Exhibit 4M
AMENDED AND RESTATED TRUST AGREEMENT
OF
MET-ED CAPITAL TRUST
MET-ED CAPITAL II, L.P.
as Grantor
and
THE BANK OF NEW YORK (Delaware)
as Delaware Trustee
and
THE BANK OF NEW YORK
as Property Trustee
and
as Regular Trustees
Dated as of , 1998
-------------
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS 1
ARTICLE II - CONTINUATIUON OF TRUST 6
Section 2.1 Continuation of Trust 6
Section 2.2 Situs of Trust 7
ARTICLE III - TRUST INDENTURE ACT 7
Section 3.1 Trust Indenture Act; Application 7
Section 3.2 Lists of Holders of Trust Securities 7
Section 3.3 Reports by the Property Trustee 8
Section 3.4 Periodic Reports to Property Trustee 8
Section 3.5 Evidence of Compliance with
Conditions Precedent 8
Section 3.6 Trust Enforcement Events; Waiver 8
Section 3.7 Trust Enforcement Events; Notice 9
ARTICLE IV - ORGANIZATION 10
Section 4.1 Name 10
Section 4.2 Office 10
Section 4.3 Purpose 10
Section 4.4 Authority 10
Section 4.5 Title to Property of the Trust 11
Section 4.6 Power and Duties of the Regular
Trustees 11
Section 4.7 Prohibitions of Actions by the Trust
And the Trustees 13
Section 4.8 Powers and Duties of the Property
Trustee 14
Section 4.9 Certain Duties and Responsibilities
Of the Property Trustee 16
Section 4.10 Certain Rights of Property Trustee 18
Section 4.11 Delaware Trustee 20
Section 4.12 Not Responsible for Recitals or
Issuance of Trust Securities 20
Section 4.13 Execution of Documents 20
Section 4.14 Responsibilities of the Grantor 21
Section 4.15 Indemnification and Expenses of the
Property Trustee and the Delaware
Trustee 21
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ARTICLE V - FORM OF TRUST SECURITIES, EXECUTION AND
DELIVERY, TRANSFER AND SURRENDER OF TRUST SECURITIES 22
Section 5.1 Form and Transferability of Trust
Securities 22
Section 5.2 Issuance of Trust Securities 23
Section 5.3 Registration, Transfer and Exchange
Of Trust Securities 24
Section 5.4 Lost or Stolen Trust Securities, Etc. 25
Section 5.5 Cancellation and Destruction of
Surrendered Trust Securities 25
Section 5.6 Surrender of Trust Securities and
Withdrawal of Preferred Securities 25
Section 5.7 Redeposit of Preferred Securities 26
Section 5.8 Filing Proofs, Certificates and
Other Information 27
Section 5.9 CUSIP Numbers 27
ARTICLE VI - DISTRIBUTIONS AND OTHER RIGHTS OF HOLDERS
OF TRUST SECURITIES 28
Section 6.1 Distributions of Distributions on
Preferred Securities 28
Section 6.2 Redemptions of Preferred Securities 28
Section 6.3 Distributions in Liquidation of Grantor 29
Section 6.4 Fixing of Record Date for Holders of
Trust Securities 30
Section 6.5 Payment of Distributions 30
Section 6.6 Special Representative and Voting Rights 30
Section 6.7 Changes Affecting Preferred Securities and
Reclassifications, Recapitalizations, Etc. 31
ARTICLE VII - TRUSTEES 32
Section 7.1 Number of Trustees 32
Section 7.2 Delaware Trustee 32
Section 7.3 Property Trustee, Eligible 32
Section 7.4 Qualifications of the Regular Trustee
And the Delaware Trustee Generally 33
Section 7.5 Regular Trustees 33
Section 7.6 Delaware Trustee 33
Section 7.7 Appointment, Removal and Resignation
Of Trustees 34
Section 7.8 Vacancies among Trustees 35
Section 7.9 Effect of Vacancies 35
Section 7.10 Merger, Conversion, Consolidation or
Succession to Business 36
Section 7.11 Status of Trust 36
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ARTICLE VIII - DISSOLUTION AND TERMINATION 36
Section 8.1 Dissolution of Trust 36
Section 8.2 Winding Up 37
ARTICLE IX - MERGER, CONSOLIDATION, ETC. OF GRANTOR OR
TRUST 37
Section 9.1 Limitation on Permitted Merger
Consolidation, Etc. of Grantor 37
Section 9.2 Mergers and Consolidations of Trust 37
ARTICLE X - LIMITATION OF LIABILITY OF HOLDERS OF
TRUST SECURITIES, TRUSTEES OR OTHERS 39
Section 10.1 Liability 39
Section 10.2 Exculpation 40
Section 10.3 Fiduciary Duty 41
Section 10.4 Indemnification 42
Section 10.5 Outside Businesses 45
ARTICLE XI - AMENDMENTS AND MEETINGS 45
Section 11.1 Amendments 45
Section 11.2 Meetings of the Holders of Trust
Securities; Action by Written Consent 48
ARTICLE XII - REPRESENTATIONS OF PROPERTY TRUSTEE AND
DELAWARE TRUSTEE 50
Section 12.1 Representations and Warranties of
Property Trustee 50
Section 12.2 Representations and Warranties of
Delaware Trustee 50
ARTICLE XIII - MISCELLANEOUS 51
Section 13.1 Notices 52
Section 13.2 Governing Law 52
Section 13.3 Intention of the Parties 52
Section 13.4 Headings 52
Section 13.5 Successors and Assigns 52
Section 13.6 Partial Enforceability 52
Section 13.7 Counterparts 52
Section 13.8 Agreement to be Bound 52
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CROSS-REFERENCE TABLE*
SECTION OF
SECTION OF ACT TRUST AGREEMENT
- -------------- ---------------
310(a)(1) and (2) 7.3(a)
310(a)(3) and (4) Inapplicable
310(b) 7.3(c)
310(c) Inapplicable
311(a) 3.2(b)
311(b) 3.2(b)
311(c) Inapplicable
312(a) 3.2(a)
312(b) 3.2(b)
312(c) 3.2(b)
313(a),(b)(2),(c) and (d) 3.3
313(b)(1) Inapplicable
314(a) 3.4 and 4.6(j)
314(b) Inapplicable
314(c)(1) and (2) 3.4 and 3.5
314(c)(3) Inapplicable
314(d) Inapplicable
314(e) 1.1
314(f) Inapplicable
315(a) and (d) 4.9(b)
315(b) 3.6(a)and 3.6(a)
315(c) 4.9(a)
315(e) 3.1(a)
316(a)(1) 3.69a) and 3.6(b)
316(a)(2) Not required
316(a) (last sentence) 1.1
316(b) 3.1(a)
316(c) 4.6(d)
317(a) 3.1(a)
317(b) 4.8(g)
318(a) 3.1(c)
- -------------------------
* This Cross-Reference Table does not constitute part of this Trust Agreement
and shall not affect the interpretation of any of its terms or provisions.
AMENDED AND RESTATED TRUST AGREEMENT
AMENDED AND RESTATED TRUST AGREEMENT, dated as of , 1998 (as amended,
modified, supplemented or restated from time to time, the "Trust Agreement"), is
among MET-ED CAPITAL II, L.P., a Delaware limited partnership, as grantor, THE
BANK OF NEW YORK (Delaware), as trustee, the Regular Trustees (as defined
herein), THE BANK OF NEW YORK, as trustee, and the Holders (as defined herein).
