entry Note and (ii) to debit the settlement accounts of such Participant and credit the settlement account of the Agent for an amount equal to the price of such Book-Entry Note.
I. Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures "G" and "H" will be settled in accordance with SDFS operating procedures in effect on the settlement date.
J. The Trustee, upon confirming receipt of such funds, will credit the amount transferred to the Trustee in accordance with Settlement Procedure "G," in funds available for immediate use, to a bank account of the Issuer at the Trustee.
K. The Agent will confirm the purchase of each Book-Entry Note to the purchaser either by transmitting to the Participant with respect to such Book-Entry Note a confirmation order or orders through DTC's institutional delivery system or by mailing a written confirmation to such purchaser, in each case together with or preceded by a Prospectus, Prospectus Supplement and Pricing Supplement.
L. The Trustee will send a copy of the Global Note(s) representing such Book- Entry Note by first-class mail to the Issuer's Treasury Department.
M. On the first Business Day of each month, the Trustee will also send to the Issuer's Treasury Department a statement setting forth the principal amount of Book-Entry Notes Outstanding as of that date under the Indenture.
Preparation
of Pricing
Supplement: If the Issuer accepts an offer to purchase a Book Entry
Note, it will prepare a Pricing Supplement reflecting the
terms of such
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Book-Entry Note and arrange to have delivered to the Agent a copy of such Pricing Supplement, not later than 5:00 p.m., New York City time, on the Business Day following the sale Date, or if the Issuer and the Agent or purchaser agree to settlement on the Business Day following the date of acceptance of such offer, not later than noon, New York City time, on such date. The Issuer will arrange to have a Pricing Supplement filed with the Commission not later than the close of business on the fifth Business Day following the date on which such Pricing Supplement is first used.
Copies of the Pricing Supplement must be delivered to the Agent and the Trustee as indicated below:
(1) Donaldson, Lufkin & Jenrette Securities Corporation:
Attn: Syndicate/MTN Department (Carlos Sanchez),
fax number (212) 892-4298;
(2) First Union National Bank:
Attn: Alan G. Finn, fax number (215) 985-7290.
SETTLEMENT PROCEDURES TIMETABLE
For orders of Book-Entry Notes solicited by the Agent, and accepted by the Issuer for settlement on the first Business Day after the sale date, Settlement Procedures "A" through "K" set forth above shall be completed as soon as possible but not later than the respective times (New York City time) set forth below:
Settlement
Procedure Time
--------- ----
A-B 11:00 a.m. on the sale date
C 2:00 p.m. on the sale date
D 3:00 p.m. on the Business Day
before settlement date
E 9:00 a.m. on settlement date
F 10:00 a.m. on settlement date
G-H 2:00 p.m. on settlement date
I 4:45 p.m. on settlement date
J-L 5:00 p.m. on settlement date
M monthly
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NOTE: THE PROSPECTUS AS MOST RECENTLY AMENDED OR SUPPLEMENTED MUST ACCOMPANY OR PRECEDE ANY WRITTEN CONFIRMATION GIVEN TO THE CUSTOMER, PROVIDED THAT THE PRICING SUPPLEMENT SUPPLIED SHALL BE THE PRICING SUPPLEMENT APPLICABLE TO THE SETTLEMENT, UNLESS A CHANGE OTHER THAN PRICE SHALL BE INCLUDED IN A LATER PRICING SUPPLEMENT, IN WHICH CASE BOTH SHALL BE PROVIDED. (SETTLEMENT PROCEDURE K).
If a sale is to be settled more than one Business Day after the sale date, Settlement Procedures "A," "B" and "C" shall be completed as soon as practicable but not later than the times specified above on the first Business Day after the sale date. In connection with a sale which is to be settled more than one Business Day after the sale date, if the initial interest rate for a Floating Rate Note is not known at the time that Settlement Procedure "A" is completed, Settlement Procedures "B" and "C" shall be completed as soon as such rates have been determined, but no later than 11:00 a.m. and 2:00 p.m., respectively, on the second Business Day before the settlement date. Settlement Procedures "I" and "J" are subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the SDFS operating procedures in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled or cancelled, the Issuer shall notify the Trustee no later than 1:00 p.m. New York City time on the Business Day immediately preceding the scheduled settlement date, and upon receipt of such notice, the Trustee will deliver to DTC, through DTC's Participant Terminal System, a cancellation message to such effect by no later than 2:00 p.m., New York City time, on the Business Day immediately preceding the scheduled settlement date.
FAILURE TO SETTLE
If the Trustee has not entered an SDFS deliver order with respect to a Book-Entry Note pursuant to Settlement Procedure "G," then upon written request (which may be evidence by telecopy transmission) of the Issuer, the Trustee shall deliver to DTC, through DTC Participation Terminal System, as soon as practicable, but no later than 2:00 p.m. on any Business Day, a withdrawal message instructing DTC to debit such Book-Entry Note to the Trustee's participant account. DTC will process the withdrawal message, provided that the Trustee's participant account contains a principal amount of the Global Note representing such Book-Entry Note that is at least equal to the principal amount to be debited. If withdrawal messages are processed with respect to all the Book-Entry Notes represented by a Global Note, the Trustee will mark such Global Note "cancelled," make appropriate entries in the Trustee's records and so advise the Issuer. The CUSIP number assigned to such Global Note shall, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned. If withdrawal messages are processed with respect to one or more, but not all, of the Book-Entry Notes represented by a Global Note, the Trustee will exchange such Global Notes for two Global Notes, one of which shall represent such Book-Entry Note
or Book-Entry Note and shall be cancelled immediately after issuance and the other of which shall represent the remaining Book-Entry Notes previously represented by the surrendered Global Note and shall bear the CUSIP number of the surrendered Global Note.
If the purchase price for any Book-Entry Note is not timely paid to the Participants with respect to such Book-Entry Note by the beneficial purchaser thereof (or person, including an indirect participant in DTC, acting on behalf of such purchaser), such Participant and, in turn the Agent for such Book-Entry Note may enter an SDFS deliver order through DTC's Participant Terminal System debiting such Book-Entry Note to the Agent's participant account and crediting such Book-Entry Note free to the participant account of the Trustee and shall notify the Trustee and the Issuer thereof. Thereafter, the Trustee, (i) will immediately notify the Issuer, once the Trustee has confirmed that such Book-Entry Note has been credited to its participant account, and the Issuer shall immediately transfer by Fedwire (in immediately available funds) to the Agent an amount equal to the price of such Book-Entry Note which was previously sent by wire transfer to the account of the Issuer maintained at the Trustee in accordance with Settlement Procedure "J," and (ii) the Trustee will deliver the withdrawal message and take the related actions described in the preceding paragraph. The Agent will not be entitled to any commission with respect to any Book-Entry Note which the purchaser does not accept and make payment for. Such debits and credits will be made on the settlement date, if possible, and in any event not later than 5:00 p.m. on the following Business Day. If such failure shall have occurred for any reason other than failure by the Agent to perform its obligations hereunder or under the Agency Agreement, the Issuer will reimburse the Agent on an equitable basis for its loss of the use of funds during the period when the funds were credited to the account of the Issuer but only to the extent that, after using reasonable efforts, the Agent is unable to recoup its loss from a defaulting Purchaser.
Notwithstanding the foregoing, upon any failure to settle with respect to a Book-Entry Note, DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to one or more, but not all, of the Book-Entry Notes to have been represented by a Global Note, the Trustee will provide, in accordance with Settlement procedures "D" and "E," for the authentication and issuance of a Global Note representing the other Book-Entry Notes to have been represented by such Global Note and will make appropriate entries in its records.
PART III: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
INTEREST PAYMENTS
On the fifth Business Day immediately preceding each Interest Payment Date, the Trustee will furnish the Issuer with the total amount of the interest payments to be paid on such Interest Payment Date. The Trustee will provide monthly to the Issuer's Treasury Department a list of the principal and interest to be paid on Notes maturing in the next
succeeding month. The Trustee will assume responsibility for withholding taxes on interest paid as required by law to the extent holders have not produced a taxpayer identification number (TIN).
PAYMENT AT MATURITY
DETERMINATION OF SETTLEMENT DATE
The receipt of immediately available funds by the Issuer from the
Agent in payment for a Note and the authentication and issuance of such Note
shall, with respect to such Note, constitute "settlement." All offers accepted
by the Issuer will be settled on the fifth Business Day next succeeding the date
of receipt unless otherwise agreed by any purchaser, the Issuer and the Trustee.
The settlement date shall be specified upon receipt of an offer prior to 3:00
p.m., New York City time. On the Business Day prior to the settlement date, the
Issuer will instruct the Trustee to authenticate and deliver the Notes no later
than 2:15 p.m., New York City time, on the settlement day.
DETAILS FOR SETTLEMENT
In the event of a purchase of certificated Notes by the Agent, as principal, appropriate Settlement details, if different from those set forth below, will be set forth in the Purchase Agreement to be entered into between the Agent and the Issuer. Unless otherwise agreed, Settlement Procedures with regard to certificated Notes sold by the Agent, as agent for the Issuer, will be as follows.
1. Exact name in which the Note or Notes are to be registered (the
2. Exact address of the registered owner and, if different, the address for delivery, notices and payment of principal and premium and interest.
3. Taxpayer Identification Number (TIN) of the registered owner.
4. Delivery address for each Note.
The Issue Date of, and the settlement date for, Notes will be the same. Before accepting any offer to purchase Notes to be settled in less than three Business Days, the Issuer will verify that the Trustee will have adequate time to prepare and authenticate the Notes.
Immediately after receiving the details for each offer from the Agent (but in no event later than 3:00 p.m. on the Business Day prior to the settlement date for such Notes), the Issuer will, after recording the details and any necessary calculations, communicate the Purchase Information by telex, facsimile transmission or other acceptable means, to the Trustee. The Trustee will assign to and enter on each Note a transaction number. Each such communication by the Issuer shall constitute a representation and warranty by the Company to the Trustee and the Agent that (i) such Note is then, and at the time of issuance and sale thereof will be, duly authorized for issuance and sale by the Issuer; (ii) such Note, and the Global Security representing such Note, will conform with the terms of the Indenture pursuant to which such Note and Global Security are issued; and (iii) upon authentication and delivery of such Global Security, the aggregate initial offering price of all Notes issued under the Indenture will not exceed $75,000,000 (except for Securities represented by, authenticated and delivered in exchange for or in lieu of Securities pursuant to the Indenture).
SETTLEMENT; NOTE DELIVERIES AND CASH PAYMENT
The Issuer will deliver to the Trustee at the commencement of the program and from time to time thereafter a supply of duly executed Notes adequate to implement the program. Upon the receipt of appropriate documentation and instructions from the Issuer the Trustee will cause the Notes to be completed and authenticated and hold the Notes for delivery against confirmation from the Issuer of receipt of payment.
The Trustee will deliver the Notes in accordance with instructions from the Issuer, to the Agent, as the Issuer's agent, for the benefit of the purchaser against receipt therefor by stamping the delivery receipt with the date and time received and returned. If the Agent in any instance advances its own funds, the Issuer shall not use any of the proceeds of such sale to acquire securities.
The Agent, as the Issuer's agent, will deliver the Notes (with the written confirmation and Prospectus provided for in Part I above) to the purchaser thereof against payment therefor by such purchaser. Delivery of any confirmation or Note will be made in compliance with "Delivery of Prospectus" in
Part I.
FAILS
In the event that a purchaser shall fail to accept delivery of and make payment for a Note on the settlement date, the Agent will notify the Trustee and the Issuer by telephone, confirmed in writing. If such Note has been delivered to the Agent, as the Issuer's agent, the Agent shall return such Note to the Trustee. If funds have been advanced by the Agent for the purchase of such Note, the Issuer will, immediately upon receipt of confirmation from the Trustee of receipt of such Note, debit its account for the amount so advanced and shall refund the payment previously made by the Agent in immediately available funds. Such payments will be made on the settlement date for such Note, if possible, and in any event not later than the Business Day following such settlement date. If any failure described in this paragraph shall have occurred for any reason other than the failure of the Agent to provide the Purchase Information to the Issuer or to provide a confirmation to the purchaser, the Issuer will reimburse the Agent on an equitable basis for its loss of the use of funds during the period when they were credited to the account of the Issuer but only to the extent that, after using reasonable efforts, the Agent is unable to recoup its loss from a defaulting Purchaser.
Immediately upon receipt of the Note in respect of which the fail occurred, the Trustee will cause the Debt Security Registrar to make appropriate entries to reflect the fact that the Note was never issued and the Note will be cancelled and disposed of as provided in the Indenture.
ANNEX A
Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, N.Y. 10172
Attention: Carlos Sanchez, Syndicate/MTN Department
EXHIBIT C
PURCHASE AGREEMENT
_______, 199_
UGI Utilities, Inc.
100 Kachel Boulevard
Suite 400
P.O. Box 12677
Reading, Pennsylvania 19612-2677
Attention Treasurer:
The undersigned agrees to purchase the following principal amount of
the Securities described in the Agency Agreement dated August 1, 1996 (the
"Agency Agreement"):
- -----------------
Principal $__________
Interest Rate ___%
Maturity Date __________
Discount ___% of Principal Amount
Price to be paid to Issuer
(in immediately
available funds) $__________
Commission to Agent $__________
Settlement Date __________, 199_
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Except as otherwise expressly provided herein, all terms used herein which are defined in the Agency Agreement shall have the same meanings as in the Agency Agreement.
This Agreement incorporates by reference all of the provisions of the
Agency Agreement (including any amendment entered into pursuant thereto by the
Issuer and the Agent, to the extent applicable), except provisions of the Agency
Agreement relating specifically to solicitation by the Agent, as Agent, and
except that (i) the last sentence of Section 7(d) shall not be applicable; and
(ii) the term "this Agreement", as used in Section 7(d) of the Agency Agreement,
shall be deemed to refer to this Agreement (and not the Agency Agreement) except
that in the sixth sentence such term shall be deemed to refer to the Agency
Agreement. You and we agree to perform, to the extent applicable, our
respective duties and obligations specifically provided to be performed by each
of us in the Procedures.
Our obligation to purchase Securities hereunder is subject to the accuracy on the above Settlement Date of your representations and warranties contained in Section 2 of the
Agency Agreement (it being understood that such representations and warranties shall be deemed to be made as of the date of this Purchase Agreement and references to the Registration Statement and Prospectus shall be deemed to relate to the Registration Statement and the Prospectus as amended at such Settlement Date specified above) and to your performance and observance of all covenants and agreements contained in Sections 4 and 6 thereof. Our obligation hereunder is also subject to the following conditions:
(a) the satisfaction, at such Settlement Date, of each of the
conditions set forth in subsections (a) and (b) and (d) through (g) of
Section 5 of the Agency Agreement (it being understood that each document
so required to be delivered shall be dated such Settlement Date and that
each such condition and the statements contained in each such document that
relate to the Registration Statement or the Prospectus shall be deemed to
relate to the Registration Statement or the Prospectus, as the case may be,
as amended or supplemented as of the date hereof and at the time of
settlement on such Settlement Date and except that the opinion described in
Section 5(d) shall be modified so as to state that the Securities being
sold on such Settlement Date, when delivered against payment therefor as
provided in the Indenture and this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Issuer enforceable in accordance with their
terms, subject only to the exceptions as to enforcement set forth in clause
(iii) of Section 5(d) of the Agency Agreement, and will conform to the
description thereof contained in the Prospectus and amended or supplemented
at such Settlement Date; and
(b) there shall not have occurred since the date of the most recent amendment or supplement to the Prospectus (i) any material adverse change in the financial condition, results of operations, business or prospects of the Issuer or its subsidiaries taken as a whole; (ii) any downgrading in the rating of the Securities or any other debt securities of the Issuer by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act), or any public announcement that any such organization has under surveillance or review its rating of the Securities or any other debt securities of the Issuer (other than an announcement with positive implications of a possible upgrading and no implication of a possible downgrading, of such rating); (iii) any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading on any securities of the Issuer on any exchange or in the over-the counter market if, any such event or any condition giving rise thereto or existing concurrently therewith makes it impracticable to proceed with the purchase of the Securities on the terms and in the manner contemplated by the applicable Pricing Supplement and the Prospectus; (iv) any banking moratorium declared by Federal or New York authorities; or (v) any declaration of war by Congress or any other substantial national or international calamity or emergency if the effect of any such outbreak, escalation, declaration, calamity or emergency makes
it
impractical to proceed with the purchase of the Securities on the terms and in the manner contemplated by the applicable Pricing Supplement and the Prospectus.
(c) During the ___-day period following the date hereof you will not, directly or indirectly, without our prior consent, offer, sell or enter into any agreement to sell, in a public offering, any debt securities issued or guaranteed by the Issuer with a maturity of more than one year and terms substantially similar to those of the Securities being purchased pursuant to this Agreement.
(d) Prior to the settlement date, you shall have furnished to us the following information, certificates and documents:
For purposes of the definition of "Marketing Time" in the Agency Agreement, the time period referred to in such definition shall be ___ days.
If any of the conditions specified herein or in Section 12 of the Agency Agreement shall not have been fulfilled in all material respects when and as provided in the Agency Agreement, or if any of the opinions and certificates mentioned above or in this Purchase Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Purchaser and its counsel, the Purchase Agreement and all obligations of the Purchaser thereunder may be canceled at, or at any time prior to, the respective settlement date by the Purchaser. Notice of such cancellation shall be given to the Issuer in writing or by telephone or telegraph confirmed in writing.
In further consideration of our agreement hereunder, you agree that between the date hereof and the above Settlement Date, you will not offer or sell, or enter into any agreement to sell, any debt securities of the Issuer in the United States, other than sales of Securities, borrowings under your revolving credit agreements and lines of credit, the private placement of securities and issuances of your commercial paper.
If for any reason our purchase of the above Securities is not
consummated, the respective obligations of you and the undersigned pursuant to
Section 7 shall remain in effect.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such executed counterparts shall together constitute one and the same Agreement.
DONALDSON, LUFKIN & JENRETTE SECURITIES
CORPORATION
By:_________________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
UGI UTILITIES, INC.
By:_________________________________
Name:
Title:
EXHIBIT D
FORM OF OFFICERS' CERTIFICATE
TO BE ISSUED PURSUANT TO SECTION 5(E)
1. The representations and warranties of the Issuer contained in the Agency Agreement are true and correct on and as of the date hereof.
2. The Issuer has complied with all agreements and satisfied all conditions on its part to be performed or satisfied under the Agency Agreement at or prior to the date hereof.
3. No stop order suspending the effectiveness of the Registration Statement (as defined in the Agency Agreement), as amended or supplemented, or any part thereof has been issued and, to our knowledge, no proceedings for that purpose have been instituted or are contemplated by the Securities and Exchange Commission.
4. Subsequent to [Date of most recent financial statements included or incorporated by reference in the Prospectus] there has been no material adverse change in the financial position, results of operation, business or prospects of the Issuer and its subsidiaries taken as a whole, except as set forth in or contemplated by the Prospectus (as defined in the Agency Agreement), as amended or supplemented.