W I T N E S S E T H:
--------------------
WHEREAS, the Trustees (as defined below) and the Grantor (as defined
below) established the Trust (as defined below) under the Delaware Business
Trust Act (12 Del. C. Section 3801, et seq.), pursuant to a Trust Agreement,
dated as of , 1998 (the "Original Trust Agreement"), and a Certificate of Trust
filed with the Secretary of State of the State of Delaware on , 1998; and
WHEREAS, the parties hereto desire to continue the Trust and to amend and
restate in its entirety the Original Trust Agreement; and
WHEREAS, the Trust proposes to issue Trust Securities (as defined below),
each representing a Preferred Security (as defined below) of the Grantor; and
WHEREAS, interests in the Trust are to be evidenced by Trust Security
certificates executed by the Property Trustee in accordance with this Trust
Agreement, which are to be delivered to the Holders;
NOW, THEREFORE, in consideration of the premises contained herein and
intending to be legally bound hereby, it is agreed by and among the parties
hereto to amend and restate in its entirety the Original Trust Agreement as
follows:
ARTICLE I
DEFINITIONS
The following definitions shall apply to the respective terms (in the
singular and plural forms of such terms) used in this Trust Agreement and the
Trust Securities:
"Affiliate" of any specified Person means any other Person controlling
or controlled by or under common control with such specified Person. For the
purposes of this definition, "control"
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when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Business Day" means any day other than a day on which banking
institutions in the City of New York or the State of Delaware are closed for
business.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. Section 3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depository for the
Trust Securities. The initial clearing Agency shall be DTC.
"Commission" means the Securities and Exchange Commission.
"Company Indemnified Person" means: (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any representatives or agents of any
Regular Trustee; or (d) any officer, director, shareholder, member, partner,
employee, representative or agent of the Trust or its Affiliates.
"Corporate Office" means the office of the Delaware Trustee at which, at
any particular time, its business in respect of matters governed by this Trust
Agreement shall be administered, which office at the date hereof is located at
White Clay Center, Rte. 273, Newark, Delaware 19711.
"Corporate Trust Office" means the principal corporate trust office of the
Property Trustee at which, at any particular time, its corporate trust business
shall be administered, which office at the date hereof is located at 101 Barclay
Street, 21st Floor, New York, NY 10286.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii)
the Trust's Affiliates; and (b) any Holder of Trust Securities.
"Delaware Trustee" has the meaning set forth in Section 7.2 of this
Trust Agreement.
"DTC" means The Depository Trust Company or any successor thereto.
"Distributions" has the meaning set forth in Article VI.
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"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b) of this Trust Agreement.
"General Partner" means Met-Ed Preferred Capital II, Inc., a Delaware
corporation, as general partner of the Grantor, and any successor thereto
pursuant to the terms of the Partnership Agreement.
"Grantor" means Met-Ed Capital II, L.P., a Delaware limited partnership
formed pursuant to the Partnership Agreement, and any successor entity thereto.
"Guarantee" means the Payment and Guarantee Agreement dated as of
_____________, 1998, as amended from time to time, with respect to the Preferred
Securities and received by the Grantor from Met-Ed and delivered by the Grantor
to the Trust.
"Holder" means the Person in whose name a certificate representing one or
more Trust Securities is registered on the Register maintained by the Registrar
for such purposes, such Person being a beneficial owner within the meaning of
the Business Trust Act.
"Indemnified Person" means: a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Legal Action" has the meaning set forth in Section 4.6(g) of this
Trust Agreement.
"Majority in liquidation amount of the Trust Securities" means, except as
provided in the terms of the Trust Securities or by the Trust Indenture Act,
Holders of outstanding Trust Securities, who are the record owners of more than
50% of the aggregate liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Trust Securities.
"Ministerial Action" means a ministerial action (such as filing a form or
making an election or pursuing some other similar reasonable measure) which in
the sole judgment of the Grantor has or will cause no adverse effect on the
Trust, the Grantor, or the Holders of the Trust Securities and will involve no
material cost.
"1940 Act" means the Investment Company Act of 1940, as amended from time
to time, or any successor legislation.
"Officers' Certificate" means, with respect to any Person (who is not a
natural person), a certificate signed by two
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Responsible Officers of such Person, and, with respect to a natural person, a
certificate signed by such person. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this Trust
Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Partnership" means Met-Ed Capital II, L.P., a Delaware limited
partnership formed pursuant to the Partnership Agreement, and any successor
entity thereto.
"Partnership Agreement" means the Amended and Restated Limited Partnership
Agreement of the Grantor dated as of , 1998, as amended from time to time,
together with any Action (as defined in the Partnership Agreement) established
by the General Partner.
"Paying Agent" means the Person from time to time acting as Paying Agent
as provided in Section 4.8(g) of this Trust Agreement.
"Met-Ed" means Metropolitan Edison Company, a Pennsylvania
corporation.
"Person" means any natural person, general partnership, limited
partnership, corporation, limited liability company, joint venture, trust,
business trust, cooperative or association and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person
where the context so admits.
"Preferred Securities" means the cumulative preferred securities,
representing preferred limited partner interests of the Grantor, or any
Successor Securities issued to the Trust and held by the Trustee from time to
time under this Trust Agreement for the benefit of the Holders.
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"Property Account" has the meaning set forth in Section 4.8(c) of this
Trust Agreement.
"Property Trustee" has the meaning set forth in Section 7.3 of this
Trust Agreement.
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.
"Register" has the meaning set forth in Section 5.3.
"Registrar" means any bank or trust company appointed to register Trust
Security certificates and to register transfers thereof as herein provided.
"Regular Trustee" has the meaning set forth in Section 7.5 of this
Trust Agreement.
"Responsible Officer" means, with respect to the Property Trustee, any
officer within the Corporate Trust Office of the Property Trustee and, with
respect to the Delaware Trustee, any officer within the Corporate Office of the
Delaware Trustee, including, in either case, any vice-president, any assistant
vice-president, any secretary, any assistant secretary, the treasurer, any
assistant treasurer or other officer of the Corporate Trust Office of the
Property Trustee or any authorized signatory of the Delaware Trustee, as the
case may be, customarily performing functions similar to those performed by any
of the above designated officers, who has direct responsibility for the
administration of the Trust, and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Special Event" has the meaning set forth in Article I of the
Partnership Agreement.
"Special Representative" has the meaning set forth in Section 13.02(d)
of the Partnership Agreement.
"Successor Property Trustee" shall have the meaning set forth in
Section 7.7(b)(i).
"Successor Securities" has the meaning set forth in Section 13.02(e) of
the Partnership Agreement.
"Trust" means the trust governed by this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be amended, modified or supplemented from time to time.
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"Trustees" mean the collective reference to the Delaware Trustee, the
Property Trustee, and the Regular Trustees.
"Trust Enforcement Event" means the occurrence, at any time, of (i)
arrearages on distributions on the Trust Securities that shall exist for
consecutive distribution periods or (ii) a default by Met-Ed in respect of
any of its obligations under the Guarantee.
"Trust Estate" means all right, title and interest of the Trust in and to
the Preferred Securities (including any Successor Securities), and all
distributions and payments with respect thereto, including payments by Met-Ed
under the Guarantee. "Trust Estate" shall not include any amounts paid or
payable to the Trustee pursuant to this Trust Agreement, including, without
limitation, fees, expenses and indemnities.
"Trust Indenture Act" means The Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Security" or "Trust Securities" means a Trust Security issued
hereunder representing a beneficial interest in the Trust equal to and
representing a Preferred Security and evidenced by a certificate authenticated
by the Property Trustee pursuant to Article V.
ARTICLE II
CONTINUATION OF TRUST
Section 2.1. Continuation of Trust
The Trust exists for the purpose described in Section 4.3 of this Trust
Agreement. The Grantor shall deliver to the Property Trustee for deposit in the
Trust a certificate representing the Preferred Securities for the benefit of the
Holders. Each Holder is intended by the Grantor to be the beneficial owner of
the number of Preferred Securities represented by the Trust Securities held by
such Holder, not to hold an undivided interest in all of the Preferred
Securities. To the fullest extent permitted by law, without the need for any
other action of any Person, including the Trustees and any other Holder, each
Holder shall be entitled to enforce in the name of the Trust the Trust's rights
under the Preferred Securities represented by the Trust Securities held by such
Holder and any recovery on such an enforcement action shall belong solely to
such Holder who brought the action, not to the Trust, the Trustees or any other
Holder
6
individually or to Holders as a group. Subject to Article VIII, this Trust
shall be irrevocable.
Section 2.2. Situs of Trust. The Trust's bank account shall be
maintained with a bank in the State of New York. The Trust Estate shall be
held in the State of New York.
ARTICLE III
TRUST INDENTURE ACT
Section 3.1 Trust Indenture Act; Application
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions, including, but not
limited to, Sections 315(e), 316(b) and 317(a) of the Trust Indenture Act.
(b) The Property Trustee shall be the only Trustee which is a Trustee for
the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Trust Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such duties imposed by the Trust
Indenture Act shall control.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as securities representing
Preferred Securities pursuant to Section 2.1 of this Trust Agreement.
Section 3.2 Lists of Holders of Trust Securities.
(a) The Grantor and the Regular Trustees on behalf of the Trust shall
provide the Property Trustee unless the Property Trustee is the Registrar for
the Trust Securities (i) within 14 days after each record date for payment of
Distributions, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders of the Trust Securities
("List of Holders") as of such record date, provided that neither the Grantor
nor the Regular Trustees on behalf of the Trust shall be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Property Trustee by the Grantor and the
Regular Trustees on behalf of the Trust, and (ii) at any other time, within 30
days of receipt by the Trust of a written request for a List of Holders, a List
of Holders as of a date no more than 14 days before such List of Holders is
given to the Property Trustee. The Property Trustee shall preserve, in as
current a
7
form as is reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Paying Agent (if acting in
such capacity) provided that the Property Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act. The Property Trustee and
the Grantor are protected under Section 312(c) of the Trust Indenture Act.
Section 3.3 Reports by the Property Trustee. Within 60 days after May 31
of each year beginning with the May 31 next following the date of this Trust
Agreement, the Property Trustee shall provide to the Holders of the Trust
Securities such reports as are required by Section 313(a) of the Trust Indenture
Act, if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Property Trustee shall also comply with Section 313(b) of the
Trust Indenture Act, if and as required, in the form and manner provided by
Section 313 of the Trust Indenture Act. The Property Trustee shall also comply
with the requirements of Section 313(d) of the Trust Indenture Act.
Section 3.4 Periodic Reports to Property Trustee. Each of the Grantor and
the Regular Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as are required by Section
314(a) of the Trust Indenture Act, if any, and the compliance certificate
required by Section 314(a) of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314(a) of the Trust Indenture Act.
Section 3.5 Evidence of Compliance with Conditions Precedent. Each of the
Grantor and the Regular Trustees on behalf of the Trust shall provide to the
Property Trustee such evidence of compliance with any conditions precedent, if
any, provided for in this Trust Agreement that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
Section 3.6 Trust Enforcement Events; Waiver
(a) The Holders of a Majority in liquidation amount of the Trust
Securities may, by vote, on behalf of the Holders of all of the Trust
Securities, waive any past Trust Enforcement Event in respect of the Trust
Securities and its consequences, provided that, if the underlying event of
default:
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(i) is not waivable under the Guarantee or the Partnership
Agreement, the Trust Enforcement Event under this Trust Agreement shall also not
be waivable; or
(ii) requires the consent or vote of the Holders of greater than a
Majority in liquidation amount of the Trust Securities to be waived under the
Guarantee or the Preferred Securities to be waived under the Partnership
Agreement (a "Super Majority"), the Trust Enforcement Event under this Trust
Agreement may only be waived by the vote of the Holders of at least the relevant
Super Majority in liquidation amount of the Trust Securities.
The foregoing provisions of this Section 3.6(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Trust Agreement
and the Trust Securities, as permitted by the Trust Indenture Act. Upon such
waiver, any such default shall cease to exist, and any Trust Enforcement Event
with respect to the Trust Securities arising therefrom shall be deemed to have
been cured, for every purpose of this Trust Agreement, but no such waiver shall
extend to any subsequent or other default or Trust Enforcement Event with
respect to the Trust Securities or impair any right consequent thereon.
(b) A waiver of non-performance or a default under the Partnership
Agreement or the Guarantee, as the case may be, at the direction of the Holders
of the Trust Securities or a Special Representative, of which the Property
Trustee shall have received notice, constitutes a waiver of the corresponding
Trust Enforcement Event under this Trust Agreement. The foregoing provisions of
this Section 3.6(b) shall be in lieu of Section 316(a)(1)(B) of the Trust
Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby
expressly excluded from this Trust Agreement and the Trust Securities, as
permitted by the Trust Indenture Act.
Section 3.7 Trust Enforcement Event; Notice. The Property Trustee shall,
within 90 days after the occurrence of a Trust Enforcement Event, transmit by
mail, first class postage prepaid, to the Holders of the Trust Securities as the
names and addresses of the Holders appear on the books and records of the Trust,
notices of all defaults with respect to the Trust Securities actually known to a
Responsible Officer of the Property Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults" for the purposes of
this Section 3.7 being hereby defined to be defaults as defined in the Guarantee
or instances of non-performance under the Partnership Agreement, as the case may
be, not including any periods of grace provided
9
for therein and irrespective of the giving of any notice provided therein);
provided that, the Property Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Property Trustee in good
faith determines that the withholding of such notice is in the interests of the
Holders of the Trust Securities. The Property Trustee shall not be deemed to
have knowledge of any default except if the Property Trustee shall have received
written notice or has actual notice of such default.
ARTICLE IV
ORGANIZATION
Section 4.1 Name. The Trust is named "Met-Ed Capital Trust", as such name
may be modified from time to time by the Regular Trustees following written
notice to the Holders of Trust Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Regular Trustees.
Section 4.2 Office. The address of the principal office of the Trust is
the Corporate Trust Office. On ten Business Days written notice to the Holders
of Trust Securities, the Regular Trustees may designate another principal
office.
Section 4.3 Purpose. The exclusive purposes and functions of the Trust are
(a) to issue and sell Trust Securities and to use the proceeds from such sales
to acquire the Preferred Securities, and (b) except as otherwise limited herein,
to engage in only those other activities necessary or incidental thereto. The
Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to be
undertaken) any activity that would be inconsistent with the Trust being
classified for United States federal income tax purposes as a grantor trust.
Section 4.4 Authority. Subject to the limitations provided in this Trust
Agreement and to the specific duties of the Property Trustee, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust and an action
taken by the Property Trustee on behalf of the Trust in accordance with its
powers shall constitute the act of and serve to bind the Trust. In dealing with
the Trustees and the Grantor acting on behalf of the Trust, no Person shall be
required to inquire into the authority of the Trustees or the Grantor to bind
the Trust. Persons dealing with the Trust are entitled to rely conclusively on
the power and authority of the Trustees and the Grantor as set forth in this
Trust Agreement.
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Section 4.5 Title to Property of the Trust. Except as provided in Section
4.8 with respect to the Preferred Securities and the Property Account or as
otherwise provided in this Trust Agreement, legal title to all assets of the
Trust shall be vested in the Trust. The Holders shall not have legal title to
any part of the assets of the Trust, but shall have a beneficial ownership
interest in certain Preferred Securities pursuant to Section 2.1 of this Trust
Agreement.