IN WITNESS WHEREOF, we have hereunto signed our names.
Dated: _______________
Title:
Title:
Exhibit (4)(i)
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE REGISTERED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, 55 WATER STREET, NEW YORK, NEW YORK ("DTC"), OR SUCH OTHER DEPOSITORY AS SPECIFIED BELOW (DTC OR SUCH OTHER DEPOSITORY BEING THE "DEPOSITORY") TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY THAT IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
CUSIP NO. PRINCIPAL AMOUNT: $
REGISTERED NO. FXR-
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FIXED RATE
INTEREST RATE PER ORIGINAL ISSUE DATE: MATURITY DATE:
ANNUM:
INTEREST PAYMENT OPTIONAL RESET DATE: AMORTIZING NOTE:
DATES IF OTHER THAN
MAY 15 AND NOVEMBER
15:
ORIGINAL ISSUE YIELD TO MATURITY: INITIAL ACCRUAL PERIOD
DISCOUNT NOTE: (ONLY APPLICABLE IF NOTE OID COMPUTED UNDER
ISSUED AT ORIGINAL ISSUE (__APPROXIMATE) (__EXACT)
DISCOUNT) METHOD:
OID DEFAULT AMOUNT: ISSUE PRICE: (IF OTHER THAN REPAYMENT AT OPTION OF
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(ONLY APPLICABLE IF THE FULL PRINCIPAL AMOUNT) HOLDER:
NOTE ISSUED AT
ORIGINAL ISSUE
DISCOUNT)
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FIXED RATE
REDEMPTION AT AUTHORIZED DEPOSITORY IF OTHER
OPTION OF COMPANY: DENOMINATION: $100,000, THAN DEPOSITORY TRUST
and increments of $1,000 COMPANY:
thereafter
PAYING AGENT IF OTHER
THAN FIRST UNION
NATIONAL BANK,
123 SOUTH BROAD
STREET, PHILADELPHIA,
PA 19109:
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Payments of interest, if any, shall be made by the Paying Agent to the Depository in immediately available funds in accordance with existing arrangements between the Paying Agent and the Depository; payments of principal of and interest, if any, on the Maturity Date shall be made by the Paying Agent by wire transfer in immediately available funds to an account specified by the Depository.
The Company shall pay any administrative costs imposed by banks in connection with making payments in immediately available funds, but any tax, assessment or governmental charge imposed upon payments shall be borne by the Holder in respect of which such payments are made.
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FIXED RATE
Any payment due on this Note on a day that is not a Business Day shall be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment.
This Note is one of a duly authorized issue of Securities of the Company (hereinafter called the "Securities"), all issued or to be issued under and pursuant to an indenture dated as of August 1, 1993 (hereinafter called the "Indenture"), duly executed and delivered by the Company and First Union National Bank (formerly, First Fidelity Bank, National Association), as Trustee (hereinafter, together with any successor trustee or trustees under the Indenture called the "Trustee"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, obligations, duties and immunities thereunder of the Trustee, the Company, and the holders of the Securities. As provided in the Indenture, the Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest, if any, at different rates, may be subject to different redemption or repayment provisions, if any, may be subject to different sinking, purchase or analogous funds, if any, and may otherwise vary as provided for or permitted by the Indenture. This Note is one of a series of the Securities offered on a periodic basis by the Company, which series is unlimited in aggregate principal amount, designated as the Series B Medium-Term Notes (the "Notes") of the Company. The Notes may mature at different times (but in all instances more than nine months from their respective dates of issue), bear interest, if any, at different rates, be redeemable at the option of the Company at different times or not at all, and be repayable at the option of the Holder at different times or not at all.
If this Note is an Original Issue Discount Note for United States federal income tax purposes, as specified above, then, except as otherwise specified above, upon redemption or repayment (except in the case of an Event of Default as set forth below) of this Note there shall be payable in lieu of the Principal Amount, an amount equal to the Amortized Face Amount of this Note. The "Amortized Face Amount," shall be equal to (a) the Issue Price, as specified above, plus (b) the portion of the difference between the Issue Price and the Principal Amount of this Note that has accrued at the Yield to Maturity specified above (computed in accordance with generally accepted United States bond yield computation principles) at the date as of which such Amortized Face Amount is calculated, but in no event shall the Amortized Face Amount exceed the Principal Amount.
Amortizing Notes are Notes as to which all or a portion of the principal amount is payable prior to the Maturity Date in accordance with a schedule, by application of a formula, or by reference to an Index. If this Note is an Amortizing Note, the terms and conditions, including the terms for payment hereof, shall be specified above.
This Note indicates whether the Company has the option to reset the interest rate and, if so, the date or dates on which such interest rate may be reset (each an "Optional Reset Date"). If the Company has such option with respect to this Note, the following procedures shall apply.
The Company may exercise such option with respect to this Note by notifying the Trustee of such exercise at least 50 but not more than 60 days prior to an Optional Reset Date. Not later than 40 days prior to such Optional Reset Date, the Trustee shall mail to the Holder a notice ("Reset Notice") setting forth (i) the election of the Company to reset the interest rate, (ii) such new interest rate and (iii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date or, if there is no such next Optional Reset Date, to the Maturity Date (each such period a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during such Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder, such new interest
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FIXED RATE
rate shall take effect automatically and, except as modified by the Reset Notice and as described in the next paragraph, this Note shall have the same terms as prior to the transmittal of such Reset Notice.
Notwithstanding the foregoing, the Company may, at its option, revoke the interest rate, as provided for in the Reset Notice, and establish an interest rate that is higher than the interest rate provided for in the relevant Reset Notice for the Subsequent Interest Period commencing on such Optional Reset Date, by causing the Trustee to mail, not later than 20 days prior to an Optional Reset Date, notice of such higher interest rate to the Holder. Such notice shall be irrevocable. The Company must notify the Trustee of its intentions to revoke such a Reset Notice at least 25 days prior to such Optional Reset Date. If the interest rate is reset on an Optional Reset Date and the Holder has not tendered this Note for repayment (or has validly revoked any such tender) pursuant to the next succeeding paragraph, this Note shall bear such higher interest rate for the Subsequent Interest Period.
If the Company elects to reset the interest rate as described above, the Holder has the option to elect repayment of this Note by the Company on any Optional Reset Date at a price equal to the aggregate principal amount hereof outstanding on, plus any interest accrued to, such Optional Reset Date. In order for this Note to be so repaid on an Optional Reset Date, the Holder must follow the procedures set forth below for optional repayment, except that (i) the period for delivery of this Note or notification to the Trustee shall be at least 25 but not more than 35 days prior to such Optional Reset Date and (ii) a Holder who has tendered this Note for repayment pursuant to a Reset Notice may, by written notice to the Trustee, revoke any such tender until the close of business on the tenth day prior to such Optional Reset Date.
This Note indicates either (i) that such Note cannot be redeemed prior to its Maturity Date or (ii) that such Note shall be redeemable, in whole or in part, at the option of the Company on a specified date or dates prior to such Maturity Date, at a price or prices specified above, together with interest accrued to the date of redemption. If this Note is redeemable prior to Maturity, the Company may redeem this Note either in whole or from time to time in part by mailing notice to the Holder of such redemption by first class mail at least 30 days and not more than 60 days prior to the date fixed for redemption. If fewer than all of the Notes of like terms are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by such method as the Trustee shall deem fair and appropriate.
This Note indicates either (i) that this Note cannot be repaid at the option of the Holder prior to the Maturity Date or (ii) that this Note shall be repayable at the option of the Holder on a date or dates specified prior to the Maturity Date, at a price or prices specified above, together with interest accrued to the date of repayment.
In order for this Note to be repaid at the option of the Holder, the Company must receive, at least 30 days but not more than 45 days prior to the repayment date, this Note with the form entitled "Option to Elect Repayment" hereon duly completed. Exercise of the repayment option by the Holder shall be irrevocable, except as otherwise described above. The repayment option may be exercised by the Holder for less than the aggregate principal amount of the Note then outstanding, provided that the principal amount of the Note remaining outstanding after repayment is an authorized denomination.
The Depository's nominee will be the Holder and therefore will be the only entity that can exercise a right of repayment. In order to ensure that the Depository's nominee will timely exercise a right to repayment with respect to a particular beneficial interest in a Global Note, the beneficial owner ("Beneficial Owner") of such interest must instruct the broker or other participant through which it holds a beneficial interest in such Global Note to notify the Depository of its desire to exercise a right to repayment. Each Beneficial Owner should consult the broker or other participant through which it holds a beneficial interest in this Note in order to ascertain the deadline by which
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FIXED RATE
such an instruction must be given in order for notice to be timely delivered by such broker or other participant to the Depository.
This Note is issuable in global or definitive registered form without coupons in the denominations indicated above. Upon due presentment for registration of transfer of this Note at the principal office of the Trustee, a new Note or Notes in an equal aggregate principal amount and like interest rate and Maturity Date shall be issued to the transferee in exchange therefor, subject to the limitations provided in the Indenture, without charge except for any tax or other governmental charge imposed in connection therewith.
The Company may at any time purchase Notes at any price or prices in the open market or otherwise. Notes so purchased by the Company may be held or resold or, at the discretion of the Company, surrendered to the Trustee for cancellation.
In case an Event of Default, as defined in the Indenture, with respect to the Notes shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration shall become, due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.
With respect to a Note issued with an original issue discount, if an Event of Default with respect to the Notes shall have occurred and be continuing, the amount of principal of this Note which may be declared due and payable, with the effect and subject to the conditions provided in the Indenture, shall be determined in the manner specified under "OID Default Amount" above.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the places, at the respective times and at the rate herein prescribed.
The Company, the Trustee, and any agent of the Company or the Trustee may deem and treat the Holder hereof as the absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notation of ownership or other writing hereon) for the purposes of receiving payment of or on account of the principal hereof and subject to the provisions above, interest hereon, and for all purposes and neither the Company nor the Trustee nor any such agent shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the interest on this Note or for any claims based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, shareholder, officer or director as such, past, present or future of the Company or of any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liabilities being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the holders of not less than 51% in aggregate principal amount of the Securities at the time outstanding of all series to be affected thereby (voting as one class). The Indenture also contains provisions permitting the holders of a majority in aggregate principal amount of all of the Securities of each affected series at the time outstanding, on behalf of all holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FIXED RATE
Holder shall be conclusive and binding upon the Holder and upon all future holders of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
Terms used herein which are defined in the Indenture shall have the respective meanings assigned thereto in the Indenture.
This Note shall be governed by and construed in accordance with the laws of the State of New York.
This Note shall not be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by the Trustee under the Indenture referred to below.
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FIXED RATE
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.
Dated:
UGI UTILITIES, INC.
By: _________________________________________
Vice President
[SEAL]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION:
This is one of the Securities
of the series designated herein
and referred to in the within-
mentioned Indenture.
FIRST UNION NATIONAL BANK,
as Trustee
By:___________________________
Authorized Officer
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FIXED RATE
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS NOTE IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHTS
For this Option to Elect Repayment to be effective, the Company must receive at the address of the Paying Agent specified therein or at such other place or places of which the Company shall from time to time notify the holder of the within Note (the "Holder"), at least 30 days but not more than 45 days, or if such day is not a Business Day, the next succeeding Business Day, prior to the repayment date, this Note, with this "Option to Elect Repayment" form duly completed.
If less than the entire principal amount of the within Note is to be repaid, specify the portion thereof (which shall be an Authorized Denomination) which the Holder elects to have repaid: ______________________; and specify the denomination or denominations (which shall be an Authorized Denomination) of the Note or Notes to be issued to the Holder for the portion of the within Note not being repaid (in the absence of any such specification, one such Note shall be issued for the portion not being repaid): _________________
Date:_______________ __________________________________
Notice: The signature to this
Option to Elect Repayment must
correspond with the name as written
upon the Note in every particular
without alteration or enlargement
or any other change whatsoever.
|
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as
tenants in common
|
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
Please Insert Social Security or
Other Identifying Number of Assignee
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatever.
Exhibit (4)(ii)
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE REGISTERED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, 55 WATER STREET, NEW YORK, NEW YORK ("DTC"), OR SUCH OTHER DEPOSITORY AS SPECIFIED BELOW (DTC OR SUCH OTHER DEPOSITORY BEING THE "DEPOSITORY") TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY THAT IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
CUSIP NO. PRINCIPAL AMOUNT: $
REGISTERED NO. FLR -
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
INITIAL INTEREST RATE: ORIGINAL ISSUE DATE: MATURITY DATE:
INITIAL INTEREST PERIOD: BASE RATE: (IF LIBOR INTEREST RESET PERIOD:
TELERATE OR LIBOR REUTERS
SPECIFY CURRENCY)
INTEREST RESET DATES: INTEREST PAYMENT SPREAD:
SPREAD:
SPREAD MULTIPLIER: INTEREST REGULAR RECORD DATE:
DETERMINATION DATE:
OPTIONAL RESET DATE: MAXIMUM INTEREST MINIMUM INTEREST RATE:
RATE:
|
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
SPREAD RESET: SPREAD MULTIPLIER AUTHORIZED
RESET: DENOMINATION: $100,000,
AND INCREMENTS OF $1,000
THEREAFTER
AMORTIZING OR INDEX INDEX MATURITY: ORIGINAL ISSUE DISCOUNT
NOTE: NOTE:
YIELD TO MATURITY: INITIAL ACCRUAL PERIOD OID DEFAULT AMOUNT:
(ONLY APPLICABLE IF OID COMPUTED UNDER (ONLY APPLICABLE IF NOTE
NOTE ISSUED AT (__APPROXIMATE) (__EXACT) ISSUED AT ORIGINAL
ORIGINAL ISSUE DISCOUNT) METHOD: ISSUE DISCOUNT)
ISSUE PRICE IF OTHER REPAYMENT AT OPTION OF REDEMPTION AT OPTION
THAN THE FULL PRINCIPAL HOLDER: OF THE COMPANY:
AMOUNT:
CALCULATION AGENT IF DEPOSITORY IF OTHER PAYING AGENT IF OTHER
OTHER THAN FIRST UNION THAN DEPOSITORY TRUST THAN FIRST UNION
NATIONAL BANK: COMPANY: NATIONAL BANK,
123 SOUTH BROAD STREET,
|
PHILADELPHIA, PA 19109:
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
Date, or to, but excluding, the Maturity Date or date of redemption or repayment, as the case may be. Subject to certain exceptions provided in the Indenture referred to below, the interest so payable on any Interest Payment Date shall be paid to the Person in whose name this Note is registered at the close of business on the Regular Record Date next preceding such Interest Payment Date, and interest payable on the Maturity Date or upon redemption or repayment shall be paid to the Person to whom said principal sum is payable. "Regular Record Date" shall mean, with respect to any Interest Payment Date, the date (whether or not a Business Day) 15 calendar days prior to such Interest Payment Date. "Business Day" shall mean, unless otherwise specified above, any day, other than a Saturday or Sunday, that meets each of the following applicable requirements: the day is (i) not a day on which banking institutions are authorized or required by law or regulation to be closed in The City of New York; and (ii) if this Note is a LIBOR Note, any day on which dealings in deposits in the currency specified above are transacted in the London interbank market.
Accrued interest on this Note shall be calculated by multiplying the principal amount of this Note (or, if this Note is an Indexed Note, the amount designated by the terms hereof) by an accrued interest factor. Such accrued interest factor shall be computed by adding the interest factors computed for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal calculated to seven decimal places, without rounding) for each day in such period shall be computed by dividing the applicable interest rate by 360 (in the case of CD Rate Notes, Commercial Paper Notes, Federal Funds Rate Notes, LIBOR Notes and Prime Rate Notes) or by the actual number of days in the relevant year (in the case of Treasury Notes).
This Note may provide above for either or both of the following (in each case expressed as a rate per annum on a simple interest basis): (i) a maximum limitation on the rate at which interest may accrue during any interest period ("Maximum Interest Rate") and (ii) a minimum limitation on the rate at which interest may accrue during any interest period ("Minimum Interest Rate"). In addition to any Maximum Interest Rate that may be applicable, the interest rate shall in no event be higher than the maximum rate permitted by applicable New York and United States Federal law.
All percentages resulting from any calculation of the interest rate on this Note shall be rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage point rounded upward, and all currency amounts used in or resulting from such calculation shall be rounded to the nearest one-hundredth of a dollar (with .005 of a dollar being rounded upward).
Payments of interest, if any, shall be made by the Paying Agent to the Depository in immediately available funds in accordance with existing arrangements between the Paying Agent and the Depository; payments of principal of and interest, if any, on the Maturity Date shall be made by the Paying Agent by wire transfer in immediately available funds to an account specified by the Depository.
The Company shall pay any administrative costs imposed by banks in connection with making payments in immediately available funds, but any tax, assessment or governmental charge imposed upon payments shall be borne by the Holder in respect of which such payments are made.
Any payment due on this Note on a day that is not a Business Day shall be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment; provided that, in the case of an Interest Payment Date with respect to a LIBOR Note, if such Business Day would fall in the succeeding calendar month, such payment shall be made on the Business Day immediately preceding such Interest Payment Date.
This Note is one of a duly authorized issue of Securities of the Company (hereinafter called the "Securities"), all issued or to be issued under and pursuant to an indenture dated as of August 1, 1993 (hereinafter called the "Indenture"), duly executed and delivered by the Company and First Union National Bank (formerly First Fidelity Bank, National Association), as Trustee (hereinafter, together with any successor trustee or trustees under the Indenture called
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
the "Trustee"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, obligations, duties and immunities thereunder of the Trustee, the Company, and the holders of the Securities. As provided in the Indenture, the Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest, if any, at different rates, may be subject to different redemption or repayment provisions, if any, may be subject to different sinking, purchase or analogous funds, if any, and may otherwise vary as provided for or permitted by the Indenture. This Note is one of a series of the Securities offered on a periodic basis by the Company, which series is unlimited in aggregate principal amount, designated as the Series B Medium-Term Notes (the "Notes") of the Company. The Notes may mature at different times (but in all instances more than nine months from their respective dates of issue), bear interest, if any, at different rates, be redeemable at the option of the Company at different times or not at all, and be repayable at the option of the Holder at different times or not at all.
The interest rate in effect from the Original Issue Date to but excluding the first Interest Reset Date shall be the Initial Interest Rate specified above. Subsequently, this Note shall bear interest for each Interest Reset Period at the interest rate determined by (i) adding to or subtracting from the Base Rate, the Spread specified above, if any, and/or (ii) multiplying the Base Rate by the Spread Multiplier specified above, if any, or (iii) any other specified Base Rate, in any case as specified above. The interest rate for an Interest Reset Period shall be the interest rate determined as of the immediately preceding Interest Determination Date. The "Interest Reset Period" pertaining to any Interest Reset Date is the period from and including such Interest Reset Date to but excluding the immediately succeeding Interest Reset Date, or the Date of Maturity, as the case may be. The "Interest Reset Date" means the date or dates as of which the interest rate shall be reset. The "Spread" is the number of basis points, and the "Spread Multiplier" is the percentage used to determine the interest rate. The Spread or Spread Multiplier may be subject to adjustment from time to time, if and to the extent specified above.