Section 4.6 Power and Duties of the Regular Trustees. The Regular Trustees
shall have exclusive power, duty and authority to cause the Trust to engage in
the following activities and shall use good faith in the performance of the
following duties and such other duties required to be performed by them under
this Trust Agreement:
(a) To issue and sell the Trust Securities in accordance with this Trust
Agreement, and to execute and deliver (after authentication thereof by the
Property Trustee certificates representing the Trust Securities; provided,
however, that there shall be no interests in the Trust other than the Trust
Securities;
(b) To acquire the Preferred Securities with the proceeds of the sales of
the Trust Securities, including the execution and delivery of the Partnership
Agreement in connection therewith on behalf of the Trust, as a limited partner;
provided, however, that the Regular Trustees shall cause legal title to the
Preferred Securities to be held of record in the name of the Property Trustee
for the benefit of the Holders of the Trust Securities;
(c) To give the Grantor and the Property Trustee prompt written notice of
the occurrence of a Trust Enforcement Event.
(d) To establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Trust Securities as to such actions and applicable
record dates;
(e) To give prompt written notice to the Holders of the Trust Securities
and the Property Trustee of any notice received from the Partnership of the
General Partner's election not to make a current distribution on the Preferred
Securities under the Partnership Agreement;
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(f) To take all actions and perform such duties as may be required of the
Regular Trustees pursuant to the terms of the Trust Securities;
(g) To bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless, pursuant to Sections 4.8(f), the Property Trustee has
the power to bring such Legal Action;
(h) To employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) To cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) To give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Regular Trustee;
(k) To incur expenses that are necessary or incidental to carry out any of
the purposes of the Trust;
(l) To act as, or appoint another Person to act as, Registrar and transfer
agent for the Trust Securities;
(m) To take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Trust
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(n) To take any action, or to take no action, not inconsistent with this
Trust Agreement or with applicable law, that any Regular Trustee determines in
its discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 4.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the 1940 Act;
(ii) taking no action which would be inconsistent with the Trust
being classified as a grantor trust for United States federal income tax
purposes; provided that such action does not materially adversely affect the
interests of Holders;
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(o) To take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust;
and
(p) To execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
Subject to this Section 4.6, the Regular Trustees shall have none of the
duties, liabilities, powers or the authority of the Property Trustee set forth
in Section 4.8.
The Regular Trustees must exercise the powers set forth in this Section
4.6 in a manner that is consistent with the purposes and functions of the Trust
set forth in Section 4.3, and the Regular Trustees shall not take any action
that is inconsistent with the purposes and functions of the Trust set forth in
Section 4.3. Any expenses incurred by the Regular Trustees pursuant to this
Section 4.6 shall be reimbursed by the General Partner pursuant to Section 8.03
of the Partnership Agreement and Section 4.15 of this Trust Agreement.
Section 4.7 Prohibition of Actions by the Trust and the Trustees. The
Trust shall not, and the Trustees shall cause the Trust not to, engage in any
activity other than as required or authorized by this Trust Agreement. In
particular, the Trust shall not and the Trustees shall cause the Trust not to:
(a) invest any proceeds received by the Trust from holding the Preferred
Securities, but shall distribute all such proceeds to Holders of Trust
Securities pursuant to the terms of this Trust Agreement and of the Trust
Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans or incur any indebtedness or acquire any securities
other than the Preferred Securities;
(e) possess any power or otherwise act in such a way as to vary the Trust
assets or the terms of the Trust Securities in any way whatsoever;
(f) issue any securities or other evidences of beneficial ownership of, or
beneficial interest in, the Trust other than the Trust Securities;
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(g) other than as set forth herein, (A) cause the Special Representative
to direct the time, method and place of conducting any proceeding for any remedy
available to the Special Representative or exercising any trust or power
conferred upon the Special Representative with respect to the Preferred
Securities and the Guarantees, (B) cause the Special Representative to waive any
non-performance that is waivable under the Partnership Agreement, or (C) consent
to any amendment, modification or termination of the Partnership Agreement or
the Preferred Securities where such consent shall be required; and
(h) other than in connection with the liquidation of the Trust pursuant to
a Trust Enforcement Event or upon redemption of all the Trust Securities or
dissolution and winding up of the Trust in accordance with this Agreement, file
a certificate of cancellation of the Trust.
Section 4.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Preferred Securities shall be owned by and held
of record in the name of the Property Trustee in trust for the benefit of the
Holders of the Trust Securities. The right, title and interest of the Property
Trustee to the Preferred Securities shall vest automatically in each Person who
may hereafter be appointed as Property Trustee in accordance with Section 7.7.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Preferred Securities have been
executed and delivered.
(b) The Property Trustee shall not transfer its right, title and interest
in the Preferred Securities to the Regular Trustees or the Delaware Trustee (if
the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Account") in the name of and under the exclusive control
of the Property Trustee on behalf of the Holders of the Trust Securities and,
upon the receipt of payments of funds made in respect of the Preferred
Securities held by the Property Trustee, deposit such funds into the Property
Account and make payments to the Holders of the Trust Securities from the
Property Account in accordance with Article VI. Funds in the Property Account
shall be held uninvested until disbursed in accordance with this Trust
Agreement. The Property Account shall be an account that is maintained with a
banking institution authorized to exercise corporate trust powers and having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal or state authority;
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(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Trust Securities to the extent the
Preferred Securities are redeemed; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Trust Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Trust Estate to Holders of Trust Securities.
(d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms of
this Trust Agreement.
(e) The Property Trustee shall take any Legal Action which arises out of
or in connection with (i) a Trust Enforcement Event of which a Responsible
Officer of the Property Trustee has actual knowledge or (ii) the Property
Trustee's duties and obligations under this Trust Agreement or the Trust
Indenture Act.
(f) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a Holder of Preferred Securities and, if a
Trust Enforcement Event occurs and is continuing, the Property Trustee shall,
for the benefit of Holders of the Trust Securities, enforce its rights as Holder
of the Preferred Securities subject to the rights of the Holders pursuant to the
terms of this Trust Agreement.
(g) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Trust Securities and any
such Paying Agent shall comply with Section 317(b) of the Trust Indenture Act.
Any Paying Agent may be removed by the Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Property Trustee.
(h) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Trust Securities pursuant to the terms
of the Trust Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 7.6.
Subject to this Section 4.8, the Property Trustee shall have none of the
duties, liabilities, powers or the authority of the Regular Trustees set forth
in Section 4.6.
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The Property Trustee must exercise the powers set forth in this Section
4.8 in a manner that is consistent with the purposes and functions of the Trust
set forth in Section 4.3, and the Property Trustee shall not take any action
that is inconsistent with the purposes and functions of the Trust set forth in
Section 4.3. Any expenses incurred by the Property Trustee pursuant to this
Section 4.8 shall be reimbursed by the General Partner pursuant to Section 8.03
of the Partnership Agreement and Section 4.15 of this Trust Agreement.
Section 4.9 Certain Duties and Responsibilities of the Property Trustee
(a) The Property Trustee, before the occurrence of any Trust Enforcement
Event and after the curing or waiver of all Trust Enforcement Events that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Trust Agreement and no implied covenants shall be read into
this Trust Agreement against the Property Trustee. In case a Trust Enforcement
Event has occurred (that has not been cured or waived pursuant to Section 3.6)
of which a Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Trust Agreement, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Trust Agreement shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of a Trust Enforcement Event and after
the curing or waiving of all such Trust Enforcement Events that may have
occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Trust Agreement and the
Property Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Trust Agreement, and no
implied covenants or obligations shall be read into this Trust Agreement against
the Property Trustee; and
(B) in the absence of bad faith on the part of the Property Trustee,
the Property Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Property Trustee and conforming to the requirements of
this Trust Agreement; but in the case of any such certificates or opinions that
by any provision hereof are
16
specifically required to be furnished to the Property Trustee, the Property
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Trust Agreement;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property Trustee,
unless it shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in liquidation amount of
the Trust Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under this Trust Agreement;
(iv) no provision of this Trust Agreement shall require the
Property Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Trust Agreement or indemnity reasonably
satisfactory to the Property Trustee against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody,
safekeeping and physical preservation of the Preferred Securities and the
Property Account shall be to deal with such property in a similar manner as the
Property Trustee deals with similar property for its own account, subject to the
protections and limitations on liability afforded to the Property Trustee under
this Trust Agreement and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or sufficiency of the
Preferred Securities or the payment of any taxes or assessments levied thereon
or in connection therewith;
(vii) money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Account maintained by
the Property Trustee pursuant to Section 4.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Regular Trustees or the
17
Grantor with their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for any default or misconduct of the Regular Trustees
or the Grantor.
Section 4.10 Certain Rights of Property Trustee
(a) Subject to the provisions of Section 4.9:
(i) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed, sent or presented
by the proper party or parties;
(ii) any direction or act of the Grantor or the Regular Trustees
acting on behalf of the Trust contemplated by this Trust Agreement shall be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly delivered by
the Grantor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or re-registration thereof;
(v) the Property Trustee may, at the expense of the General Partner,
consult with counsel or other experts of its selection and the advice or opinion
of such counsel and experts with respect to legal matters or advice within the
scope of such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with such advice or opinion;
such counsel may be counsel to the Grantor or any of its Affiliates, and may
include any of its employees. The Property Trustee shall have the right at any
time to seek instructions concerning the administration of this Trust Agreement
from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this
18
Trust Agreement at the request or direction of any Holder, unless such Holder
shall have provided to the Property Trustee security and indemnity, reasonably
satisfactory to the Property Trustee, against the fees, charges, costs, expenses
(including attorneys' fees and expenses and the expenses of the Property
Trustee's agents, nominees or custodians) and liabilities that might be incurred
by it in complying with such request or direction, including such reasonable
advances as may be requested by the Property Trustee provided, that, nothing
contained in this Section 4.10(a)(vi) shall be taken to relieve the Property
Trustee, upon the occurrence of a Trust Enforcement Event, of its obligation to
exercise the rights and powers vested in it by this Trust Agreement;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Property Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, custodians, nominees or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Trust Securities, and the
signature of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action and no third party shall be required to
inquire as to the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this Trust Agreement, both of
which shall be conclusively evidenced by the Property Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (a) may request instructions from the Holders of the Trust Securities,
which instructions may only be given by the Holders of the same proportion in
liquidation amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of this Trust Agreement in respect of such
remedy, right or action, (b) may refrain from enforcing such remedy or right or
taking
19
such other action until such instructions are received, and (c) shall be
protected in conclusively relying on or acting in accordance with such
instructions; and
(xi) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Trust Agreement.
In the event that the Property Trustee is also acting as Paying Agent,
transfer agent and security registrar, the rights and protections afforded to
the Property Trustee pursuant to this Article IV shall also be afforded to such
Paying Agent, transfer agent and security registrar.
(b) No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 4.11 Delaware Trustee. Notwithstanding any provision of this Trust
Agreement other than Section 7.2, the Delaware Trustee shall not be entitled to
exercise any powers, nor shall the Delaware Trustee have any of the duties,
liabilities and responsibilities or the authority of the Regular Trustees or
Property Trustee described in this Trust Agreement. Except as set forth in
Section 7.2, the Delaware Trustee shall be a Trustee for the sole and limited
purpose of fulfilling the requirements of Section 3807 of the Business Trust
Act. In no event shall the Property Trustee or the Delaware Trustee be liable
for any act or omission of any of the Regular Trustees hereunder.
Section 4.12 Not Responsible for Recitals or Issuance of Trust Securities
The recitals contained in this Trust Agreement and the Trust Securities shall be
taken as the statements of the Grantor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this Trust
Agreement or the Trust Securities.
Section 4.13 Execution of Documents Except as otherwise required by the
Business Trust Act or applicable law, any Regular Trustee is authorized to
execute on behalf of the Trust any
20
documents that the Regular Trustees have the power and authority to cause the
Trust to execute pursuant to Section 4.6.
Section 4.14 Responsibilities of the Grantor. In connection with the
issuance and sale of the Trust Securities, the Grantor shall have the exclusive
right and responsibility to engage in the following activities on behalf of the
Trust:
(a) To execute and file with the Commission the registration statement on
Form S-3, including any amendments thereto, pertaining to the Trust Securities;
(b) To execute and file any documents or take any action as determined
necessary by the Grantor in order to qualify or register all or part of the
Trust Securities in any jurisdiction;
(c) To execute and file an application to the New York Stock Exchange,
Inc. or any other national stock exchange or the NASDAQ Stock Market's National
Market System for listing upon notice of issuance of the Trust Securities;
(d) To execute and file with the Commission a registration statement on
Form 8-A, including any amendments thereto, relating to the registration of the
Trust Securities under Section 12(b) of the Securities Exchange Act of 1934 (the
"Exchange Act");
(e) To negotiate, execute and enter into an underwriting agreement
providing for the sale of the Trust Securities.
Section 4.15 Indemnification and Expenses of the Property Trustee and the
Delaware Trustee. To the extent the Partnership fails to do so, the General
Partner agrees to indemnify the Property Trustee and the Delaware Trustee and
their respective officers, directors, employees and agents for, and to hold each
of them harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Property Trustee or the Delaware
Trustee, as the case may be, arising out of or in connection with the acceptance
or administration of the trust or trusts hereunder, including the costs and
expenses of defending either of them against any claim or liability in
connection with the exercise or performance of any of their respective powers or
duties hereunder; the provisions of this Section 4.15 shall survive the
resignation or removal of the Delaware Trustee or the Property Trustee or the
termination of this Trust Agreement.
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ARTICLE V
FORM OF TRUST SECURITIES, EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF
TRUST SECURITIES
Section 5.1. Form and Transferability of Trust Securities.
(a) Except as otherwise required by the Clearing Agency, Trust Securities
shall be evidenced by certificates engraved, printed or lithographed or may be
produced in any other manner as is reasonably acceptable to the Regular Trustees
and in substantially the form set forth in Exhibit A annexed to this Trust
Agreement, with the appropriate insertions, modifications and omissions, as
hereinafter provided.
(b) Certificates evidencing Trust Securities shall be (i) executed by one
or more of the Regular Trustees by manual or facsimile signature and (ii) upon
order of the Regular Trustees authenticated by the Property Trustee by manual
signature of an authorized signatory thereof. No certificate evidencing one or
more Trust Securities shall be entitled to any benefit under this Trust
Agreement or be valid or obligatory for any purpose unless it shall have been
executed and, authenticated as provided in this paragraph. The Registrar shall
record on the Register each Trust Security certificate executed as provided
above and delivered as hereinafter provided.
(c) Certificates evidencing Trust Securities shall be issued in minimum
denominations of $ liquidation amount and integral multiples of $ in excess
thereof. All Trust Security certificates shall be dated the date of their
authentication.
(d) Certificates evidencing Trust Securities may be endorsed with or have
incorporated in the text thereof such legends or recitals or changes not
inconsistent with the provisions of this Trust Agreement as may be required by
the Registrar or the Property Trustee or required to comply with any applicable
law or regulation or with the rules and regulations of any securities exchange
upon which the Trust Securities may be listed or to conform with any usage with
respect thereto.
(e) Title to any Trust Security certificate that is properly endorsed or
accompanied by a properly executed instrument of transfer or endorsement shall
be transferable by delivery with the same effect as in the case of a negotiable
instrument; provided, however, that until the transfer shall be registered on
the Register as provided in Section 5.3, the Trust, the Property Trustee, the
Regular Trustees, the Registrar and the Grantor may, notwithstanding any notice
to the contrary, treat the Holder thereof at such time as the absolute owner
thereof for
22
the purpose of determining the Person entitled to distributions or to any notice
provided for in this Trust Agreement and for all other purposes.