One of the following Base Rates shall be applicable to this Note as indicated above: (i) the CD Rate ("CD Rate Notes"), (ii) the Commercial Paper Rate ("Commercial Paper Rate Notes"), (iii) the Federal Funds Rate ("Federal Funds Rate Notes"), (iv) LIBOR ("LIBOR Notes"), (v) the Prime Rate ("Prime Rate Notes"), (vi) the Treasury Rate ("Treasury Rate Notes") or (vii) another Base Rate, as specified above.
The "Interest Determination Date" pertaining to an Interest Reset Period
(i) for CD Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes or
Prime Rate Notes shall be the second Business Day preceding the relevant
Interest Reset Date, (ii) for LIBOR Notes shall be the second London Banking Day
preceding the relevant Interest Reset Date and (iii) for Treasury Rate Notes
shall be the day of the week in which the relevant Interest Reset Date falls on
which treasury bills of the applicable Index Maturity are auctioned. If, as the
result of a legal holiday, a treasury bill auction is held on the Friday
preceding the Interest Reset Date, such Friday shall be the Interest
Determination Date.
The "Calculation Date", where applicable, pertaining to an Interest Determination Date shall be the earlier of (i) the tenth calendar day after such Interest Determination Date or, if any such day is not a Business Day, the next succeeding Business Day or (ii) the Business Day preceding the applicable Interest Payment Date or date of Maturity, as the case may be.
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
The "Calculation Agent" specified above has been appointed by the Company to calculate interest rates on this Note as specified above. All determinations of interest by the Calculation Agent shall, in the absence of manifest error, be conclusive for all purposes and binding on the Company and the Holder. Upon the request of any registered Holder or Beneficial Owner of this Note, the Calculation Agent for this Note shall provide, if determined, the interest rate then in effect and the interest rate that shall become effective on the next Interest Reset Date with respect to this Note.
CD Rate Notes, like other Notes, are not deposit obligations of a bank and are not insured by the Federal Deposit Insurance Corporation.
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
"Money Market Yield" shall be a yield calculated in accordance with the following formula:
D x 360
Money Market Yield = ----------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal, and "M" refers to the actual number of days in the applicable period for which interest is being calculated.
(1) The rate for deposits in United States dollars of the Index Maturity specified above, commencing on the second London Banking Day immediately following such Interest Determination Date, that appears on the Telerate Page 3750 as of 11:00 a.m., London time, on such Interest Determination Date ("LIBOR Telerate"). "Telerate Page 3750" means the display designated as Page "3750" on the Telerate Service (or such other page as may replace page 3750 on that service or such other service or services as may be designated by the British Bankers' Association for the purpose of displaying London interbank offered rates for U.S. dollar deposits).
(2) The arithmetic mean on the offered rates for deposits in U.S. dollars having the Index Maturity specified above, commencing on the second London Banking Day immediately following such Interest Determination Date, that appear on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on such Interest Determination Date, if at least two such offered rates appear on the Reuters Screen LIBO Page ("LIBOR Reuters"). "Reuters Screen LIBO Page" means the display designated as Page "LIBO" on the Reuters Monitor Money Rate Service (or such other page as may replace the LIBO page on that service for the purpose of displaying London interbank offered rates of major banks).
If the Base Rate specified above is "LIBOR," but neither LIBOR Telerate nor LIBOR Reuters is specified, LIBOR shall be determined as if LIBOR Telerate had been specified.
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
If this Note is a LIBOR Note and specifies that it is indexed to the offered rates for deposits in a Specified Currency other than United States Dollars, the method for determining such rates shall be specified above.
Determination of Interest Rate for Treasury Rate Notes. If the Base Rate specified above is "Treasury Rate," this Note shall bear interest for each Interest Reset Period at the interest rate calculated with reference to the Treasury
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
If this Note is an Original Issue Discount Note for United States federal income tax purposes, as specified above, then, except as otherwise specified above, upon redemption or repayment (except in the case of an Event of Default as set forth below) of this Note there shall be payable in lieu of the Principal Amount, an amount equal to the Amortized Face Amount of this Note. The "Amortized Face Amount," shall be equal to (a) the Issue Price, as specified above, plus (b) the portion of the difference between the Issue Price and the Principal Amount of this Note that has accrued at the Yield to Maturity specified above (computed in accordance with generally accepted United States bond yield computation principles) at the date as of which such Amortized Face Amount is calculated, but in no event shall the Amortized Face Amount exceed the Principal Amount.
Amortizing Notes are Notes as to which all or a portion of the principal amount is payable prior to the Maturity Date in accordance with a schedule, by application of a formula, or by reference to an Index. If this Note is an Amortizing Note, the terms and conditions, including the terms for payment hereof, shall be specified above.
Indexed Notes are Notes as to which all or certain interest payments ("Indexed Rate Notes") and/or the principal amount payable at Maturity ("Indexed Principal Notes") are determined by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities, either in the United States or foreign jurisdictions, or by such other objective price, economic or other measures as are specified above (each such price, economic or other measures as are specified above being an "Index"). If this Note is an Indexed Note, as specified above, a description of the Index used in any determination of interest and/or principal payments, and the method or formula by which interest or principal payments or both shall be determined by reference to such Index, is specified above.
If this Note is an Indexed Note, and if the determination of the Index specified above is calculated or announced by a third party (which may be First Union National Bank) and such third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated (other than changes consistent with the policies in effect at the time the related Indexed Note was issued and with permitted changes described above), then such Index shall be calculated for purposes of this Note by another third party (which may be First Union National Bank) selected by the Company, subject to the same conditions and controls as applied to the original third party. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then any indexed interest payments or indexed principal amount payable with respect to this Note
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
shall be calculated in the manner specified above. All determinations of such third party shall, in the absence of manifest error, be conclusive for all purposes and binding on the Company and the Holder.
This Note indicates whether the Company has the option with respect to such Note to reset the Spread or Spread Multiplier and, if so, the date or dates on which such Spread or Spread Multiplier, as the case may be, may be reset (each an "Optional Reset Date"). If the Company has such option with respect to this Note, the following procedures shall apply.
The Company may exercise such option with respect to this Note by notifying the Trustee of such exercise at least 50 but not more than 60 days prior to an Optional Reset Date. Not later than 40 days prior to such Optional Reset Date, the Trustee shall mail to the Holder a notice ("Reset Notice") setting forth (i) the election of the Company to reset the Spread or Spread Multiplier, (ii) such new Spread or Spread Multiplier and (iii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date or, if there is no such next Optional Reset Date, to the Maturity Date of this Note (each such period a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during such Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder, such new Spread or Spread Multiplier shall take effect automatically and, except as modified by the Reset Notice and as described in the next paragraph, this Note shall have the same terms as prior to the transmittal of such Reset Notice.
Notwithstanding the foregoing, the Company may, at its option, revoke the Spread or Spread Multiplier, as provided for in the Reset Notice, and establish a Spread or Spread Multiplier that is higher than the Spread or Spread Multiplier provided for in the relevant Reset Notice for the Subsequent Interest Period commencing on such Optional Reset Date, by causing the Trustee to mail, not later than 20 days prior to an Optional Reset Date, notice of such higher Spread or Spread Multiplier to the Holder. Such notice shall be irrevocable. The Company must notify the Trustee of its intentions to revoke such Reset Notice at least 25 days prior to such Optional Reset Date. If the Spread or Spread Multiplier is reset on an Optional Reset Date and the Holder has not tendered this Note for repayment (or has validly revoked any such tender) pursuant to the next succeeding paragraph, this Note shall bear such higher Spread or Spread Multiplier for the Subsequent Interest Period.
If the Company elects to reset the Spread or Spread Multiplier as described
above, the Holder has the option to elect repayment of this Note by the Company
on any Optional Reset Date at a price equal to the aggregate principal amount
hereof outstanding on, plus any interest accrued to, such Optional Reset Date.
In order for this Note to be so repaid on an Optional Reset Date, the Holder
must follow the procedures set forth below for optional repayment, except that
(i) the period for delivery of this Note or notification to the Trustee shall be
at least 25 but not more than 35 days prior to such Optional Reset Date and (ii)
a Holder who has tendered this Note for repayment pursuant to a Reset Notice
may, by written notice to the Trustee, revoke any such tender until the close of
business on the tenth day prior to such Optional Reset Date.
This Note indicates either (i) that such Note cannot be redeemed prior to its Maturity Date or (ii) that such Note shall be redeemable, in whole or in part, at the option of the Company on a specified date or dates prior to such Maturity Date, at a price or prices specified above, together with interest accrued to the date of redemption. If this Note is redeemable prior to Maturity, the Company may redeem this Note either in whole or from time to time in part by mailing notice to the Holder of such redemption by first class mail at least 30 days and not more than 60 days prior to the date fixed for redemption. If fewer than all of the Notes of like terms are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by such method as the Trustee shall deem fair and appropriate.
This Note indicates either (i) that this Note cannot be repaid at the option of the Holder prior to the Maturity Date or (ii) that this Note shall be repayable at the option of the Holder on a date or dates specified prior to the Maturity Date, at a price or prices specified above, together with interest accrued to the date of repayment.
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
In order for this Note to be repaid at the option of the Holder, the Company must receive, at least 30 days but not more than 45 days prior to the repayment date, this Note with the form entitled "Option to Elect Repayment" hereon duly completed. Exercise of the repayment option by the Holder shall be irrevocable, except as otherwise described above. The repayment option may be exercised by the Holder for less than the aggregate principal amount of the Note then outstanding, provided that the principal amount of the Note remaining outstanding after repayment is an authorized denomination.
The Depository's nominee will be the Holder and therefore will be the only entity that can exercise a right of repayment. In order to ensure that the Depository's nominee will timely exercise a right to repayment with respect to a particular beneficial interest in a Global Note, the beneficial owner ("Beneficial Owner") of such interest must instruct the broker or other participant through which it holds a beneficial interest in such Global Note to notify the Depository of its desire to exercise a right to repayment. Each Beneficial Owner should consult the broker or other participant through which it holds a beneficial interest in this Note in order to ascertain the deadline by which such an instruction must be given in order for notice to be timely delivered by such broker or other participant to the Depository.
The Notes are issuable in global or definitive registered form without coupons in the denominations indicated above. Upon due presentment for registration of transfer of this Note at the principal office of the Trustee, a new Note or Notes in an equal aggregate principal amount and like interest rate and Maturity Date shall be issued to the transferee in exchange therefor, subject to the limitations provided in the Indenture, without charge except for any tax or other governmental charge imposed in connection therewith.
The Company may at any time purchase Notes at any price or prices in the open market or otherwise. Notes so purchased by the Company may be held or resold or, at the discretion of the Company, surrendered to the Trustee for cancellation.
In case an Event of Default, as defined in the Indenture, with respect to the Notes shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration shall become, due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.
With respect to a Note issued with an original issue discount, if an Event of Default with respect to the Notes shall have occurred and be continuing, the amount of principal of this Note which may be declared due and payable, with the effect and subject to the conditions provided in the Indenture, shall be determined in the manner specified under "OID Default Amount" above.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the places, at the respective times and at the rate herein prescribed.
The Company, the Trustee, and any agent of the Company or the Trustee may deem and treat the Holder as the absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notation of ownership or other writing hereon) for the purposes of receiving payment of or on account of the principal hereof and subject to the provisions above, interest hereon, and for all purposes and neither the Company nor the Trustee nor any such agent shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the interest on this Note or for any claims based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, shareholder, officer or director as such, past, present or future of the Company or of any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
assessment or penalty or otherwise, all such liabilities being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the holders of not less than 51% in aggregate principal amount of the Securities at the time outstanding of all series to be affected thereby (voting as one class). The Indenture also contains provisions permitting the holders of a majority in aggregate principal amount of all of the Securities of each affected series at the time outstanding, on behalf of all holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder shall be conclusive and binding upon the Holder and upon all future Holders and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
Terms used herein which are defined in the Indenture shall have the respective meanings assigned thereto in the Indenture.
This Note shall be governed by and construed in accordance with the laws of the State of New York.
This Note shall not be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by the Trustee under the Indenture referred to below.
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.
Dated:
UGI UTILITIES, INC.
[SEAL]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION:
This is one of the Securities
of the series designated herein
and referred to in the within-
mentioned Indenture.
FIRST UNION NATIONAL BANK,
as Trustee
By:_______________________
Authorized Officer
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS NOTE IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHTS
For this Option to Elect Repayment to be effective, the Company must receive at the address of the Paying Agent specified therein or at such other place or places of which the Company shall from time to time notify the holder of the within Note (the "Holder"), at least 30 days but not more than 45 days, or if such day is not a Business Day, the next succeeding Business Day, prior to the repayment date, this Note, with this "Option to Elect Repayment" form duly completed.
If less than the entire principal amount of the within Note is to be repaid, specify the portion thereof (which shall be an Authorized Denomination) which the Holder elects to have repaid: ______________________; and specify the denomination or denominations (which shall be an Authorized Denomination) of the Note or Notes to be issued to the Holder for the portion of the within Note not being repaid (in the absence of any such specification, one such Note shall be issued for the portion not being repaid): ______________________________________
Date:_____________________ ________________________________________
Notice: The signature to this Option to
Elect Repayment must correspond with the
name as written upon the Note in every
particular without alteration or
enlargement or any other change
whatsoever.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as
tenants in common
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UNIF GIFT MIN ACT -- ______________ Custodian___________
(Cust) (Minor)
Under Uniform Gifts to Minors Act
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
Please Insert Social Security or
Other Identifying Number of Assignee
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatever.
Exhibit (4)(iii)
CALCULATION AGENT AGREEMENT
This Agreement (the "Agreement") dated as of August 1, 1996, is made between UGI Utilities, Inc. (the "Company") and First Union National Bank ("First Union").
The Company proposes to issue and sell its Series B Medium-Term Notes (the "Notes") pursuant to an Indenture dated as of August 1, 1993, between the Company and First Union, as Trustee, as supplemented by a Resolution of the Board of Directors of the Company dated July 30, 1996 (the "Indenture"), in an aggregate initial offering price of up to $75,000,000. The Company desires to appoint First Union as Calculation Agent with respect to the Notes to be issued under the Indenture and First Union is willing to accept the appointment upon the following terms and conditions:
1. The Company hereby appoints First Union as Calculation Agent (the "Agent") with respect to the Notes, and the Agent hereby accepts such appointment and agrees to perform the duties and obligations of Calculation Agent set forth in the form of Floating Rate Notes providing for floating interest rates attached hereto as Exhibit A.
2. The Company shall pay all fees (as established in a separate letter agreement between the Company and the Agent), charges and out-of-pocket expenses (including reasonable legal fees and expenses) of the Agent for acting under and pursuant to this Agreement. In addition, the Company shall indemnify and hold harmless the Agent and its officers, employees and agents from and against any and all losses, costs, charges, expenses, judgments and liabilities of the Company or third parties arising out if its acceptance, performance or administration of this Agreement and the transactions contemplated hereby, provided, however, that such indemnification shall not apply to any such losses, costs, charges, expenses, judgments or liabilities caused by the negligence or willful misconduct of the Agent or its officers, employees or agents. The provisions of this paragraph 2 shall survive the termination of this Agreement.
3. The duties and obligations of the Agent shall be determined solely by the express provisions of this Agreement, the Indenture and the Floating Rate Notes, and no implied covenants or obligations shall be read into any of such documents against the Agent; and in the absence of negligence or willful misconduct on the part of the Agent, the Agent may conclusively rely, as to the truth of the statements expressed therein, upon any documents furnished to the Agent and conforming to the requirements of this Agreement (including Exhibit A hereto) and the Indenture, and the Agent may rely and shall be protected in acting upon any document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Agent shall not be liable for (i) any error resulting from the use of or reliance on a source or publication required to be used under the Indenture or this Agreement (including Exhibit A hereto) (ii) any error of judgment made in good faith by a responsible officer or officers of the Agent unless the Agent was negligent in ascertaining the pertinent facts. No party shall be liable for any default resulting from force majeure, which shall be deemed to include any circumstances beyond the reasonable control of the party affected.
4. In acting under this Agreement the Agent is acting solely as agent of the Company and does not assume any obligation toward, or any relationship of agency or trust for or with, any third party.
5. This Agreement shall become effective upon execution by the parties hereto. The Agent may at any time resign or be removed as Agent on not less than 60 days prior written notice; provided, however, that such resignation or removal shall take effect only upon the appointment by the Company of a successor Agent and the acceptance of such appointment by such successor Agent. If no successor Agent shall have been so appointed and have accepted appointment within sixty (60) days after such notice of termination is given, the resigning Agent may petition any court of competent jurisdiction for the appointment of a successor Agent. Such court may thereupon, after such notice, if any, as it may deem proper, appoint a successor Agent. Notwithstanding the foregoing, if the Agent and the Trustee are the same entity, and if the Trustee is resigning or being removed, termination of this Agreement shall become effective no later than the effective date of the resignation or removal, as the case may be, of the Trustee.
6. Upon termination of this Agreement by either party pursuant to the provisions of Section 5 or otherwise, the Agent shall be entitled to the payment of any compensation owed to it by the Company hereunder and to the reimbursement of all reasonable out-of-pocket expenses incurred in connection with all services rendered by it hereunder, as provided by Section 2 hereof and the Company's obligation to make such payment and reimbursement shall survive such termination. The provisions of Section 2, 3, 4 and 9 hereof shall remain in effect following such termination.
7. In the event of the termination of this Agreement pursuant to Section 5 hereof, the Company shall promptly appoint a successor Agent. Any successor Agent appointed by the Company following termination of this Agreement pursuant to the provisions of section 5 hereof shall execute and deliver to the original Agent, the Company and the Trustee an instrument accepting such appointment.
8. All notices, demands and formal actions under this Agreement shall be by telephone, telecopier, telegram or other communications device, promptly confirmed in writing and mailed or delivered to:
The Agent:
First Union National Bank
123 South Broad Street
Philadelphia, Pennsylvania 19109
Attention: Corporate Trust Department
PA 1249
The Company:
UGI Utilities, Inc.
100 Kachel Boulevard
Green Hills Corporate Center
Suite 400
P.O. Box 12677
Reading, Pennsylvania 19612-2677
Telephone: (610) 796-3400
Attention: General Counsel
The parties may, by written notice given under this Agreement, designate other addresses to which subsequent notices, requests, reports or other communications shall be directed.
9. This Agreement shall inure to the benefit of and be binding upon the Agent and the Company, and their respective successors and assigns, and shall not confer any rights upon any other person, partnership, association or corporation other than (for purposes only of paragraph 2 hereof) officers, employees and agents of the Agent. The terms "successors" and "assigns" shall not include any person, partnership, association or corporation in its capacity as a purchaser of any Note.