Section 5.2. Issuance of Trust Securities.
(a) Upon receipt by the Property Trustee on behalf of the Trust of a
written order and a certificate or certificates for the Preferred Securities,
subject to the terms and conditions of this Trust Agreement, the Property
Trustee, shall authenticate and make available for delivery one or more
certificates evidencing the Trust Securities in the name of DTC's nominee, who
shall thereupon be the initial Holder of Trust Securities.
(b) If a Clearing Agency elects to discontinue its services as securities
depository with respect to the Trust Securities, the Grantor may, in its sole
discretion, appoint a successor Clearing Agency with respect to such Trust
Securities.
(c) If (x) a Clearing Agency elects to discontinue its services as
securities depository with respect to the Trust Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 5.2(b); (y) the Regular Trustees elect after consultation
with the Grantor to terminate the book-entry system through the Clearing Agency
with respect to the Trust Securities; or (z) there is a Trust Enforcement Event;
then:
(i) definitive Trust Security certificates shall be prepared by the
Regular Trustees on behalf of the Trust with respect to such Trust Securities;
and
(ii) upon notice by the Clearing Agency of its election to
discontinue its services, the Regular Trustees shall execute and deliver to the
Property Trustee for authentication such definitive certificates accompanied by
an authentication order and accompanied by registration instructions to be
delivered to Trust Security beneficial owners in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the Trust shall be
liable for any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, said instructions of
the Clearing Agency. The Definitive Trust Security Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Property Trustee, as evidenced by its
authentication thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustee may deem appropriate, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Trust Securities may be listed, or to conform to
usage.
23
Section 5.3. Registration, Transfer and Exchange of Trust Securities. The
Property Trustee shall cause a Register (the "Register") to be kept at the
office of the Registrar in which, subject to such reasonable regulations as the
Property Trustee and the Registrar may prescribe, the Registrar shall provide
for the registration of Trust Security certificates and of transfers and
exchanges of Trust Security certificates as herein provided. The Grantor hereby
appoints The Bank of New York as the Registrar. The Registrar shall also act as
transfer agent. The Grantor may remove the Registrar and, upon removal or
resignation of the Registrar, appoint a successor Registrar. Subject to the
terms and conditions of this Trust Agreement, the Registrar shall register the
transfers on the Register from time to time of Trust Security certificates upon
any surrender thereof by the Holder in person or by a duly authorized attorney,
properly endorsed or accompanied by a properly executed instrument of transfer
or endorsement, together with evidence of the payment of any transfer taxes as
may be required by law. Upon such surrender, the Property Trustee shall, upon
the order of a Regular Trustees, authenticate and make available by delivery a
new Trust Security certificate representing the same number of Preferred
Securities in accordance with Section 5.1(b) and deliver the same to or upon the
order of the Person entitled thereto.
At the option of a Holder, Trust Security certificates may be exchanged
for other authorized denominations of Trust Security certificates of a like
aggregate liquidation amount. Upon surrender of a Trust Security certificate at
the office of the Registrar or such other office as the Property Trustee may
designate for the purpose of effecting an exchange of Trust Security
certificates, subject to the terms and conditions of this Trust Agreement, the
Property Trustee shall upon the order of a Regular Trustee authenticate and make
available for delivery a new Trust Security certificate of an authorized
denomination and of a like aggregate liquidation amount as the Trust Security
certificate surrendered.
As a condition precedent to the registration of the transfer or exchange
of any Trust Security certificate, the Registrar may require (i) production of
proof satisfactory to it as to the identity and genuineness of any signature;
and (ii) compliance with such regulations, if any, as the Delaware Trustee or
the Registrar may establish not inconsistent with the provisions of this Trust
Agreement.
No service charge shall be made to a Holder of Trust Securities for any
registration of transfer or exchange of Trust Security certificates, but the
Property Trustee or the Registrar shall require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Trust Security certificates.
24
Neither the Property Trustee nor the Registrar shall be required to
register the transfer of or exchange any Trust Security certificate for a period
beginning 15 days prior to the mailing of a notice of redemption and ending at
the close of business on the date of such mailing.
Section 5.4. Lost or Stolen Trust Securities, Etc. In case any Trust
Security certificate shall be mutilated, destroyed, lost or stolen and in the
absence of notice to the Property Trustee that such Trust Security has been
acquired by a protected purchaser (as such term is used in Section 8-405(a)(1)
of the Delaware Uniform Commercial Code), the Property Trustee shall upon the
order of a Regular Trustee, authenticate and make available for delivery a Trust
Security certificate of like form and tenor in exchange and substitution for
such mutilated Trust Security certificate or in lieu of and in substitution for
such destroyed, lost or stolen Trust Security certificate, provided, however,
that the Holder thereof provides the Property Trustee with (i) evidence
satisfactory to the Property Trustee of such destruction, loss or theft of such
Trust Security certificate, of the authenticity thereof and of his ownership
thereof, (ii) reasonable indemnification satisfactory to the Property Trustee,
and (iii) payment of any expense (including fees, charges and expenses of the
Property Trustee) in connection with such execution and delivery. Any duplicate
Trust Security certificate issued pursuant to this Section 5.4 shall constitute
complete and indefeasible evidence of beneficial ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust Security
certificate shall be found at any time.
Section 5.5. Cancellation and Destruction of Surrendered Trust Securities.
All Trust Security certificates surrendered to the Property Trustee shall be
canceled by the Property Trustee and, upon receipt of written request from the
Regular Trustees, returned to the Regular Trustees.
Section 5.6. Surrender of Trust Securities and Withdrawal of Preferred
Securities. Any Person who is the beneficial owner (an "Owner") of the Trust
Securities represented by the global certificate held by a Clearing Agency as
reflected in the records of the Clearing Agency or successor Clearing Agency or,
if a participant in the Clearing Agency is not the Owner, then as reflected in
the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly), in accordance with the rules of such Clearing Agency,
may withdraw all, but not less than all, of the Preferred Securities represented
by such Trust Securities by providing a written notice and an agreement to be
bound by the terms of the Partnership Agreement to the Property Trustee at the
Corporate Trust Office or at such other office as the Property Trustee may
designate for such withdrawals, all in form satisfactory to the Regular
Trustees. Within three (3)
25
business days after such request has been properly made, (i) the Owner or the
Owner's agent shall instruct the Clearing Agency to reduce the number of Trust
Securities represented by the global certificate held by the Property Trustee on
behalf the Clearing Agency by an amount equal to the number of Trust Securities
to be so withdrawn by the Owner, (ii) the Partnership shall issue to the Owner a
certificate, in form substantially similar to that certificate attached as
Exhibit A to the Partnership Agreement, representing the number of Preferred
Securities so withdrawn (and equal to the number of Trust Securities so reduced
pursuant to subsection (i) hereof) and (iii) the Property Trustee, on behalf of
the Trust, shall notify the Partnership of the withdrawal and the Partnership
shall reduce the number of Preferred Securities represented by the global
certificate held by the Property Trustee by a like amount. If an Owner of Trust
Securities withdraws Preferred Securities in accordance with this Section 5.6,
such Owner of Trust Securities shall cease to be an Owner with respect to the
withdrawn Trust Securities.
An Owner who wishes to withdraw Preferred Securities in accordance with
this Section 5.6 will be required to provide the Grantor with a completed Form
W-9 or such other documents or information as are requested by the Grantor for
tax reporting purposes and thereafter shall be admitted to the Grantor as a
preferred limited partner of the Grantor upon such Owner's receipt of a
certificate evidencing such Preferred Securities registered in such Owner's
name.