10. If any provision of this Agreement shall be held or deemed to be, or shall, in fact, be, invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions, or in all jurisdictions, because it conflicts with any provisions of any constitution, statute or rule of public policy, or for any other reason, such circumstances shall not have the effect of rendering any provision or provisions of this Agreement invalid, inoperative or unenforceable in any other case or circumstances, or of rendering any other provision or provisions of this Agreement invalid, inoperative or unenforceable to any extent whatsoever.
11. This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document.
12. The terms of this Agreement shall not be waived, altered, modified, amended or supplemented in any manner whatsoever except by written instrument signed by the parties hereto.
13. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.
14. Capitalized terms used herein have the meanings set forth in the Indenture.
IN WITNESS WHEREOF, the undersigned have hereunder set their hands as of the date first above written.
UGI UTILITIES, INC.
By: __________________________
Title: Vice President
FIRST UNION NATIONAL BANK
as Agent
By: __________________________
Title:
EXHIBIT A
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE REGISTERED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, 55 WATER STREET, NEW YORK, NEW YORK ("DTC"), OR SUCH OTHER DEPOSITORY AS SPECIFIED BELOW (DTC OR SUCH OTHER DEPOSITORY BEING THE "DEPOSITORY") TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY THAT IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
CUSIP NO. PRINCIPAL AMOUNT: $
REGISTERED NO. FLR -
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
INITIAL INTEREST RATE: ORIGINAL ISSUE DATE: MATURITY DATE:
INITIAL INTEREST PERIOD: BASE RATE: (IF LIBOR INTEREST RESET PERIOD:
TELERATE OR LIBOR REUTERS
SPECIFY CURRENCY)
INTEREST RESET DATES: INTEREST PAYMENT SPREAD:
SPREAD:
SPREAD MULTIPLIER: INTEREST REGULAR RECORD DATE:
DETERMINATION DATE:
OPTIONAL RESET DATE: MAXIMUM INTEREST MINIMUM INTEREST RATE:
|
RATE:
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
SPREAD RESET: SPREAD MULTIPLIER AUTHORIZED
RESET: DENOMINATION: $100,000,
and increments of $1,000
thereafter
AMORTIZING OR INDEX INDEX MATURITY: ORIGINAL ISSUE DISCOUNT
NOTE: NOTE:
YIELD TO MATURITY: INITIAL ACCRUAL PERIOD OID DEFAULT AMOUNT:
(ONLY APPLICABLE IF OID COMPUTED UNDER (ONLY APPLICABLE IF NOTE
NOTE ISSUED AT (__APPROXIMATE) (__EXACT) ISSUED AT ORIGINAL
ORIGINAL ISSUE DISCOUNT) METHOD: ISSUE DISCOUNT)
ISSUE PRICE IF OTHER REPAYMENT AT OPTION OF REDEMPTION AT OPTION
THAN THE FULL PRINCIPAL HOLDER: OF THE COMPANY:
AMOUNT:
CALCULATION AGENT IF DEPOSITORY IF OTHER PAYING AGENT IF OTHER
OTHER THAN FIRST UNION THAN DEPOSITORY TRUST THAN FIRST UNION
NATIONAL BANK: COMPANY: NATIONAL BANK,
123 SOUTH BROAD STREET,
|
PHILADELPHIA, PA 19109:
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
Date, or to, but excluding, the Maturity Date or date of redemption or repayment, as the case may be. Subject to certain exceptions provided in the Indenture referred to below, the interest so payable on any Interest Payment Date shall be paid to the Person in whose name this Note is registered at the close of business on the Regular Record Date next preceding such Interest Payment Date, and interest payable on the Maturity Date or upon redemption or repayment shall be paid to the Person to whom said principal sum is payable. "Regular Record Date" shall mean, with respect to any Interest Payment Date, the date (whether or not a Business Day) 15 calendar days prior to such Interest Payment Date. "Business Day" shall mean, unless otherwise specified above, any day, other than a Saturday or Sunday, that meets each of the following applicable requirements: the day is (i) not a day on which banking institutions are authorized or required by law or regulation to be closed in The City of New York; and (ii) if this Note is a LIBOR Note, any day on which dealings in deposits in the currency specified above are transacted in the London interbank market.
Accrued interest on this Note shall be calculated by multiplying the principal amount of this Note (or, if this Note is an Indexed Note, the amount designated by the terms hereof) by an accrued interest factor. Such accrued interest factor shall be computed by adding the interest factors computed for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal calculated to seven decimal places, without rounding) for each day in such period shall be computed by dividing the applicable interest rate by 360 (in the case of CD Rate Notes, Commercial Paper Notes, Federal Funds Rate Notes, LIBOR Notes and Prime Rate Notes) or by the actual number of days in the relevant year (in the case of Treasury Notes).
This Note may provide above for either or both of the following (in each case expressed as a rate per annum on a simple interest basis): (i) a maximum limitation on the rate at which interest may accrue during any interest period ("Maximum Interest Rate") and (ii) a minimum limitation on the rate at which interest may accrue during any interest period ("Minimum Interest Rate"). In addition to any Maximum Interest Rate that may be applicable, the interest rate shall in no event be higher than the maximum rate permitted by applicable New York and United States Federal law.
All percentages resulting from any calculation of the interest rate on this Note shall be rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage point rounded upward, and all currency amounts used in or resulting from such calculation shall be rounded to the nearest one-hundredth of a dollar (with .005 of a dollar being rounded upward).
Payments of interest, if any, shall be made by the Paying Agent to the Depository in immediately available funds in accordance with existing arrangements between the Paying Agent and the Depository; payments of principal of and interest, if any, on the Maturity Date shall be made by the Paying Agent by wire transfer in immediately available funds to an account specified by the Depository.
The Company shall pay any administrative costs imposed by banks in connection with making payments in immediately available funds, but any tax, assessment or governmental charge imposed upon payments shall be borne by the Holder in respect of which such payments are made.
Any payment due on this Note on a day that is not a Business Day shall be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest shall accrue as a result of such delayed payment; provided that, in the case of an Interest Payment Date with respect to a LIBOR Note, if such Business Day would fall in the succeeding calendar month, such payment shall be made on the Business Day immediately preceding such Interest Payment Date.
This Note is one of a duly authorized issue of Securities of the Company (hereinafter called the "Securities"), all issued or to be issued under and pursuant to an indenture dated as of August 1, 1993 (hereinafter called the "Indenture"), duly executed and delivered by the Company and First Union National Bank (formerly First Fidelity Bank, National Association), as Trustee (hereinafter, together with any successor trustee or trustees under the Indenture called
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
the "Trustee"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, obligations, duties and immunities thereunder of the Trustee, the Company, and the holders of the Securities. As provided in the Indenture, the Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest, if any, at different rates, may be subject to different redemption or repayment provisions, if any, may be subject to different sinking, purchase or analogous funds, if any, and may otherwise vary as provided for or permitted by the Indenture. This Note is one of a series of the Securities offered on a periodic basis by the Company, which series is unlimited in aggregate principal amount, designated as the Series B Medium-Term Notes (the "Notes") of the Company. The Notes may mature at different times (but in all instances more than nine months from their respective dates of issue), bear interest, if any, at different rates, be redeemable at the option of the Company at different times or not at all, and be repayable at the option of the Holder at different times or not at all.
The interest rate in effect from the Original Issue Date to but excluding the first Interest Reset Date shall be the Initial Interest Rate specified above. Subsequently, this Note shall bear interest for each Interest Reset Period at the interest rate determined by (i) adding to or subtracting from the Base Rate, the Spread specified above, if any, and/or (ii) multiplying the Base Rate by the Spread Multiplier specified above, if any, or (iii) any other specified Base Rate, in any case as specified above. The interest rate for an Interest Reset Period shall be the interest rate determined as of the immediately preceding Interest Determination Date. The "Interest Reset Period" pertaining to any Interest Reset Date is the period from and including such Interest Reset Date to but excluding the immediately succeeding Interest Reset Date, or the Date of Maturity, as the case may be. The "Interest Reset Date" means the date or dates as of which the interest rate shall be reset. The "Spread" is the number of basis points, and the "Spread Multiplier" is the percentage used to determine the interest rate. The Spread or Spread Multiplier may be subject to adjustment from time to time, if and to the extent specified above.
One of the following Base Rates shall be applicable to this Note as indicated above: (i) the CD Rate ("CD Rate Notes"), (ii) the Commercial Paper Rate ("Commercial Paper Rate Notes"), (iii) the Federal Funds Rate ("Federal Funds Rate Notes"), (iv) LIBOR ("LIBOR Notes"), (v) the Prime Rate ("Prime Rate Notes"), (vi) the Treasury Rate ("Treasury Rate Notes") or (vii) another Base Rate, as specified above.
The "Interest Determination Date" pertaining to an Interest Reset Period
(i) for CD Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes or
Prime Rate Notes shall be the second Business Day preceding the relevant
Interest Reset Date, (ii) for LIBOR Notes shall be the second London Banking Day
preceding the relevant Interest Reset Date and (iii) for Treasury Rate Notes
shall be the day of the week in which the relevant Interest Reset Date falls on
which treasury bills of the applicable Index Maturity are auctioned. If, as the
result of a legal holiday, a treasury bill auction is held on the Friday
preceding the Interest Reset Date, such Friday shall be the Interest
Determination Date.
The "Calculation Date", where applicable, pertaining to an Interest Determination Date shall be the earlier of (i) the tenth calendar day after such Interest Determination Date or, if any such day is not a Business Day, the next succeeding Business Day or (ii) the Business Day preceding the applicable Interest Payment Date or date of Maturity, as the case may be.
The "Calculation Agent" specified above has been appointed by the Company to calculate interest rates on this
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
Note as specified above. All determinations of interest by the Calculation Agent shall, in the absence of manifest error, be conclusive for all purposes and binding on the Company and the Holder. Upon the request of any registered Holder or Beneficial Owner of this Note, the Calculation Agent for this Note shall provide, if determined, the interest rate then in effect and the interest rate that shall become effective on the next Interest Reset Date with respect to this Note.
CD Rate Notes, like other Notes, are not deposit obligations of a bank and are not insured by the Federal Deposit Insurance Corporation.
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
"Money Market Yield" shall be a yield calculated in accordance with the following formula:
D x 360
Money Market Yield = ------------------ x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal, and "M" refers to the actual number of days in the applicable period for which interest is being calculated.
(1) The rate for deposits in United States dollars of the Index Maturity specified above, commencing on the second London Banking Day immediately following such Interest Determination Date, that appears on the Telerate Page 3750 as of 11:00 a.m., London time, on such Interest Determination Date ("LIBOR Telerate"). "Telerate Page 3750" means the display designated as Page "3750" on the Telerate Service (or such other page as may replace page 3750 on that service or such other service or services as may be designated by the British Bankers' Association for the purpose of displaying London interbank offered rates for U.S. dollar deposits).
(2) The arithmetic mean on the offered rates for deposits in U.S. dollars having the Index Maturity specified above, commencing on the second London Banking Day immediately following such Interest Determination Date, that appear on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on such Interest Determination Date, if at least two such offered rates appear on the Reuters Screen LIBO Page ("LIBOR Reuters"). "Reuters Screen LIBO Page" means the display designated as Page "LIBO" on the Reuters Monitor Money Rate Service (or such other page as may replace the LIBO page on that service for the purpose of displaying London interbank offered rates of major banks).
If the Base Rate specified above is "LIBOR," but neither LIBOR Telerate nor LIBOR Reuters is specified, LIBOR shall be determined as if LIBOR Telerate had been specified.
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
If this Note is a LIBOR Note and specifies that it is indexed to the offered rates for deposits in a Specified Currency other than United States Dollars, the method for determining such rates shall be specified above.
Determination of Interest Rate for Treasury Rate Notes. If the Base Rate specified above is "Treasury Rate," this Note shall bear interest for each Interest Reset Period at the interest rate calculated with reference to the Treasury
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
If this Note is an Original Issue Discount Note for United States federal income tax purposes, as specified above, then, except as otherwise specified above, upon redemption or repayment (except in the case of an Event of Default as set forth below) of this Note there shall be payable in lieu of the Principal Amount, an amount equal to the Amortized Face Amount of this Note. The "Amortized Face Amount," shall be equal to (a) the Issue Price, as specified above, plus (b) the portion of the difference between the Issue Price and the Principal Amount of this Note that has accrued at the Yield to Maturity specified above (computed in accordance with generally accepted United States bond yield computation principles) at the date as of which such Amortized Face Amount is calculated, but in no event shall the Amortized Face Amount exceed the Principal Amount.
Amortizing Notes are Notes as to which all or a portion of the principal amount is payable prior to the Maturity Date in accordance with a schedule, by application of a formula, or by reference to an Index. If this Note is an Amortizing Note, the terms and conditions, including the terms for payment hereof, shall be specified above.
Indexed Notes are Notes as to which all or certain interest payments ("Indexed Rate Notes") and/or the principal amount payable at Maturity ("Indexed Principal Notes") are determined by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities, either in the United States or foreign jurisdictions, or by such other objective price, economic or other measures as are specified above (each such price, economic or other measures as are specified above being an "Index"). If this Note is an Indexed Note, as specified above, a description of the Index used in any determination of interest and/or principal payments, and the method or formula by which interest or principal payments or both shall be determined by reference to such Index, is specified above.
If this Note is an Indexed Note, and if the determination of the Index specified above is calculated or announced by a third party (which may be First Union National Bank) and such third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated (other than changes consistent with the policies in effect at the time the related Indexed Note was issued and with permitted changes described above), then such Index shall be calculated for purposes of this Note by another third party (which may be First Union National Bank) selected by the Company, subject to the same conditions and controls as applied to the original third party. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then any indexed interest payments or indexed principal amount payable with respect to this Note
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
shall be calculated in the manner specified above. All determinations of such third party shall, in the absence of manifest error, be conclusive for all purposes and binding on the Company and the Holder.
This Note indicates whether the Company has the option with respect to such Note to reset the Spread or Spread Multiplier and, if so, the date or dates on which such Spread or Spread Multiplier, as the case may be, may be reset (each an "Optional Reset Date"). If the Company has such option with respect to this Note, the following procedures shall apply.
The Company may exercise such option with respect to this Note by notifying the Trustee of such exercise at least 50 but not more than 60 days prior to an Optional Reset Date. Not later than 40 days prior to such Optional Reset Date, the Trustee shall mail to the Holder a notice ("Reset Notice") setting forth (i) the election of the Company to reset the Spread or Spread Multiplier, (ii) such new Spread or Spread Multiplier and (iii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date or, if there is no such next Optional Reset Date, to the Maturity Date of this Note (each such period a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during such Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the Holder, such new Spread or Spread Multiplier shall take effect automatically and, except as modified by the Reset Notice and as described in the next paragraph, this Note shall have the same terms as prior to the transmittal of such Reset Notice.
Notwithstanding the foregoing, the Company may, at its option, revoke the Spread or Spread Multiplier, as provided for in the Reset Notice, and establish a Spread or Spread Multiplier that is higher than the Spread or Spread Multiplier provided for in the relevant Reset Notice for the Subsequent Interest Period commencing on such Optional Reset Date, by causing the Trustee to mail, not later than 20 days prior to an Optional Reset Date, notice of such higher Spread or Spread Multiplier to the Holder. Such notice shall be irrevocable. The Company must notify the Trustee of its intentions to revoke such Reset Notice at least 25 days prior to such Optional Reset Date. If the Spread or Spread Multiplier is reset on an Optional Reset Date and the Holder has not tendered this Note for repayment (or has validly revoked any such tender) pursuant to the next succeeding paragraph, this Note shall bear such higher Spread or Spread Multiplier for the Subsequent Interest Period.
If the Company elects to reset the Spread or Spread Multiplier as described
above, the Holder has the option to elect repayment of this Note by the Company
on any Optional Reset Date at a price equal to the aggregate principal amount
hereof outstanding on, plus any interest accrued to, such Optional Reset Date.
In order for this Note to be so repaid on an Optional Reset Date, the Holder
must follow the procedures set forth below for optional repayment, except that
(i) the period for delivery of this Note or notification to the Trustee shall be
at least 25 but not more than 35 days prior to such Optional Reset Date and (ii)
a Holder who has tendered this Note for repayment pursuant to a Reset Notice
may, by written notice to the Trustee, revoke any such tender until the close of
business on the tenth day prior to such Optional Reset Date.
This Note indicates either (i) that such Note cannot be redeemed prior to its Maturity Date or (ii) that such Note shall be redeemable, in whole or in part, at the option of the Company on a specified date or dates prior to such Maturity Date, at a price or prices specified above, together with interest accrued to the date of redemption. If this Note is redeemable prior to Maturity, the Company may redeem this Note either in whole or from time to time in part by mailing notice to the Holder of such redemption by first class mail at least 30 days and not more than 60 days prior to the date fixed for redemption. If fewer than all of the Notes of like terms are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by such method as the Trustee shall deem fair and appropriate.
This Note indicates either (i) that this Note cannot be repaid at the option of the Holder prior to the Maturity Date or (ii) that this Note shall be repayable at the option of the Holder on a date or dates specified prior to the Maturity Date, at a price or prices specified above, together with interest accrued to the date of repayment.
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
In order for this Note to be repaid at the option of the Holder, the Company must receive, at least 30 days but not more than 45 days prior to the repayment date, this Note with the form entitled "Option to Elect Repayment" hereon duly completed. Exercise of the repayment option by the Holder shall be irrevocable, except as otherwise described above. The repayment option may be exercised by the Holder for less than the aggregate principal amount of the Note then outstanding, provided that the principal amount of the Note remaining outstanding after repayment is an authorized denomination.
The Depository's nominee will be the Holder and therefore will be the only entity that can exercise a right of repayment. In order to ensure that the Depository's nominee will timely exercise a right to repayment with respect to a particular beneficial interest in a Global Note, the beneficial owner ("Beneficial Owner") of such interest must instruct the broker or other participant through which it holds a beneficial interest in such Global Note to notify the Depository of its desire to exercise a right to repayment. Each Beneficial Owner should consult the broker or other participant through which it holds a beneficial interest in this Note in order to ascertain the deadline by which such an instruction must be given in order for notice to be timely delivered by such broker or other participant to the Depository.
The Notes are issuable in global or definitive registered form without coupons in the denominations indicated above. Upon due presentment for registration of transfer of this Note at the principal office of the Trustee, a new Note or Notes in an equal aggregate principal amount and like interest rate and Maturity Date shall be issued to the transferee in exchange therefor, subject to the limitations provided in the Indenture, without charge except for any tax or other governmental charge imposed in connection therewith.
The Company may at any time purchase Notes at any price or prices in the open market or otherwise. Notes so purchased by the Company may be held or resold or, at the discretion of the Company, surrendered to the Trustee for cancellation.
In case an Event of Default, as defined in the Indenture, with respect to the Notes shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration shall become, due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.
With respect to a Note issued with an original issue discount, if an Event of Default with respect to the Notes shall have occurred and be continuing, the amount of principal of this Note which may be declared due and payable, with the effect and subject to the conditions provided in the Indenture, shall be determined in the manner specified under "OID Default Amount" above.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the places, at the respective times and at the rate herein prescribed.
The Company, the Trustee, and any agent of the Company or the Trustee may deem and treat the Holder as the absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notation of ownership or other writing hereon) for the purposes of receiving payment of or on account of the principal hereof and subject to the provisions above, interest hereon, and for all purposes and neither the Company nor the Trustee nor any such agent shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the interest on this Note or for any claims based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, shareholder, officer or director as such, past, present or future of the Company or of any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liabilities being, by the acceptance hereof and as part of the consideration
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
for the issue hereof, expressly waived and released.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the holders of not less than 51% in aggregate principal amount of the Securities at the time outstanding of all series to be affected thereby (voting as one class). The Indenture also contains provisions permitting the holders of a majority in aggregate principal amount of all of the Securities of each affected series at the time outstanding, on behalf of all holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder shall be conclusive and binding upon the Holder and upon all future Holders and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
Terms used herein which are defined in the Indenture shall have the respective meanings assigned thereto in the Indenture.
This Note shall be governed by and construed in accordance with the laws of the State of New York.
This Note shall not be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by the Trustee under the Indenture referred to below.
UGI UTILITIES, INC.
GLOBAL SERIES B MEDIUM-TERM NOTE
FLOATING RATE
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.
Dated:
UGI UTILITIES, INC.
By: ____________________________________
Vice President
[SEAL]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION:
This is one of the Securities
of the series designated herein
and referred to in the within-
mentioned Indenture.
FIRST UNION NATIONAL BANK,
as Trustee
By:_______________________
Authorized Officer
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS NOTE IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHTS
For this Option to Elect Repayment to be effective, the Company must receive at the address of the Paying Agent specified therein or at such other place or places of which the Company shall from time to time notify the holder of the within Note (the "Holder"), at least 30 days but not more than 45 days, or if such day is not a Business Day, the next succeeding Business Day, prior to the repayment date, this Note, with this "Option to Elect Repayment" form duly completed.
Date:_____________________ _______________________________________
Notice: The signature to this Option
to Elect Repayment must correspond with
the name as written upon the Note in
every particular without alteration or
enlargement or any other change
whatsoever.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as
tenants in common
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Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
Please Insert Social Security or
Other Identifying Number of Assignee
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
the within Note of UGI UTILITIES, INC. and does hereby irrevocably constitute and appoint ____________________________________________________________________ ______________________________________________ attorney to transfer the said Note on the books of the Company, with full power of substitution in the premises.
NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatever.
Exhibit (4)(iv)
UGI UTILITIES, INC.
SERIES B MEDIUM-TERM NOTES
OFFICERS' CERTIFICATE
PURSUANT TO SECTIONS 2.1, 2.3 AND 10.5 OF THE INDENTURE
Pursuant to resolutions of the Board of Directors of UGI Utilities, Inc. (the "Company") adopted July 30, 1996 (certified copies of which are attached to this Certificate as Exhibit A), and in accordance with Sections 2.1 and 2.3 of the Indenture, dated as of August 1, 1993 (the "Indenture"), between the Company and First Union National Bank (formerly First Fidelity Bank, National Association), as Trustee, the undersigned, as Vice President and Secretary of the Company, hereby certify that a series of securities entitled "Series B Medium-Term Notes" (the "Notes") has been authorized to be issued from time to time after the date hereof under the Indenture and there is hereby established under the Indenture, a series as designated, unlimited in aggregate principal amount, with the terms and in substantially the forms set forth in Exhibits B-1 and B-2 hereto, for Fixed Rate and Floating Rate Notes, respectively, with the specific interest rates, interest rate formulas, maturities and other terms to be set forth in related Pricing Supplements to the Prospectus dated May 1, 1996, as supplemented by the Prospectus Supplement thereto, dated August 1, 1996 (collectively, the "Prospectus Supplement"), in accordance with the Administrative Procedures set forth in Exhibit B to the Agency Agreement dated August 1, 1996 between the Company and Donaldson, Lufkin & Jenrette Securities Corporation (copies of the Prospectus Supplement and Exhibit B to the Agency Agreement are attached to this Certificate as Exhibits C and D, respectively).
Each of the undersigned (i) has read and is familiar with the covenants and conditions in the Indenture pertaining to the establishment of a series of securities to be issued under the Indenture, (ii) has, among other things, discussed said covenants and conditions with counsel for the Company, (iii) has made such examination as, in his opinion, is necessary to enable him to express an informed opinion as to whether or not such covenants and conditions have been complied with in connection with the establishment of a series of securities under the Indenture, and (iv) in his opinion, such covenants and conditions have been complied with.
Dated: August 1, 1996
Brendan P. Bovaird Vice President and General Counsel
Barton D. Whitman Secretary
EXHIBIT A
UGI UTILITIES, INC.
SECRETARY'S CERTIFICATE
The undersigned certifies that:
1. He is the duly elected and acting Secretary of UGI Utilities, Inc., a Pennsylvania corporation (the "Company"), and as such is authorized to execute and deliver this Certificate on behalf of the Company.
2. Below is a true and correct copy of resolutions duly adopted by the Board of Directors of the Company at a meeting called, convened and held on July 30, 1996 at which a quorum was present and acting throughout.
RESOLVED, that establishment by the Company of a new series of securities entitled "Series B Medium-Term Notes" (the "Notes"), unlimited in aggregate principal amount, for issuance from time to time pursuant to the Indenture dated as of August 1, 1993, between the Company and First Union National Bank, (formerly, First Fidelity Bank), as Trustee (the "Indenture"); such Notes to be issued initially in an aggregate principal amount of up to $75,000,000 (or, if any Notes are issued at a substantial discount from the principal amount payable at maturity, such principal amount as shall result in an aggregate initial offering price of $75,000,000), with maturities of more than nine months from the date of issuance, is approved.
RESOLVED, the form of Prospectus Supplement presented to this Board (draft dated July 3, 1996) relating to the Notes is approved.
RESOLVED, First Union National Bank, or such other qualified financial institution as may be selected by the Treasurer of the Company is appointed to act as Trustee, Paying Agent and Registrar for the Notes under the Indenture.
RESOLVED, the Chairman of the Board of Directors, the President or any Vice President and the Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary (all of whom may sign by facsimile signature) are each authorized to execute on behalf of the Company and under its corporate seal (which may be in facsimile) up to $75,000,000 principal amount of Notes in the form as may be approved by the officers executing the Notes, and the Trustee is hereby authorized and directed to authenticate and deliver the Notes as provided in the Indenture.
RESOLVED, the Notes are to be issued in the form of one or more Global Securities.
RESOLVED, it is desirable that the Notes be qualified or registered for sale in various states and foreign jurisdictions; and the President or any Vice President, and the Secretary, Assistant Secretary, Treasurer or any Assistant Treasurer of the Company are to determine the states in which appropriate action shall be taken to qualify or register for sale all or such part of the Notes as such officers may deem advisable; and such officers are hereby authorized on behalf of the Company in its name to take any and all action as may be necessary or desirable to effect the registration or qualification (or exemption therefrom) of all or any part of the Notes for issue, offer, sale or trade under the Blue Sky or securities or other applicable laws of the states of the United States of America or other jurisdictions, and in connection therewith to execute, acknowledge, verify, deliver, file, or cause to be published any applications, reports, surety bonds, consents of service of process, appointments of attorneys to receive service of process, issuer's covenants, resolutions and other papers, documents and instruments as may be required under such laws and to take any and all further action as may be necessary or desirable to maintain any such registration, qualification or exemption for as long as may be necessary or desirable or as may be required by law.
RESOLVED, in connection with the immediately preceding resolution, any and all resolutions appointing or authorizing any officers or agencies of any jurisdiction of the United States and of such other jurisdictions as such officers and counsel for the Company may deem advisable, as agents for the service of process upon the Company which may be required by the securities laws of such jurisdiction in order to permit the Notes to be offered or sold therein, for the purpose of offering or selling the Notes therein, are hereby adopted in the form prescribed, as fully as if set out verbatim herein, and any officer of this Company is authorized to certify that any such resolution has been adopted at this meeting, and the Secretary or the Assistant Secretary of the Company shall cause a copy of such resolutions so certified, upon the authority of this resolution, to be filed in the minute books of this Board.
RESOLVED, the engagement of Donaldson, Lufkin & Jenrette Securities Corporation as agent for the solicitation of offers for the Notes, is approved, ratified and confirmed.
RESOLVED, the form of Agency Agreement between the Company and Donaldson, Lufkin & Jenrette Securities Corporation (the "Agent") (the "Agency Agreement") submitted to this Board (draft dated July 10, 1996) is approved, and the President or any Vice President or the Treasurer of the Company is authorized to execute and deliver, in the name and on behalf of the Company, the Agency Agreement, with any changes and additions as the officer of the Company executing the Agency Agreement and counsel for the Company may approve.
RESOLVED, in connection with the offering of the Notes,
notwithstanding the limitations placed on the authority of the
Executive/Nominating Committee by its Charter adopted by this Board on
May 21, 1991 (which withholds from the Executive/Nominating Committee
of this Board the authority to increase the long-term indebtedness of
the Company), this Board hereby authorizes a majority of the members
of the Executive/Nominating Committee of this Board acting with or
without a meeting, or, subject to the limitations on aggregate
principal amount set forth below, the Chairman of the Board or the
President and the Treasurer or the Assistant Treasurer of the Company,
acting together (the "Authorized Officers"), to establish the terms
and conditions of the Notes to be issued from time to time, including
without limitation, (i) the precise principal amount of the Notes to
be sold (subject initially to a maximum aggregate principal amount of
$75,000,000 or, if any Notes are issued at a substantial discount from
the principal amount payable at maturity, such principal amount as
shall result in an aggregate initial offering price of $75,000,000),
(ii) the offering price of the Notes to purchasers, (iii) the amount
of the commissions to the Agent, (iv) the sale price of the Notes to
the Agent, (v) the interest rate or interest rate formula (including
applicable base rate), or mechanism to determine interest or principal
payments by reference to indices, applicable to the Notes, (vi) the
interest payment dates and exact maturity date of the Notes, (vii) the
redemption and repayment provisions and prices, if any, and (viii) if
other than the principal amount thereof, the portion of the principal
amount of any Note which shall be payable upon declaration of
acceleration of maturity or provable in bankruptcy.
RESOLVED, in connection with the offering of the Notes, this Board hereby authorizes the Authorized Officers to establish the terms and conditions for up to $20,000,000 principal amount of Notes in any fiscal quarter of the Company.
RESOLVED, all actions previously taken by any officer or other representative of the Company consistent with the purposes and intent of the foregoing resolutions are approved, ratified and confirmed.
RESOLVED, any officer of the Company is authorized to execute such other agreements, certificates, consents, corporate papers and other documents, borrow such funds, make such payments and take all other action that such officer and counsel for the Company may deem necessary or desirable to carry out the intent and purposes of the foregoing resolutions.
3. These resolutions have not been amended, modified or rescinded and remain in full force and effect on the date of this certificate.
Dated: August 1, 1996
[Corporate Seal] _______________________________
Barton D. Whitman
Secretary
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UGI UTILITIES, INC.
SERIES B MEDIUM-TERM NOTES
OFFICERS' CERTIFICATE
PURSUANT TO SECTIONS 2.1, 2.3 AND 10.5 OF THE INDENTURE
Exhibit B-1 to Exhibit (c)(4)(iv) is incorporated by reference to Exhibit
(c)(4)(i) to UGI Utilities, Inc. Current Report on Form 8-K dated August 1,
1996.
Exhibit B-2 to Exhibit (c)(4)(iv) is incorporated by reference to Exhibit
(c)(4)(ii) to UGI Utilities, Inc. Current Report on Form 8-K dated August 1,
1996.
Exhibit D to Exhibit (c)(4)(iv) is incorporated by reference to Exhibit (c)(1) to UGI Utilities, Inc. Current Report on Form 8-K dated August 1, 1996.
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MAY 7, 1996)
$75,000,000
LOGO
SERIES B MEDIUM-TERM NOTES
DUE MORE THAN NINE MONTHS FROM DATE OF ISSUE
UGI Utilities, Inc. (the "Company") may offer from time to time pursuant to this Prospectus Supplement its Series B Medium-Term Notes (the "Notes"), with an aggregate initial offering price of up to $75,000,000, subject to reduction as a result of the sale of other debt securities of the Company. The terms of each Note will be established prior to issuance and set forth in one or more pricing supplements to this Prospectus Supplement (each a "Pricing Supplement"). The Notes may bear interest at either fixed or floating rates and will have Maturity Dates more than nine months from their respective dates of issue, as specified in a Pricing Supplement. Interest on each Fixed Rate Note will be payable on May 15 and November 15 of each year and at Maturity, unless otherwise specified in the applicable Pricing Supplement. Interest on each Floating Rate Note will be payable on the Interest Payment Dates and at Maturity as set forth in the applicable Pricing Supplement. A Note may provide that the principal thereof will be amortized over the life of such Note. See "Description of Notes."
Except as otherwise specified in the applicable Pricing Supplement, Notes will be represented by a Global Note registered in the name of a nominee of The Depository Trust Company ("DTC"), New York, New York, and beneficial interests in Global Notes will be shown on, and transfers thereof will be effected only through, records maintained by such depository and its participants. A beneficial interest in a Global Note may be exchanged for Notes in certificated form only under limited circumstances. See "Description of Notes--Book-Entry System."
Unless otherwise specified in the applicable Pricing Supplement, Notes will be issued only in registered form in authorized denominations of $100,000 or any amount in excess thereof that is an integral multiple of $1,000. See "Description of Notes--General."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT,
ANY PRICING SUPPLEMENT HERETO OR THE PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
PRICE TO AGENT'S DISCOUNT PROCEEDS TO
PUBLIC(1) OR COMMISSION(2) COMPANY(2)(3)
- ------------------------------------------------------------------------------
Per Note...... 100.000% .125 -- .750% 99.875% -- 99.250%
- ------------------------------------------------------------------------------
$74,906,250 --
Total......... $75,000,000 $93,750 -- $562,500 $74,437,500
- ------------------------------------------------------------------------------
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The Notes are being offered on a periodic basis by the Company through the Agent, who has agreed to use reasonable best efforts to solicit offers to purchase the Notes. In addition, the Notes may be sold to the Agent, as principal, for resale to investors and other purchasers. The Company also may sell the Notes directly to investors on its own behalf, in which case no commission will be paid. The Notes will not be listed on any securities exchange, and there can be no assurance that the Notes offered by this Prospectus Supplement will be sold or that there will be a secondary market for the Notes. The Company reserves the right to withdraw, cancel or modify the offer made hereby without notice. The Company or the Agent, when soliciting an offer, may reject such offer in whole or in part. See "Plan of Distribution."
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
The date of this Prospectus Supplement is August 1, 1996.
IN CONNECTION WITH THE DISTRIBUTION OF THE NOTES, THE AGENT MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THE COMPANY
UGI Utilities, Inc. ("Utilities" or the "Company") is a public utility company that owns and operates (i) a natural gas distribution utility serving 14 counties in eastern and southcentral Pennsylvania, and (ii) an electric utility serving parts of Luzerne and Wyoming Counties in northeastern Pennsylvania. Utilities is a wholly owned subsidiary of UGI Corporation.
DESCRIPTION OF NOTES
The following description of the terms of the Notes supplements and, to the extent inconsistent therewith, replaces the description of the general terms and provisions of Debt Securities set forth under "Description of Debt Securities" in the accompanying Prospectus, to which reference is hereby made. The following description of the material terms of the Notes does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Indenture and to the specific terms of Notes that are set forth in the applicable Pricing Supplement.
A glossary of certain terms used herein is set forth in Appendix A to this Prospectus Supplement. Capitalized terms used in this Prospectus Supplement that are not defined in the glossary have the meanings given in the Indenture or in the accompanying Prospectus.
THE FOLLOWING DESCRIPTION WILL APPLY TO EACH NOTE UNLESS OTHERWISE SPECIFIED
IN THE APPLICABLE PRICING SUPPLEMENT.
GENERAL
The Notes offered by this Prospectus Supplement are part of a series of Debt Securities established under the Indenture and will be limited to an aggregate $75,000,000 initial offering price, subject to reduction as a result of the sale of other debt securities of the Company covered by the Registration Statement (as defined in the accompanying Prospectus).
The Notes constitute a new series of Debt Securities that may be issued by the Company pursuant to the Indenture. At the date of this Prospectus Supplement, an aggregate amount of $118,000,000 of Debt Securities (none of which were Notes) was outstanding under the Indenture. The Company may issue additional Notes, medium-term notes of another series or other Debt Securities (in each case unlimited as to principal amount) under the Indenture. The Company may also issue additional medium-term notes or other debt securities under one or more additional indentures.
The Notes will be offered on a periodic basis and will have Maturity Dates more than nine months from their respective dates of issue, as agreed to by the purchaser and the Company. If so specified in the applicable Pricing Supplement, an issue of Notes will be subject to redemption at the option of the Company or repayment at the option of the holder prior to the Maturity Date. Unless otherwise specified in the applicable Pricing Supplement, the Notes will not be subject to any sinking fund.
Each Note will bear interest from its date of issue at either (i) a fixed rate (a "Fixed Rate Note"), which may be zero (a "Zero-Coupon Note"), or (ii) a floating rate or rates, determined by reference to a Base Rate (a "Floating Rate Note"), which may be adjustable by a Spread and/or a Spread Multiplier.
Each Note will be issued in fully registered form without coupons and will be represented by a global security (a "Global Note") registered in the name of a nominee of DTC or another depository (DTC or such other depository as is specified in the Pricing Supplement is herein referred to as the "Depository"). Unless otherwise specified in the applicable Pricing Supplement, the Depository will be DTC. All Notes issued on the same day and having the same terms may be represented by one or more Global Notes. A beneficial interest in a Global Note will be shown on, and transfers thereof will be effected only through, records maintained by the Depository and its participants. A beneficial interest in a Global Note may be exchanged for Notes in certificated form only in the limited circumstances set forth in "Book-Entry System" below. Except as indicated below, payments of principal of and interest, if any, on Notes represented by a Global Note will be made by the Company or the Paying Agent to the Depository. See "Payment of Principal and Interest" and "Book-Entry System" below.
The authorized denominations of Notes will be $100,000 or any amount in excess thereof that is an integral multiple of $1,000.
Reference is made to the Pricing Supplement relating to an issue of Notes for the following:
(1) The aggregate principal amount of such Notes (and, if such Notes are issued other than at par, the percentage of their principal amount at which such Notes will be issued) and the date on which such Notes will be issued.
(2) The Maturity Date of such Notes.