The Partnership shall deliver the Preferred Securities represented by the
surrendered Trust Securities to the Owner in accordance with this Section 5.6,
at the request, risk and expense of the Owner and for the account of the Owner
thereof, such delivery may be made at such other place as may be designated by
such Owner.
Notwithstanding anything in this Section 5.6 to the contrary, if the
Preferred Securities represented by Trust Securities have been called for
redemption in accordance with the Partnership Agreement, no Owner of such Trust
Securities may withdraw any or all of the Preferred Securities represented by
such Trust Securities.
Section 5.7. Redeposit of Preferred Securities. Subject to the terms and
conditions of this Trust Agreement, any holder of Preferred Securities may
redeposit withdrawn Preferred Securities under this Trust Agreement by delivery
to the Partnership of a certificate or certificates for the Preferred Securities
to be deposited, properly endorsed or accompanied, if required by the
Partnership, by a properly executed instrument of transfer or endorsement in
form satisfactory to the Partnership and in compliance with the terms of the
Partnership Agreement, together
26
with all such certifications as may be required by the Partnership in its sole
discretion and in accordance with the provisions of the Partnership Agreement.
Within a reasonable period after such deposit is properly made, the Partnership
shall issue the redeposited Preferred Securities to the Property Trustee, and
the Regular Trustees shall instruct the Property Trustee by written order to
increase the number of Trust Securities represented by the global certificate
held by the Property Trustee by an amount equal to the Preferred Securities to
be deposited. The Trust Securities that represent such redeposited Preferred
Securities will not be issued in certificated form. The Partnership will accept
the deposit of such Preferred Securities only upon payment by such holder of
Preferred Securities to the Partnership of all taxes and other governmental
charges and any fees payable in connection with such deposit and the transfer of
the deposited Preferred Securities.
If required by the Partnership, Preferred Securities presented for deposit
at any time shall also be accompanied by an agreement or assignment, or other
instrument satisfactory to the Partnership, that will provide for the prompt
transfer to the Property Trustee or its nominee of any distribution or other
right that any Person in whose name the Preferred Securities are registered may
thereafter receive upon or in respect of such deposited Preferred Securities, or
in lieu thereof such agreement of indemnity or other agreement as shall be
satisfactory to the Property Trustee.
Section 5.8. Filing Proofs, Certificates and Other Information. Any Person
presenting Preferred Securities for redeposit in accordance with Section 5.7 may
be required from time to time to file such proof of residence or other
information, to execute such Preferred Security certificates and to make such
representations and warranties as the Partnership may reasonably deem necessary
or proper. The Partnership may withhold or delay the delivery of any Trust
Security or Trust Securities, the transfer, redemption or exchange of any Trust
Security or Trust Securities or the making of any distribution until such proof
or other information is filed, such certificates are executed or such
representations and warranties are made.
Section 5.9. CUSIP Numbers. The Trust, in issuing the Trust Securities,
may use "CUSIP" numbers applicable to such Trust Securities (if then generally
in use), and the Property Trustee shall use CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of such
numbers either as printed on the Trust Securities or as contained in any notice
of redemption or exchange and that reliance may be placed only on the other
identification numbers printed on the Trust Securities and any redemption shall
not be affected by any defect in or omission of such numbers.
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ARTICLE VI
DISTRIBUTIONS AND OTHER RIGHTS OF HOLDERS OF TRUST SECURITIES
Section 6.1. Distributions on Preferred Securities. Whenever the Property
Trustee shall receive any cash distribution representing a distribution on the
Preferred Securities (whether or not distributed by the Grantor on the regular
distribution date therefor) or payment under the Guarantee in respect thereof,
the Property Trustee acting directly or through any Paying Agent shall
distribute to Holders of Trust Securities as of the record date fixed pursuant
to Section 6.4, such amounts in proportion to the respective numbers of
Preferred Securities represented by the Trust Securities held by such Holders
(the "Distributions"). Distributions on the Trust Securities will be deferred if
and for so long as the Partnership defers payments to the Trust on Preferred
Securities. The Partnership will provide the Property Trustee with five days
notice of its intention to defer payment to the Trust.
Section 6.2. Redemptions of Preferred Securities. Whenever the Grantor
shall elect or is required to redeem Preferred Securities in accordance with the
Partnership Agreement, it shall (unless otherwise agreed in writing with the
Property Trustee) give the Property Trustee not less than 40 days' prior notice
thereof to redeem the Trust Securities. The Property Trustee shall, as directed
by the Grantor, mail, or cause to be mailed, first-class postage prepaid, notice
of the redemption of the Trust Securities to be redeemed in connection herewith,
not less than 30 and not more than 90 days prior to the date fixed for
redemption (the "Redemption Date") of the Trust Securities. Such notice shall be
mailed to the Holders of the Trust Securities to be redeemed, at the addresses
of such Holders as the same appear on the records of the Registrar. No defect in
the notice of redemption or in the mailing or delivery thereof or publication of
its contents shall affect the validity of the redemption proceedings. The
Grantor shall provide the Property Trustee with such notice, and each such
notice and the notice of redemption from the Property Trustee to the Holders
shall state: the Redemption Date; the redemption price at which the Trust
Securities are to be redeemed; that all outstanding Trust Securities are to be
redeemed or, in the case of a redemption of fewer than all outstanding Trust
Securities, the number of such Trust Securities to be so redeemed; the place or
places where Trust Securities to be redeemed are to be surrendered for
redemption; and specifying the CUSIP number assigned to the Trust Securities. In
case fewer than all the outstanding Trust Securities are to be redeemed, the
Trust Securities to be redeemed shall be selected by lot or pro rata (as nearly
as may be practicable without creating fractional Trust Securities) or by any
other equitable method determined by the Property Trustee.
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If, when a notice redemption is mailed, the notice of redemption shall be of no
effect unless such monies are so received on or before the Redemption Date.
The Grantor agrees that if a partial redemption of the Preferred
Securities would result in a delisting of the Trust Securities from any national
exchange on which the Trust Securities are then listed, the Grantor will redeem
the Preferred Securities only in whole.
On the date of any such redemption of Trust Securities, provided that the
Grantor (or Met-Ed pursuant to the Guarantee) shall then have deposited with
the Trust the aggregate amount payable upon redemption of the Trust Securities
to be redeemed, the Property Trustee, on behalf of the Trust, shall redeem
(using the funds so deposited with it) Trust Securities representing the same
number of Preferred Securities (in like denominations and like aggregate
liquidation amounts) redeemed by the Grantor.
Notice having been mailed by the Trustee as aforesaid, from and after the
Redemption Date (unless the Grantor shall have failed to redeem the Preferred
Securities to be redeemed by it as set forth in the Grantor's notice provided
for in this Section 6.2 and Met-Ed shall have failed to pay the redemption
price of the Preferred Securities under the Guarantee), the Trust Securities
called for redemption shall be deemed no longer to be outstanding and all rights
of the Holders of Trust Securities (except the right to receive the redemption
price in cash upon surrender of Trust Securities) shall cease and terminate.
Upon surrender in accordance with said notice of the Trust Securities endorsed
or assigned for transfer, if the Property Trustee shall so require, the Holders
of such Trust Securities shall receive for each such Trust Security an amount
equal to the redemption price for each Preferred Security, in addition to
accrued and unpaid Distributions thereon to the date fixed for redemption.
If fewer than all of the Trust Securities of any Holder are called for
redemption, the Property Trustee will deliver to the Holder of such Trust
Securities upon surrender of the certificate evidencing such Trust Securities a
new certificate evidencing the number of Trust Securities not called for
redemption.