(3) Whether such Notes will be Fixed Rate Notes or Floating Rate Notes; whether any such Notes will be Amortizing Notes; and whether such Notes will be Indexed Notes and, if so, the special terms thereof.
(4) If such Notes will be Fixed Rate Notes, the rate at which such Notes will bear interest, if any; whether any such Notes will be Discount Notes or Zero-Coupon Notes; and whether and in what manner such rate may change prior to the Maturity Date of such Notes.
(5) If such Notes will be Floating Rate Notes, the Base Rate, whether any such Notes will be Discount Notes, the Initial Interest Period and the Initial Interest Rate (or formula for determining the same), the Interest Reset Periods and Interest Reset Dates, the Index Maturity, any Spread or Spread Multiplier, whether any such Spread or Spread Multiplier may change before the Maturity Date of such Notes, the Interest Determination Dates and Interest Payment Dates, any Maximum Interest Rate and/or Minimum Interest Rate and any other terms relating to the particular method of calculating the interest rate on such Notes.
(6) Whether such Notes may be redeemed at the option of the Company, or repaid at the option of the holders, prior to their Maturity Date and, if so, the provisions relating to such redemption or repayment, including whether such notes may be so redeemed or repaid at a premium.
(7) Whether the interest rate, Spread or Spread Multiplier on such Notes may be reset upon the occurrence of certain events or at the option of the Company and, if so, the provisions relating to such reset.
(8) Any material United States federal income tax consequences of the purchase, ownership and disposition of such Notes (other than or in addition to those set forth below under "United States Taxation").
(9) Any other terms of such Notes not inconsistent with the provisions of the Indenture.
PAYMENT OF PRINCIPAL AND INTEREST
Payments of interest on a Global Note (other than interest payable at Maturity) will be made by the Paying Agent or the Company to the Depository in immediately available funds in accordance with existing arrangements between the Paying Agent and the Depository. Payments of principal of and interest, if any, on a Global Note at Maturity will be made by the Paying Agent or the Company by wire transfer in immediately
available funds to an account specified by the Depository. Beneficial Owners of a Global Note will be paid in accordance with the procedures of the Depository and the applicable Participant (as defined below) therein, as in effect from time to time. See "Book-Entry System" below.
The Company will pay any administrative costs imposed by banks in connection with making payments on the Global Notes in immediately available funds, but any tax, assessment or governmental charge imposed upon payments will be borne by the holders of the Notes in respect of which such payments are made.
Any payment required to be made in respect of a Note on a date that is not a Business Day for such Note will be made on the next succeeding Business Day with the same force and effect as if made on such date, and no additional interest will accrue as a result of such delayed payment; provided that, in the case of an Interest Payment Date with respect to a LIBOR Note, if such Business Day would fall in the succeeding calendar month, such payment will be made on the Business Day immediately preceding such Interest Payment Date. If any Note is issued between a Regular Record Date and the related Interest Payment Date, interest for the period beginning on the date of issue of such Note and ending on such Interest Payment Date will be paid on the Interest Payment Date following the next succeeding Regular Record Date to the registered holder on such succeeding Regular Record Date.
Except as set forth in the applicable Pricing Supplement, the amount of any Discount Note payable in the event of redemption by the Company or repayment at the option of the holder, in lieu of the stated principal amount due on the Maturity Date, will be the Amortized Face Amount of such Discount Note at the date of such redemption or repayment. The amount of any Discount Note payable in the event of declaration of acceleration ("OID Default Amount") will be set forth in the applicable Pricing Supplement.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from and including its date of issue to but excluding the date of Maturity at the interest rate set forth or described in the applicable Pricing Supplement, except that such rate of interest may be subject to adjustment from time to time if and to the extent provided for in such Pricing Supplement. The Interest Payment Dates for each Fixed Rate Note (other than a Zero-Coupon Note) will be each May 15 and November 15 and the date of Maturity. Each payment of interest on a Fixed Rate Note will include interest accrued from and including the date of issue or the last Interest Payment Date to which interest has been paid or duly provided for, as the case may be, to but excluding the next Interest Payment Date or the date of Maturity, as the case may be. Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of twelve 30-day months.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest for the period ("Initial Interest Period") from and including its date of issue to but excluding the first Interest Reset Date for such Note at the interest rate set forth or described in the applicable Pricing Supplement ("Initial Interest Rate"). Subsequently, each Floating Rate Note will bear interest for each Interest Reset Period at the interest rate determined by (i) adding to or subtracting from the applicable interest rate basis ("Base Rate") applicable to such Note, the Spread, if any, and/or (ii) multiplying the Base Rate by the Spread Multiplier, if any, or (iii) any other specified Base Rate, in any case as set forth in the applicable Pricing Supplement. The interest rate for an Interest Reset Period will be the interest rate determined as of the immediately preceding Interest Determination Date. The "Interest Reset Period" pertaining to any Interest Reset Date is the period from and including such Interest Reset Date to but excluding the immediately succeeding Interest Reset Date, or the date of Maturity, as the case may be. The "Interest Reset Date" means the date or dates as of which the interest rate on a Floating Rate Note will be reset. The "Spread" is the number of basis points, and the "Spread Multiplier" is the percentage used to determine the interest rate, that in either case may be specified in the applicable Pricing Supplement. The Spread or Spread Multiplier on a Floating Rate Note may be subject to adjustment from time to time, if and to the extent specified in the applicable Pricing Supplement.
One of the following Base Rates will be applicable to a Floating Rate Note:
(i) the CD Rate ("CD Rate Notes"), (ii) the Commercial Paper Rate ("Commercial
Paper Rate Notes"), (iii) the Federal Funds Rate ("Federal Funds Rate Notes"),
(iv) LIBOR ("LIBOR Notes"), (v) the Prime Rate ("Prime Rate Notes"), (vi) the
Treasury Rate ("Treasury Rate Notes") or (vii) another Base Rate, as set forth
in the applicable Pricing Supplement.
The interest rate on each Floating Rate Note will be reset daily, weekly, monthly, quarterly, semiannually or annually, as specified in the applicable Pricing Supplement. The following table sets forth the Interest Reset Dates and Interest Payment Dates with respect to Floating Rate Notes (except that in all instances the interest rate for the ten days immediately prior to Maturity will be the rate in effect on the tenth day prior to Maturity):
INTEREST RESET PERIOD INTEREST RESET DATES INTEREST PAYMENT DATES
- --------------------- -------------------- ----------------------
Daily Each Business Day Third Wednesday of each month or of
each February, May, August and
November (or as specified in the
Pricing Supplement)
Weekly (other than Each Wednesday Third Wednesday of each month or of
Treasury Rate Notes) each February, May, August and
November (or as specified in the
Pricing Supplement)
Weekly (Treasury Rate Each Tuesday (except as Third Wednesday of each month or of
Notes) provided under "Treasury each February, May, August and
Rate Notes" below) November (or as specified in the
Pricing Supplement)
Monthly Third Wednesday of each Third Wednesday of each month or of
month each February, May, August and
November (or as specified in the
Pricing Supplement)
Quarterly Third Wednesday of each Third Wednesday of each February,
February, May, August and May, August and November
November
Semiannually Third Wednesday of each of Third Wednesday of each of two
two months specified in the months specified in the Pricing
Pricing Supplement Supplement
Annually Third Wednesday of month Third Wednesday of month specified
specified in the Pricing in the Pricing Supplement
Supplement
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Notwithstanding the preceding table, if an Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date will be postponed to the next Business Day, except that, in the case of a LIBOR Note, if such Business Day would fall in the next calendar month, such Interest Reset Date will be the immediately preceding Business Day.
Each payment of interest on a Floating Rate Note will include interest accrued from and including the date of issue or the last Interest Payment Date to which interest has been paid or duly provided for, as the case may be, to but excluding the next Interest Payment Date or the date of Maturity, as the case may be; provided that, in the case of a Floating Rate Note that resets daily or weekly, each payment of interest will include the interest accrued from and including the date of issue or from and excluding the last Regular Record Date to which interest has been paid or duly provided for, as the case may be, to and including the Regular Record Date immediately preceding the applicable Interest Payment Date or to but excluding the date of Maturity, as the case may be.
Accrued interest on a Floating Rate Note will be calculated by multiplying the principal amount of such Note (or, in the case of a Floating Rate Note that is an Indexed Principal Note, the amount designated by the
terms thereof) by an accrued interest factor. Such accrued interest factor
will be computed by adding the interest factors calculated for each day in the
period for which accrued interest is being calculated. The interest factor
(expressed as a decimal calculated to seven decimal places, without rounding)
for each day in such period will be computed by dividing the applicable
interest rate by 360 (in the case of CD Rate Notes, Commercial Paper Rate
Notes, Federal Funds Rate Notes, LIBOR Notes and Prime Rate Notes) or by the
actual number of days in the relevant year (in the case of Treasury Rate
Notes).
A Floating Rate Note may provide for either or both of the following (in each case expressed as a rate per annum on a simple interest basis): (i) a maximum limitation on the rate at which interest may accrue during any interest period ("Maximum Interest Rate") and (ii) a minimum limitation on the rate at which interest may accrue during any interest period ("Minimum Interest Rate"). In addition to any Maximum Interest Rate that may be applicable, the interest rate will in no event be higher than the maximum rate permitted by applicable New York and United States federal law. Under applicable New York and United States federal law as of the date of this Prospectus Supplement, the maximum permitted rate of interest on Notes, with certain exceptions, is 25% per annum.
All percentages resulting from any calculation of the interest rate on a Floating Rate Note will be rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage point rounded upward, and all currency amounts used in or resulting from such calculation on Floating Rate Notes will be rounded to the nearest one-hundredth of a dollar (with .005 of a dollar being rounded upward).
The "Interest Determination Date" pertaining to an Interest Reset Period (i) for CD Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes or Prime Rate Notes will be the second Business Day preceding the relevant Interest Reset Date, (ii) for LIBOR Notes will be the second London Banking Day preceding the relevant Interest Reset Date and (iii) for Treasury Rate Notes will be the day of the week in which the relevant Interest Reset Date falls on which treasury bills of the applicable Index Maturity are auctioned. If, as the result of a legal holiday, a treasury bill auction is held on the Friday preceding the Interest Reset Date, such Friday will be the Interest Determination Date.
The "Calculation Date," where applicable, pertaining to an Interest Determination Date will be the earlier of (i) the tenth calendar day after such Interest Determination Date or, if any such day is not a Business Day, the next succeeding Business Day or (ii) the Business Day preceding the applicable Interest Payment Date or date of Maturity, as the case may be.
The Company will appoint an agent ("Calculation Agent") to calculate interest rates on Floating Rate Notes. Unless otherwise specified in the applicable Pricing Supplement, First Union National Bank will be the Calculation Agent for each Floating Rate Note. All determinations of interest by the Calculation Agent will, in the absence of manifest error, be conclusive for all purposes and binding on the Company and the holders of Floating Rate Notes. Upon the request of any registered holder or Beneficial Owner of a Floating Rate Note, the Calculation Agent for such Note will provide, if determined, the interest rate then in effect and the interest rate that will become effective on the next Interest Reset Date with respect to such Note.
CD Rate Notes. CD Rate Notes will bear interest at the interest rates (calculated with reference to the CD Rate and the Spread and/or the Spread Multiplier, if any) specified in the applicable Pricing Supplement.
The "CD Rate" means, with respect to any Interest Determination Date, the rate on such date for negotiable certificates of deposit having the applicable Index Maturity, as published by the Board of Governors of the Federal Reserve System in "Statistical Release H.15(519), Selected Interest Rates," or any successor publication of the Board of Governors of the Federal Reserve System ("H.15(519)") under the heading "CDs (Secondary Market)." If such rate is not published by 9:00 a.m., New York City time, on the Calculation Date pertaining to such Interest Determination Date, the CD Rate will be the rate on such Interest Determination Date for negotiable certificates of deposit of the applicable Index Maturity, as published by the Federal Reserve Bank of New York in its daily statistical release, "Composite 3:30 p.m. Quotations for U.S. Government Securities," or any
successor publication of the Federal Reserve Bank of New York ("Composite Quotations") under the heading "Certificates of Deposit." If such rate is not published in Composite Quotations by 3:00 p.m., New York City time, on the Calculation Date pertaining to such Interest Determination Date, then the CD Rate for such Interest Determination Date will be calculated by the Calculation Agent and will be the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York City time, on such Interest Determination Date, of three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The City of New York, selected by the Calculation Agent after consultation with the Company, for negotiable certificates of deposit of major United States money center banks of the highest credit standing (in the market for negotiable certificates of deposit) with a remaining maturity closest to the applicable Index Maturity in a denomination of $5,000,000; provided that, if the dealers selected as aforesaid by the Calculation Agent are not quoting such rates, the interest rate for the period commencing on the Interest Reset Date following such Interest Determination Date will be the interest rate borne by such CD Rate Notes on such Interest Determination Date.
CD Rate Notes, like other Notes, are not deposit obligations of a bank and are not insured by the Federal Deposit Insurance Corporation.
Commercial Paper Rate Notes. Commercial Paper Rate Notes will bear interest at the interest rates (calculated with reference to the Commercial Paper Rate and the Spread and/or the Spread Multiplier, if any) specified in the applicable Pricing Supplement.
The "Commercial Paper Rate" means, with respect to any Interest Determination Date, the Money Market Yield on such date of the rate for commercial paper having the applicable Index Maturity, as published in H.15(519) under the heading "Commercial Paper." If such rate is not published prior to 9:00 a.m., New York City time, on the Calculation Date pertaining to such Interest Determination Date, the Commercial Paper Rate will be the Money Market Yield on such Interest Determination Date of the rate for commercial paper of the applicable Index Maturity, as published by the Federal Reserve Bank of New York in Composite Quotations under the heading "Commercial Paper." If such rate is not published in Composite Quotations by 3:00 p.m., New York City time, on the Calculation Date pertaining to such Interest Determination Date, then the Commercial Paper Rate for such Interest Determination Date will be calculated by the Calculation Agent and will be the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m., New York City time, on such Interest Determination Date of three leading dealers of commercial paper in The City of New York, selected by the Calculation Agent after consultation with the Company, for commercial paper of the applicable Index Maturity, placed for industrial issuers whose bond rating (as determined by a nationally recognized rating agency) is "AA" or the equivalent; provided that, if the dealers selected as aforesaid by the Calculation Agent are not quoting such rates, the interest rate for the period commencing on the Interest Reset Date following such Interest Determination Date will be the interest rate borne by such Commercial Paper Rate Notes on such Interest Determination Date.
"Money Market Yield" will be a yield calculated in accordance with the following formula:
Money Market Yield = D x 360
------------- x 100
360 - (D x M)
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where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal, and "M" refers to the actual number of days in the applicable period for which interest is being calculated.
Federal Funds Rate Notes. Federal Funds Rate Notes will bear interest at the interest rates (calculated with reference to the Federal Funds Rate and the Spread and/or the Spread Multiplier, if any) specified in the applicable Pricing Supplement.
The "Federal Funds Rate" means, with respect to any Interest Determination Date, the rate on such date for federal funds, as published in H.15(519) under the heading "Federal Funds (Effective)." If such rate is not
published by 9:00 a.m., New York City time, on the Calculation Date pertaining to such Interest Determination Date, the Federal Funds Rate will be the rate on such Interest Determination Date, as published by the Federal Reserve Bank of New York in Composite Quotations under the heading "Federal Funds/Effective Rate." If such rate is not published in Composite Quotations by 3:00 p.m., New York City time, on the Calculation Date pertaining to such Interest Determination Date, then the Federal Funds Rate for such Interest Determination Date will be calculated by the Calculation Agent and will be the arithmetic mean of the rates for the last transaction in overnight federal funds arranged by three leading brokers of federal funds transactions in The City of New York, selected by the Calculation Agent after consultation with the Company, as of 9:00 a.m., New York City time, on such Interest Determination Date; provided that, if the brokers selected as aforesaid by the Calculation Agent are not arranging such transactions, the interest rate for the period commencing on the Interest Reset Date following such Interest Determination Date will be the interest rate borne by such Federal Funds Notes on such Interest Determination Date.
LIBOR Notes. LIBOR Notes will bear interest at the interest rates (calculated with reference to LIBOR and the Spread and/or the Spread Multiplier, if any) specified in the applicable Pricing Supplement.
"LIBOR" means, with respect to any Interest Determination Date, the rate determined by the Calculation Agent in accordance with either clause (1) or clause (2) below, as specified in the applicable Pricing Supplement:
(1) The rate for deposits in U.S. dollars of the Index Maturity specified in the applicable Pricing Supplement, commencing on the second London Banking Day immediately following such Interest Determination Date, that appears on the Telerate Page 3750 as of 11:00 a.m., London time, on such Interest Determination Date ("LIBOR Telerate"). "Telerate Page 3750" means the display designated as page "3750" on the Telerate Service (or such other page as may replace the page 3750 on that service or such other service or services as may be designated by the British Bankers' Association for the purpose of displaying London interbank offered rates for U.S. dollar deposits).
(2) The arithmetic mean of the offered rates for deposits in U.S. dollars having the Index Maturity specified in the applicable Pricing Supplement, commencing on the second London Banking Day immediately following such Interest Determination Date, that appear on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on such Interest Determination Date, if at least two such offered rates appear on the Reuters Screen LIBO Page ("LIBOR Reuters"). "Reuters Screen LIBO Page" means the display designated as Page "LIBO" on the Reuters Monitor Money Rate Service (or such other page as may replace the LIBO page on that service for the purpose of displaying London interbank offered rates of major banks).
If neither LIBOR Telerate nor LIBOR Reuters is specified in the applicable Pricing Supplement, LIBOR will be determined as if LIBOR Telerate had been specified.
If (i) in the case where paragraph (1) above applies, no rate appears on the
Telerate Page 3750 or (ii) in the case where paragraph (2) above applies,
fewer than two offered rates appear on the Reuters Screen LIBO Page, LIBOR in
respect of such Interest Determination Date will be determined by the
Calculation Agent on the basis of the rates at which deposits in U.S. dollars
of the Index Maturity specified in the applicable Pricing Supplement are
offered to prime banks in the London interbank market at approximately 11:00
a.m., London time, on such Interest Determination Date by four major banks
("Reference Banks") in the London interbank market, selected by the
Calculation Agent, commencing on the second London Banking Day immediately
following such Interest Determination Date in a principal amount of not less
than $1,000,000 that is representative for a single transaction in such market
at such time. The Calculation Agent will request the principal London office
of each of the Reference Banks to provide a quotation of its rate. If at least
two such quotations are provided, LIBOR for such Interest Determination Date
will be the arithmetic mean of such quotations. If fewer than two quotations
are provided, LIBOR for such Interest Determination Date will be the
arithmetic mean of the rates quoted at approximately 11:00 a.m., New York City
time, on such Interest Determination Date by three major commercial or
investment banks (which may include the Agents or any of their respective
affiliates) in The City of New York, selected by the Calculation Agent, for
U.S. dollar loans of the applicable Index Maturity to leading European banks,
commencing on the second London Banking Day immediately following such
Interest
Determination Date, in a principal amount of not less than $1,000,000 that is representative for a single transaction in such market at such time; provided that, if the banks selected as aforesaid by the Calculation Agent are not quoting such rates, the interest rate for the period commencing on the Interest Reset Date following such Interest Determination Date will be the interest rate borne by such LIBOR Notes on such Interest Determination Date.
If any LIBOR Note is indexed to the offered rates for deposits in a currency other than U.S. dollars, the applicable Pricing Supplement will set forth the method for determining such rates.
Prime Rate Notes. Prime Rate Notes will bear interest at the interest rates (calculated with reference to the Prime Rate and the Spread and/or the Spread Multiplier, if any) specified in the applicable Pricing Supplement.
The "Prime Rate" means, with respect to any Interest Determination Date, the rate on such date, as published in H.15(519) under the heading "Bank Prime Loan." If such rate is not published by 9:00 a.m., New York City time, on the Calculation Date pertaining to such Interest Determination Date, the Prime Rate will be determined by the Calculation Agent and will be the arithmetic mean of the rates of interest publicly announced by each bank named on the "Reuters Screen NYMF Page" as such bank's prime rate or base lending rate as in effect for such Interest Determination Date. "Reuters Screen NYMF Page" means the display designated as page "NYMF" on the Reuters Monitor Money Rates Service (or such other page as may replace the NYMF page on that service for the purpose of displaying prime rates or base lending rates of major United States banks). If fewer than four but more than one such rate appears on the Reuters Screen NYMF Page for such Interest Determination Date, the Prime Rate will be determined by the Calculation Agent and will be the arithmetic mean of the prime rates, quoted on the basis of the actual number of days in the year divided by 360, as of the close of business on such Interest Determination Date by four major money center banks in The City of New York, selected by the Calculation Agent after consultation with the Company. If fewer than two such rates appear on the Reuters Screen NYMF Page, the Prime Rate will be calculated by the Calculation Agent and will be the arithmetic mean of the prime rates in effect for such Interest Determination Date as furnished in The City of New York by at least three substitute banks or trust companies organized and doing business under the laws of the United States, or any state thereof, in each case having total equity capital of at least $500,000,000 and subject to supervision or examination by a federal or state authority, selected by the Calculation Agent after consultation with the Company; provided that, if the banks or trust companies selected as aforesaid by the Calculation Agent are not quoting such rates, the interest rate for the period commencing on the Interest Reset Date following such Interest Determination Date will be the interest rate borne by such Prime Rate Notes on such Interest Determination Date.
Treasury Rate Notes. Treasury Rate Notes will bear interest at the interest rates (calculated with reference to the Treasury Rate and the Spread and/or the Spread Multiplier, if any) specified in the applicable Pricing Supplement.
The "Treasury Rate" means, with respect to any Interest Determination Date,
the rate for the auction held on such Interest Determination Date of treasury
bills of the Index Maturity specified in the applicable Pricing Supplement, as
published in H.15(519) under the heading "U.S. Government Securities--Treasury
bills-auction average (investment)." If such rate is not published by 9:00
a.m., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Treasury Rate will be the auction average rate for
such Interest Determination Date (expressed as a bond equivalent, rounded to
the nearest one-hundredth of a percent, with five one-thousandths of a percent
rounded upward, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States
Department of the Treasury. In the event that the results of the auction of
treasury bills having the applicable Index Maturity are not published or
reported as provided above by 3:00 p.m., New York City time, on such
Calculation Date, or if no such auction is held on such Interest Determination
Date, then the Treasury Rate will be calculated by the Calculation Agent and
will be a yield to maturity (expressed as a bond equivalent on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates, as of
approximately 3:30 p.m., New York City time, on such Interest Determination Date, of three leading primary United States government securities dealers, selected by the Calculation Agent after consultation with the Company, for the issue of treasury bills with a remaining maturity closest to the applicable Index Maturity; provided that, if the dealers selected as aforesaid by the Calculation Agent are not quoting such rates, the interest rate for the period commencing on the Interest Reset Date following such Interest Determination Date will be the interest rate borne by such Treasury Rate Notes on such Interest Determination Date.
AMORTIZING NOTES
The Company may from time to time offer "Amortizing Notes," which are Notes as to which all or a portion of the principal amount is payable prior to the Maturity Date in accordance with a schedule, by application of a formula, or by reference to an Index. The terms and conditions of any Amortizing Notes, including the terms for payment thereof, will be set forth in the applicable Pricing Supplement.
INDEXED NOTES
The Company may from time to time offer "Indexed Notes," which are Notes as to which all or certain interest payments ("Indexed Rate Notes") and/or the principal amount payable at Maturity ("Indexed Principal Notes") are determined by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities, either in the United States or foreign jurisdictions, or by such other objective price, economic or other measures as are specified in the applicable Pricing Supplement (each an "Index"). A description of the Index used in any determination of interest and/or principal payments, and the method or formula by which interest or principal payments or both will be determined by reference to such Index, will be set forth in the applicable Pricing Supplement.
If the determination of an Index is calculated or announced by a third party (which may be First Union National Bank) and such third party either suspends the calculation or announcement of such Index or changes the basis upon which such Index is calculated (other than changes consistent with policies in effect at the time the related Indexed Note was issued and with permitted changes described in the applicable Pricing Supplement), then such Index will be calculated for purposes of such Indexed Note by another third party (which may be First Union National Bank) selected by the Company, subject to the same conditions and controls as applied to the original third party. If for any reason such Index cannot be calculated on the same basis and subject to the same conditions and controls as applied to the original third party, then any indexed interest payments or indexed principal amount payable with respect to such Indexed Note will be calculated in the manner set forth in the applicable Pricing Supplement. All determinations of such third party will, in the absence of manifest error, be conclusive for all purposes and binding on the Company and the holders of Indexed Notes.
SUBSEQUENT INTEREST PERIODS--INTEREST RATE RESET
The Pricing Supplement relating to each Note will indicate whether the Company has the option with respect to such Note to reset the interest rate, in the case of a Fixed Rate Note, or to reset the Spread or Spread Multiplier, in the case of a Floating Rate Note, and, if so, the date or dates on which such interest rate or such Spread or Spread Multiplier, as the case may be, may be reset (each an "Optional Reset Date"). If the Company has such option with respect to any Note, the following procedures will apply.
The Company may exercise such option with respect to a Note by notifying the Trustee of such exercise at least 50 but not more than 60 days prior to an Optional Reset Date for such Note. Not later than 40 days prior to such Optional Reset Date, the Trustee will mail to the holder of such Note a notice ("Reset Notice") setting forth (i) the election of the Company to reset the interest rate in the case of a Fixed Rate Note, or the Spread or Spread Multiplier in the case of a Floating Rate Note, (ii) such new interest rate or such new Spread or Spread Multiplier, as the case may be, and (iii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date or, if there is no such next Optional Reset Date, to the Maturity Date of such Note (each such period a "Subsequent Interest Period"), including the date or dates on
which or the period or periods during which and the price or prices at which such redemption may occur during such Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset Notice to the registered holder of a Note, such new interest rate or such new Spread or Spread Multiplier, as the case may be, will take effect automatically and, except as modified by the Reset Notice and as described in the next paragraph, such Note will have the same terms as prior to the transmittal of such Reset Notice.
Notwithstanding the foregoing, the Company may, at its option, revoke the interest rate in the case of a Fixed Rate Note, or the Spread or Spread Multiplier in the case of a Floating Rate Note, as provided for in the Reset Notice, and establish an interest rate, Spread or Spread Multiplier that is higher than the interest rate, Spread or Spread Multiplier provided for in the relevant Reset Notice for the Subsequent Interest Period commencing on such Optional Reset Date, by causing the Trustee to mail, not later than 20 days prior to an Optional Reset Date for a Note, notice of such higher interest rate, Spread or Spread Multiplier to the holder of such Note. Such notice will be irrevocable. The Company must notify the Trustee of its intentions to revoke a Reset Notice at least 25 days prior to the applicable Optional Reset Date. Each Note with respect to which the interest rate, Spread or Spread Multiplier is reset on an Optional Reset Date and with respect to which the holder of such Note has not tendered such Note for repayment (or has validly revoked any such tender) pursuant to the next succeeding paragraph will bear such higher interest rate, Spread or Spread Multiplier for the Subsequent Interest Period.
If the Company elects to reset the interest rate, Spread or Spread Multiplier of a Note as described above, the holder of such Note will have the option to elect repayment of such Note by the Company on any Optional Reset Date at a price equal to the aggregate principal amount thereof outstanding on, plus any interest accrued to, such Optional Reset Date. In order for a Note to be so repaid on an Optional Reset Date, the holder thereof must follow the procedures set forth below under "Redemption and Repayment" for optional repayment, except that (i) the period for delivery of such Note or notification to the Trustee will be at least 25 but not more than 35 days prior to such Optional Reset Date and (ii) a holder who has tendered a Note for repayment pursuant to a Reset Notice may, by written notice to the Trustee, revoke any such tender until the close of business on the tenth day prior to such Optional Reset Date.
BOOK-ENTRY SYSTEM
The information in this section concerning DTC and DTC's book-entry system has been obtained from sources (including DTC) that the Company believes to be reliable. The Company takes no responsibility for the accuracy thereof.
Upon issuance, all Book-Entry Notes of like tenor and having the same original issue date will be represented by a single global security. Each global security will be deposited with, or on behalf of, DTC, as Depository and will be registered in the name of DTC or its nominee as described below.
Beneficial Owners of Book-Entry Notes will not receive certificates representing their interests in the Notes purchased, except under the limited circumstances described under "Discontinuance of DTC Services." A global security representing Book-Entry Notes may not be transferred except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or to a successor Depository or its nominee.
The Depository. Initially, DTC will act as Depository for the Notes. The Agent is a Direct Participant (as defined herein) of DTC. DTC has advised the Company as follows:
The Notes will be issued as fully-registered securities in the name of Cede & Co. (DTC's partnership nominee).
DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates.
"Direct Participants" include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission.
Purchases of Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for Notes on DTC's records. The ownership interest of each actual Beneficial Owner is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmation providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Notes are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Notes, except in the event that use of the book-entry system for the Notes is discontinued.
To facilitate subsequent transfers, all Notes deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Notes with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Notes; DTC's records reflect only the identity of the Direct Participants to whose accounts such Notes are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If fewer than all of the Notes are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the Notes. Under its usual procedures, DTC mails an Omnibus Proxy to the Company as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Notes will be made to DTC. DTC's practice is to credit Direct Participants' accounts on each payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on such payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trustee, or the Company, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Company or the Trustee; disbursement of such payments to Direct Participants shall be the responsibility of DTC; and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.
None of the Company, the Agent, the Trustee, any paying agent or any other agent of the Company or the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in Book-Entry Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
Discontinuance of DTC Services. DTC may discontinue providing its services as Depository with respect to the Notes at any time by giving reasonable notice to the Company or the Trustee. The Company may decide to discontinue use of the system of book-entry transfers through DTC. Under either circumstance, if a successor Depository is not obtained, Note certificates will be printed and delivered as provided in the Indenture.
Note certificates issued in exchange for a global security shall be registered in the name or names of such person or persons as the Depository shall instruct the Trustee. It is expected that such instructions will be based upon directions received by the Depository from its Participants with respect to ownership of beneficial interests in such global security.
REDEMPTION AND REPAYMENT
The Pricing Supplement relating to each Note will indicate either (i) that such Note cannot be redeemed prior to its Maturity Date or (ii) that such Note will be redeemable, in whole or in part, at the option of the Company on a specified date or dates prior to such Maturity Date, at a price or prices set forth in the applicable Pricing Supplement, together with interest accrued to the date of redemption. The Company may redeem any of the Notes that are redeemable either in whole or from time to time in part, upon not less than 30 nor more than 60 days' notice. If less than all of the Notes of like terms are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by such method as the Trustee shall deem fair and appropriate.
The Pricing Supplement relating to each Note will indicate either (i) that such Note cannot be repaid at the option of the holder prior to its Maturity Date or (ii) that such Note will be repayable at the option of the holder thereof on a date or dates specified prior to its Maturity Date, at a price or prices set forth in the applicable Pricing Supplement, together with interest accrued to the date of repayment.
In order for a Note to be repaid prior to its Maturity Date at the option of the holder thereof, the Company must receive, at least 30 days but not more than 45 days prior to the repayment date, the Note with the form entitled "Option to Elect Repayment" thereon duly completed. Exercise of the repayment option by the holder of a Note will be irrevocable, except as otherwise described above under "Subsequent Interest Periods--Interest Rate Reset." The repayment option may be exercised by the holder of a Note for less than the aggregate principal amount of the Note then outstanding, provided that the principal amount of the Note remaining outstanding after repayment is an authorized denomination.
With respect to a Global Note, the Depository's nominee will be the holder of such Global Note and therefore will be the only entity that can exercise a right to repayment. See "Book-Entry System" above. In order to ensure that the Depository's nominee will exercise a right to repayment in a timely manner with respect to a particular beneficial interest in a Global Note, the Beneficial Owner of such interest must instruct the broker or other participant through which it holds a beneficial interest in such Global Note to notify the Depository of its desire to exercise a right to repayment. Each Beneficial Owner should consult the broker or other Direct or Indirect Participant through which it holds a beneficial interest in a Global Note in order to ascertain the deadline by which such an instruction must be given in order for notice to be delivered by such broker or other Direct or Indirect Participant to the Depository in a timely manner.
REPURCHASE
The Company may at any time purchase Notes at any price or prices in the open market or otherwise. Notes so purchased by the Company may be held or resold or, at the discretion of the Company, surrendered to the Trustee for cancellation.
RISKS OF INDEXED NOTES
An investment in an Indexed Note may entail significant risks that are not associated with a similar investment in a debt instrument that has a fixed principal amount, is denominated in U.S. dollars and bears interest at either a fixed rate or a floating rate determined by reference to nationally published interest rate references. The risks of a particular Indexed Note will depend on the terms of such Indexed Note, but may include, without limitation, the possibility of significant changes in the prices of securities, currencies, intangibles, goods, articles or commodities, either in the United States or foreign jurisdictions, or of other objective price, economic or other measures making up the relevant Index ("Underlying Assets"). Such risks generally depend on factors over which the Company has no control, such as economic and political events and the supply of and demand for the Underlying Assets. In recent years, currency exchange rates and prices for various Underlying Assets have been highly volatile, and such volatility can be expected to continue in the future. Fluctuations in any such rates or prices that have occurred in the past are not necessarily indicative, however, of fluctuations that may occur during the term of any Indexed Note.
In considering whether to purchase Indexed Notes, investors should be aware that the calculation of amounts payable in respect of Indexed Notes may involve reference to prices that are published solely by third parties or entities that are not subject to regulation under the laws of the United States.
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN INDEXED NOTES, AND THE COMPANY DISCLAIMS ANY RESPONSIBILITY TO ADVISE PROSPECTIVE INVESTORS OF SUCH RISKS AS THEY EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS SUCH RISKS MAY CHANGE FROM TIME TO TIME. THE RISK OF LOSS AS A RESULT OF THE LINKAGE OF PRINCIPAL OR INTEREST PAYMENTS ON INDEXED NOTES TO AN INDEX AND TO THE UNDERLYING ASSETS CAN BE SUBSTANTIAL. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS OF AN INVESTMENT IN INDEXED NOTES. INDEXED NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO TRANSACTIONS IN THE UNDERLYING ASSETS RELEVANT TO SUCH INDEXED NOTES.
UNITED STATES TAXATION
The following summary is based on the United States Internal Revenue Code of 1986, as amended ("Code"), regulations (including proposed regulations and temporary regulations) promulgated thereunder, rulings, official pronouncements and judicial decisions, all as in effect on the date of this Prospectus Supplement and all of which are subject to change, possibly with retroactive effect, or to different interpretations. This summary provides general information only and does not purport to address all of the United States federal income tax consequences that may be applicable to a holder of a Note. It also does not address all of the tax consequences that may be relevant to certain types of holders subject to special treatment under the United States federal income tax law, such as individual retirement and other tax-deferred accounts, dealers in securities, life insurance companies, tax- exempt organizations, persons holding Notes as a position in a straddle for tax purposes, as part of a "synthetic security" or as part of another other integrated investment comprised of a Note and one or more other investments, or United States persons (as defined below) whose functional currency is other than the U.S. dollar. It also does not discuss the tax consequences to subsequent purchasers of Notes and is limited to investors who hold Notes as a capital asset. The United States federal income tax consequences of purchasing, holding or disposing of a particular Note will depend, in part, on the particular terms of such Note as set forth in the applicable Pricing Supplement. The material United States federal income tax consequences of purchasing, holding or disposing of Amortizing Notes, Floating Rate Notes or Indexed Notes will be set forth in the applicable Pricing Supplement. A person considering the purchase of Notes or making any election under the Code or the regulations with respect to such Notes should consult its own tax advisor concerning the application of the United States federal income tax law to its particular situation, as well as any tax consequences arising under the law of any state, local or non-U.S. tax jurisdiction.
UNITED STATES PERSONS
For purposes of the following discussion, "United States person" means an individual who is a citizen or resident of the United States, an estate or trust subject to United States federal income taxation without regard to the source of its income, or a corporation, partnership or other entity created or organized in or under the law of the United States or any state or the District of Columbia. The following discussion pertains only to a holder of a Note who is a Beneficial Owner of such Note and who is a United States person.
Payments of Interest on Notes Other Than Discount Notes. Except as discussed below under "Discount Notes" and "Short-Term Notes," a payment of interest on a Note will be taxable to a holder as ordinary interest income at the time it is accrued or received in accordance with the holder's method of tax accounting.
Purchase, Sale, Exchange or Retirement of Notes. A holder's tax basis in a Note generally will be the cost of the Note to such holder, increased by any original issue discount, market discount or acquisition discount (all as defined below) previously included in the holder's gross income (as described below), and reduced by any amortized premium (as described below) and any principal payments and payments of stated interest that are not payments of qualified stated interest (as defined below).
Upon the sale, exchange or retirement of a Note, a holder generally will recognize gain or loss equal to the difference between (i) the amount realized on such sale, exchange or retirement, except to the extent such amount is attributable to accrued interest and (ii) the holder's tax basis in the Note. Except with respect to (i) gain attributable to market discount (as described below) and (ii) gain on the disposition of a Short-Term Note (as defined below), gain or loss so recognized will be capital gain or loss and will be long-term capital gain or loss if, at the time of the sale, exchange or retirement, the Note was held for more than one year. Under current law, long- term capital gains of individuals are, under certain circumstances, taxed at lower rates than items of ordinary income.
Interest Rate Reset. If so specified in the Pricing Supplement relating to an issue of Notes, the Company may have the option to reset the interest rate, in the case of a Fixed Rate Note, or to reset the Spread or the Spread Multiplier, in the case of a Floating Rate Note. See "Description of Notes-- Subsequent Interest Periods--Interest Rate Reset." The treatment of a holder of Notes with respect to which such an option has been exercised and who does not elect to have the Company repay such Notes on the applicable Optional Reset Date or Maturity Date will depend on the terms established for such Notes by the Company pursuant to the exercise of such option ("revised terms"). Depending on the particular circumstances, such holder may be treated as having surrendered such Notes for new Notes with the revised terms in either a taxable exchange or a recapitalization qualifying for nonrecognition of gain or loss.
Discount Notes. The following is a summary of the material United States federal income tax consequences to holders of Discount Notes, based on the original issue discount provisions of the Code as in effect on the date hereof and on certain regulations promulgated thereunder relating to original issue discount ("OID Regulations").
For United States federal income tax purposes, original issue discount is the excess of the stated redemption price at maturity of each Discount Note over its issue price if such excess is greater than or equal to a de minimis amount (generally 1/4 of 1% of the Discount Note's stated redemption price at maturity multiplied by the number of complete years to maturity from the issue date). The issue price of an issue of Discount Notes that is issued for cash will be equal to the first price at which a substantial amount of the Notes in such issue is sold. The stated redemption price at maturity of a Discount Note is the sum of all payments provided by the Discount Note, other than payments of "qualified stated interest." Under the OID Regulations, "qualified stated interest" includes stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually at a single fixed rate of interest or at current values of (i) a single qualified floating rate, or (ii) a single objective rate. A "qualified floating rate" is any floating rate where variations in such rate can reasonably be expected to measure contemporaneous variations in the cost of newly borrowed funds (e.g.,
LIBOR). An "objective rate" is a rate that is not itself a qualified floating rate but which is determined using a single formula that is fixed throughout the term of the Notes and which is based upon one or more qualified rates or that is based on changes in the price of actively traded property (or an index of the prices of such property). Interest is payable at a single fixed rate only if the rate appropriately takes into account the length of the interval between payments. Except as described below with respect to Short-Term Notes ( as defined below), a holder of a Discount Note will be required to include original issue discount in income as it accrues before the receipt of cash attributable to such income, regardless of such holder's method of accounting for tax purposes.
Special rules may apply where variable rate debt instruments are subject to interest rate caps, floors or certain other interest rate adjustment features.
The amount of original issue discount includible in income by the initial holder of a Discount Note is the sum of the daily portions of original issue discount with respect to such Note for each day during the taxable year on which such holder held such Note ("accrued original issue discount"). Generally, the daily portion of the original issue discount is determined by allocating to each day in any "accrual period" a ratable portion of the original issue discount allocable to such accrual period. Under the OID Regulations, the "accrual periods" for a Discount Note may be selected by each holder, may be of any length, and may vary in length over the term of the Discount Note, provided that each accrual period is no longer than one year and each scheduled payment of principal or interest occurs either on the first day or on the final day of an accrual period. The amount of original issue discount allocable to each accrual period is the excess (if any) of (i) the product of a Discount Note's adjusted issue price at the beginning of such accrual period and its yield to maturity (determined on the basis of compounding at the close of each accrual period and adjusted for the length of such accrual period) over (ii) the amount of the qualified stated interest, if any, payable on such Discount Note and allocable to such accrual period. The "adjusted issue price" of a Discount Note at the beginning of any accrual period generally is the sum of the issue price of a Discount Note plus the accrued original issue discount allocable for all prior accrual periods, reduced by any prior payment on the Discount Note other than a payment of qualified stated interest. Under these rules, a holder of a Discount Note generally will have to include in income increasingly greater amounts of original issue discount in successive accrual periods.
If the tax basis of a Discount Note, immediately after its purchase, exceeds its adjusted issue price (the amount of such excess being considered "acquisition premium") but is not greater than its stated redemption price at maturity, the amount includible in income in each taxable year as original issue discount is reduced (but not below zero) by that portion of the acquisition premium properly allocable to such year.
If a holder purchases a Discount Note for an amount in excess of the stated redemption price at maturity, the holder does not include any original issue discount in income and generally may be subject to the "bond premium" rules discussed below. See "Amortizable Bond Premium." If a holder has a tax basis in a Discount Note that is less than the adjusted issue price, the difference will be subject to the market discount provisions discussed below. See "Market Discount."
Under the OID Regulations, a holder of a Note may elect to include in gross income all interest that accrues on such Note using the constant yield method. For this purpose, interest includes stated interest, acquisition discount, original issue discount, de minimis original issue discount, market discount, de minimis market discount, and unstated interest, as adjusted by any amortizable bond premium or acquisition premium. Special rules apply with respect to elections made with respect to Notes issued with amortizable bond premium or market discount. Once made with respect to a Note, the election cannot be revoked without the consent of the Service. A holder considering an election under these rules should consult its own tax advisor.
Market Discount. If a holder purchases a Note (other than a Discount Note) for an amount that is less than its issue price, or in the case of a subsequent purchaser, its stated redemption price at maturity, or purchases a Discount Note for less than its "revised issue price" (as defined under the Code) as of the purchase date, the amount of the difference will be treated as "market discount," unless such difference is less than a specified de minimis amount. Under the market discount rules of the Code, a holder will be required to treat any partial
principal payment (or, in the case of a Discount Note, any payment that does not constitute fixed periodic interest) on, or any gain realized on the sale, exchange or retirement of, a Note as ordinary income to the extent of the market discount that has not previously been included in income and is treated as having accrued on such Note at the time of such payment or disposition. Further, a disposition of a Note by gift (and in certain other circumstances) could result in the recognition of market discount income, computed as if such Note had been sold at its then fair market value. In addition, a holder who purchases a Note with market discount may be required to defer the deduction of all or a portion of the interest paid or accrued on any indebtedness incurred or continued to purchase or carry such Note until the Maturity of the Note or its earlier disposition in a taxable transaction.
Market discount is considered to accrue ratably during the period from the date of acquisition to the Maturity Date of a Note, unless the holder elects to accrue market discount under the rules applicable to original issue discount. A holder may elect to include market discount in income currently as it accrues, in which case the rules described above regarding the deferral of interest deductions will not apply.
Amortizable Bond Premium. Generally, if a holder's tax basis in a Note held as a capital asset exceeds the stated redemption price at maturity of such Note, such excess may constitute amortizable bond premium that the holder may elect to amortize under the constant interest rate method over the period from its acquisition date to the Note's Maturity Date. Under certain circumstances, amortizable bond premium may be determined by reference to an early call date.
Short-Term Notes. In general, an individual or other cash method holder of a Note that matures one year or less from the date of its issuance (a "Short- Term Note") is not required to accrue original issue discount on such Note unless it has elected to do so. Holders who report income for federal income tax purposes under the accrual method, however, and certain other holders, including banks, dealers in securities and electing holders, are required to accrue original issue discount (unless the holder elects to accrue "acquisition discount" in lieu of original issue discount) on such Note. "Acquisition discount" is the excess of the remaining stated redemption price at maturity of the Short-Term Note over the holder's tax basis in the Short- Term Note at the time of the acquisition. In the case of a holder who is not required and does not elect to accrue original issue discount on a Short-Term Note, any gain recognized on the sale, exchange or retirement of such Short- Term Note will be ordinary income to the extent of the original issue discount accrued through the date of sale, exchange or retirement. Such a holder will be required to defer, until such Short-Term Note is sold or otherwise disposed of, the deduction of a portion of the interest expense on any indebtedness incurred or continued to purchase or carry such Short-Term Note. Original issue discount or acquisition discount on a Short-Term Note accrues on a straight-line basis unless an election is made to use the constant yield method (based on daily compounding).
The market discount rules will not apply to a Short-Term Note having market discount.
NON-UNITED STATES PERSONS
Subject to the discussion of backup withholding below, payments of principal
of (and premium, if any, on) and interest (including original issue discount)
on Notes by the Company or its agent (in its capacity as such) to any holder
who is a Beneficial Owner of a Note but is not a United States person will not
be subject to United States federal withholding tax; provided, in the case of
premium, if any, and interest (including original issue discount) that (i)
such holder does not actually or constructively own 10% of more of the total
combined voting power of all classes of stock of the Company entitled to vote,
(ii) such holder is not a controlled foreign corporation for United States tax
purposes that is related to the Company through stock ownership, and (iii)
either (A) the Beneficial Owner of the Note certifies to the Company or its
agent, under penalties of perjury, that it is not a United States person and
provides its name and address or (B) a securities clearing organization, bank
or other financial institution that holds customers' securities in the
ordinary course of its trade or business (a "financial institution") certifies
to the Company or its agent, under penalties of perjury, that the
certification described in clause (A) hereof has been received from the
Beneficial Owner by it or by another financial institution acting for the
Beneficial Owner.
If a holder of a Note who is not a United States person is engaged in a trade or business in the United States and premium, if any, or interest (including original issue discount) on the Note is effectively connected with the conduct of such trade or business, such holder, although exempt from United States withholding tax, as discussed in the preceding paragraph (or by reason of the delivery of properly completed Form 4224), will be subject to United States federal income tax on such premium, if any, and interest (including original issue discount) in the same manner as if it were a United States person.
Subject to the discussion of "backup" withholding below, any capital gain realized upon the sale, exchange or retirement of a Note by a holder who is not a United States person will not be subject to United States federal income or withholding taxes unless (i) such gain is effectively connected with a United States trade or business of the holder, or (ii) in the case of an individual, such holder is present in the United States for 183 days or more in the taxable year of the retirement or disposition and certain other conditions are met.
Notes held by an individual who is neither a citizen nor a resident of the United States for United States federal income tax purposes at the time of such individual's death will not be subject to United States federal estate tax, provided that the income from the Notes was not or would not have been effectively connected with a United States trade or business of such individual and that such individual qualified for the exemption from United States federal withholding tax (without regard to the certification requirements) described above.
BACKUP WITHHOLDING AND INFORMATION REPORTING
"Backup" withholding and information reporting requirements may apply to certain payments of principal of (and premium, if any, on) and interest (including original issue discount) on a Note and to certain payments of proceeds of the sale or retirement of a Note. The Company, its agent, a broker, the Trustee or any Paying Agent, as the case may be, will be required to withhold tax from any payment that is subject to backup withholding at a rate of 31% of such payment if the holder fails to furnish its taxpayer identification number (social security number or employer identification number), to certify that such holder is not subject to backup withholding, or to otherwise comply with the applicable requirements of the backup withholding rules. Certain holders (including, among others, all corporations) are not subject to the backup withholding and reporting requirements.
Under current regulations, backup withholding and information reporting will not apply to payments made by the Company or any agent thereof (in its capacity as such) to a holder of a Note who has provided the required certification under penalties of perjury that it is not a United States person as set forth in clause (iii) in the first paragraph under "Non-United States Persons" or has otherwise established an exemption (provided that neither the Company nor such agent has actual knowledge that the holder is a United States person or that the conditions of any other exemption are not in fact satisfied).
Any amounts withheld under the backup withholding rules from a payment to a holder may be claimed as a credit against such holder's United States federal income tax liability.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE, DEPENDING UPON A HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
PLAN OF DISTRIBUTION
The Notes are being offered on a periodic basis for sale by the Company through Donaldson, Lufkin & Jenrette Securities Corporation, the Agent, who has agreed to use its reasonable best efforts to solicit offers to purchase the Notes. Unless otherwise specified in the applicable Pricing Supplement, the Company will pay the Agent a commission of .125% to .750% of the principal amount of each Note sold through the Agent, depending on the maturity of such Note (except that the Company and the Agent may agree to a higher commission for maturities in excess of 30 years). The Company may sell Notes to the Agent at a discount for resale to investors at varying prices related to prevailing market prices at the time of resale, to be determined by the Agent. The Company may also sell the Notes directly to investors on its behalf. In the case of sales made directly by the Company no commission will be payable. The Company has agreed to reimburse the Agent for certain expenses.
The Company may also sell Notes to the Agent, as principal. Unless otherwise specified in the applicable Pricing Supplement, any Note sold to the Agent as principal will be purchased by the Agent at a price equal to 100% of the principal amount thereof (or, in the case of a Note issued with Original Issue Discount, the public offering price), less a percentage equal to the commission applicable to an agency sale of a Note of identical maturity. Notes may be resold by the Agent to investors or other purchasers from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined by the Agent at the time of sale, or may be sold to certain dealers as described below. After the initial public offering of Notes to be resold to investors and other purchasers, the public offering price (in the case of Notes to be resold at a fixed offering price), concession and discount may be changed. In addition, the Agent may sell Notes to any dealer at a discount. The Company reserves the right to sell Notes directly on its behalf in those jurisdictions where it is authorized to do so. No commission will be allowed or be payable on any sales made directly by the Company.
The Company will have the sole right to accept offers to purchase Notes and may reject any proposed purchase of Notes in whole or in part. The Agent will have the right to reject any offer to purchase Notes received by it, in whole or in part, if it deems the offer unreasonable.
No Note will have an established trading market when issued. The Notes will not be listed on any securities exchange. The Agent may make a market in the Notes, but the Agent is not obligated to do so and may discontinue any market- making at any time without notice. There can be no assurance of a secondary market for any Notes, or that the Notes will be sold.
The Company has agreed to indemnify the Agent against certain liabilities, including liabilities under the Securities Act, and to contribute to payments the Agent may be required to make in respect thereof. The Agent may be deemed to be an "underwriter" within the meaning of the Securities Act.
In the ordinary course of its business, Donaldson, Lufkin & Jenrette Securities Corporation and/or its affiliates have engaged, and may in the future engage, in investment banking transactions with the Company and its affiliates.
APPENDIX A
GLOSSARY
Set forth below is a glossary of certain of the terms used in this Prospectus Supplement. Capitalized terms used herein that are not defined in the following glossary have the meanings given in the Indenture or in the accompanying Prospectus. Page references refer to pages of this Prospectus Supplement.
"Amortized Face Amount" of a Discount Note means the amount equal to (a) the issue price of such Discount Note set forth in the applicable Pricing Supplement plus (b) the portion of the difference between the issue price and the stated principal amount of such Discount Note that has accrued at the Yield to Maturity set forth in the Pricing Supplement (computed in accordance with generally accepted United States bond yield computation principles) at the date as of which the Amortized Face Amount is calculated, but in no event will the Amortized Face Amount of such Discount Note exceed its stated principal amount.
"Amortizing Notes" has the meaning set forth on page S-10.
"Base Rate" has the meaning set forth on page S-4.
"Beneficial Owner" of a Global Note means the actual owner of an interest therein.
"Business Day" with respect to any Note means, unless otherwise specified in the applicable Pricing Supplement, any day, other than a Saturday or Sunday, that is (i) not a day on which banking institutions are authorized or required by law or regulation to be closed in The City of New York and (ii) if such Note is a LIBOR Note, a London Banking Day.
"Calculation Agent" has the meaning set forth on page S-6.
"Calculation Date" has the meaning set forth on page S-6.
"CD Rate" has the meaning set forth on page S-7.
"CD Rate Notes" has the meaning set forth on page S-5.
"Certificated Note" has the meaning set forth on page S-3.
"Commercial Paper Rate" has the meaning set forth on page S-7.
"Commercial Paper Rate Notes" has the meaning set forth on page S-5.
"Composite Quotations" has the meaning set forth on page S-7.
"Depository" has the meaning set forth on page S-3.
"Discount Note" means (i) a Note, including any Zero-Coupon Note, that has been issued at an Issue Price lower, by more than a de minimis amount (as determined under United States federal income tax rules applicable to original issue discount instruments), than the principal amount thereof and (ii) any other Note that for United States federal income tax purposes would be considered an original issue discount note.
"DTC" has the meaning set forth on the cover page.
"Federal Funds Rate Notes" has the meaning set forth on page S-5.
"Federal Funds Rate" has the meaning set forth on page S-8.
"Fixed Rate Note" has the meaning set forth on page S-3.
"Floating Rate Note" has the meaning set forth on page S-3.
"Global Note" has the meaning set forth on page S-3.
"H.15(519)" has the meaning set forth on page S-7.
"Index" has the meaning set forth on page S-10.
"Index Maturity" for any Floating Rate Note means the period of maturity of the instrument or obligation from which the Base Rate is calculated.
"Indexed Notes", "Indexed Principal Notes" and "Indexed Rate Notes" have the meanings set forth on page S-10.
"Initial Interest Period" has the meaning set forth on page S-4.
"Initial Interest Rate" has the meaning set forth on page S-4.
"Interest Determination Date" has the meaning set forth on page S-6.
"Interest Payment Date" with respect to any Note means a date (other than at Maturity) on which, under the terms of such Note, regularly scheduled interest will be payable.
"Interest Reset Date" has the meaning set forth on page S-5.
"Interest Reset Period" has the meaning set forth on page S-5.
"LIBOR," "LIBOR Telerate" and "LIBOR Reuters" have the meanings set forth on page S-8.
"LIBOR Notes" has the meaning set forth on page S-5.
"London Banking Day" means any day on which dealings in deposits in the currency specified in the applicable pricing supplement are transacted in the London interbank market.
"Maturity" means the date on which the outstanding principal amount of a Note becomes due and payable in full in accordance with its terms, whether at its Maturity Date or by declaration of acceleration, call for redemption, repayment or otherwise.
"Maturity Date" with respect to any Note means the date on which such Note is scheduled to mature, as specified thereon.
"Maximum Interest Rate" has the meaning set forth on page S-6.
"Minimum Interest Rate" has the meaning set forth on page S-6.
"Money Market Yield" has the meaning set forth on page S-8.
"Notes" has the meaning set forth on the cover page.
"OID Regulations" has the meaning set forth on page S-16.
"Optional Reset Date" has the meaning set forth on page S-11.
"Participants" has the meaning set forth on page S-12.
"Prime Rate" has the meaning set forth on page S-9.
"Prime Rate Notes" has the meaning set forth on page S-5.
"Reference Banks" has the meaning set forth on page S-9.
"Regular Record Date" with respect to any Interest Payment Date for a Fixed Rate Note means the first calendar day (whether or not a Business Day) of the month in which such Interest Payment Date occurs; and with respect to any Interest Payment Date for a Floating Rate Note means the date (whether or not a Business Day) 15 calendar days prior to such Interest Payment Date.
"Reset Notice" has the meaning set forth on page S-11.
"Reuters Screen LIBO Page" has the meaning set forth on page S-8.
"Reuters Screen NYMF Page" has the meaning set forth on page S-9.
"Spread" and "Spread Multiplier" have the meanings set forth on page S-5.
"Subsequent Interest Period" has the meaning set forth on page S-11.
"Telerate Page 3750" has the meaning set forth on page S-8.
"Treasury Rate" has the meaning set forth on page S-10.
"Treasury Rate Notes" has the meaning set forth on page S-5.
"Underlying Assets" has the meaning set forth on page S-14.
"Zero Coupon Note" has the meaning set forth on page S-3.
References herein to "U.S. dollars" or "$" are to the currency of the United States.