Section 6.3. Distributions in Liquidation of Grantor. Upon and to the
extent of receipt by the Trust of any distribution (of monies or subordinated
debentures as provided in the Partnership Agreement) from the Grantor, upon the
liquidation of the Grantor or otherwise, or any payment under the Guarantee in
respect thereof, after satisfaction of creditors of the Trust as required by
applicable law, the Property Trustee shall distribute, in cash or in kind, to
the Holders of Trust Securities as of the record
29
date fixed pursuant to Section 6.4, the Trust Estate, in proportion to the
respective number of Preferred Securities which were represented by the Trust
Securities held by such Holders.
Section 6.4. Fixing of Record Date for Holders of Trust Securities. The
record date for Distributions provided for in Section 6.5 shall be the 15th day
of the month in which the Distributions date falls. Whenever any other
Distribution (other than upon any redemption) shall become payable, or whenever
the Property Trustee shall receive notice of any meeting at which holders of
Preferred Securities are entitled to vote or of which holders of Preferred
Securities are entitled to notice, the Regular Trustees shall in each such
instance fix a record date (which shall be the same date as the record date
fixed by the General Partner with respect to the Preferred Securities, of which
the Regular Trustees shall promptly inform the Property Trustee) for the
determination of the Holders of Trust Securities who shall be entitled (i) to
receive such Distribution, and (ii) to receive notice of, and to give
instructions for the exercise of voting rights at, any such meeting.
Section 6.5. Payment of Distributions. The Property Trustee shall act as
Paying Agent and designates the Corporate Trust Office as the place of payment
of the redemption price of and of Distributions in liquidation on the Trust
Securities. The aforesaid appointment and designation shall remain in effect
until changed by the Property Trustee. Payments of Distributions on the Trust
Securities shall be payable by check mailed to the addresses of the Holders
thereof as of the record date on and commencing . Payments of the redemption
price of Trust Securities shall be made upon surrender of such Trust Securities
at the office of the Paying Agent. Interest will be computed on the basis of a
360-day year of twelve 30 day months. If such payment date is not a business day
then such payment date shall be on the business day immediately preceeding such
payment date. The Grantor shall pay semiannual Distributions on, the redemption
price of, and distributions in liquidation on, the Preferred Securities directly
to the Paying Agent for distribution to the Holders of the Trust Securities in
accordance with the terms of this Trust Agreement.
Section 6.6. Special Representative and Voting Rights.
(a) If the holders of the Preferred Partner Interests (as defined in the
Partnership Agreement), acting as a single class, are entitled to appoint and
authorize a Special Representative pursuant to Section 13.02(d) of the
Partnership Agreement, upon written notice from the Partnership, the Property
Trustee shall notify the Holders of the Trust Securities of such right, request
direction of each Holder of a Trust Security as to the appointment of a Special
Representative and vote the Preferred
30
Securities represented by such Trust Security in accordance with such direction.
If the General Partner fails to convene a general meeting of the Partnership as
required in Section 13.02(d) of the Partnership Agreement, upon written notice
of the Partnership, the Property Trustee shall notify the Holders of the Trust
Securities and, if so directed by the Holders of Trust Securities representing
Preferred Securities constituting at least 10% of the aggregate stated
liquidation preference of the outstanding Preferred Partner Interests (as
defined in the Partnership Agreement), shall convene such meeting.
(b) Upon receipt of notice of any meeting at which the Holders of
Preferred Securities are entitled to vote, the Property Trustee shall, as soon
as practicable thereafter, mail to the Holders of Trust Securities a notice,
which shall be provided by the General Partner and which shall contain (i) such
information as is contained in such notice of meeting, (ii) a statement that the
Holders of Trust Securities at the close of business on a specified record date
fixed pursuant to Section 6.4 will be entitled, subject to any applicable
provision of law or of the Partnership Agreement, to instruct the Property
Trustee as to the exercise of the voting rights pertaining to the amount of
Preferred Securities represented by their respective Trust Securities, and (iii)
a brief statement as to the manner in which such instructions may be given. Upon
the written request of a Holder of a Trust Security on such record date, the
Property Trustee shall vote or cause to be voted the number of Preferred
Securities represented by such Trust Security in accordance with the
instructions set forth in such request. The Grantor hereby agrees to take all
reasonable action that may be deemed necessary by the Property Trustee in order
to enable the Property Trustee to vote such Preferred Securities or cause such
Preferred Securities to be voted. In the absence of specific instructions from
the Holder of a Trust Security, the Property Trustee will abstain from voting to
the extent of the Preferred Securities represented by such Trust Security.
Section 6.7. Changes Affecting Preferred Securities and Reclassifications,
Recapitalizations, Etc Upon any consolida- tion, amalgamation, conversion,
merger, replacement or convey- ance, transfer or lease by the Partnership of its
properties and assets as an entirety in accordance with Section 13.02(e) of the
Partnership Agreement, the Property Trustee shall, upon the instructions of the
Grantor, treat any Successor Securities or other property (including cash) that
shall be received by the Property Trustee in exchange for or upon conversion of
or in respect of the Preferred Securities as part of the Trust Estate, and Trust
Securities then outstanding shall thenceforth represent the proportionate
interests of Holders thereof in the new deposited property so received in
exchange for or upon conversion or in respect of such Preferred Securities.
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ARTICLE VII
TRUSTEES
Section 7.1 Number of Trustees. The number of Trustees initially
shall be five (5), and:
(a) At any time before the issuance of any Trust Securities, the Grantor
may, by written instrument, increase or decrease the number of Trustees; and
(b) After the issuance of any Trust Securities, the number of Trustees may
be increased or decreased by vote of the Holders of Trust Securities; provided,
however, that the number of Trustees shall in no event be less than one (1);
provided further that (1) if required by the Business Trust Act, one Trustee
shall be the Delaware Trustee; and (2) one Trustee shall be the Property Trustee
for so long as this Trust Agreement is required to qualify as an indenture under
the Trust Indenture Act, and such Property Trustee may also serve as Delaware
Trustee if it meets the applicable requirements.
Section 7.2 Delaware Trustee. If required by the Business Trust Act,
one Trustee (the "Delaware Trustee") shall be:
(a) A natural person who is a resident of the State of Delaware; or
(b) If not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law, provided that, if the Property Trustee has its principal place
of business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee may also be the Delaware Trustee (in
which case Section 4.11 shall have no application).
Section 7.3 Property Trustee; Eligibility.
(a) There shall at all times for so long as this Trust Agreement is
required to qualify as an indenture under the Trust Indenture Act, be one
Trustee which shall act as Property Trustee (the "Property Trustee") which
shall:
(i) not be an Affiliate of the Grantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any state or territory thereof or of the
District of Columbia, or a Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under such laws
to
32
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, and subject to supervision or examination by federal, state,
territorial or District of Columbia authority. If such Person publishes reports
of condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then for the purposes of
this Section 7.3(a)(ii), the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time for so long as this Trust Agreement is required to
qualify as an indenture under the Trust Indenture Act, the Property Trustee
shall cease to be eligible to so act under Section 7.3(a), the Property Trustee
shall immediately resign in the manner and with the effect set forth in Section
7.7(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
(d) The initial Property Trustee shall be: The Bank of New York, 101
Barclay Street, Floor 21 West, New York, New York 10286.
Section 7.4 Qualifications of the Regular Trustees and the Delaware
Trustee Generally. Each Regular Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Responsible Officers.
Section 7.5 Regular Trustees. The initial Regular Trustees shall be:
Except as expressly set forth in this Trust Agreement and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
Section 7.6 Delaware Trustee. The initial Delaware Trustee shall be:
The Bank of New York (Delaware), White Clay Center, Route 273, Newark,
Delaware 19711.
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Section 7.7 Appointment, Removal and Resignation of Trustees
(a) Subject to Section 7.7(b), Trustees may be appointed or removed
without cause at any time by the Grantor.
(b) (i) The Trustee that acts as Property Trustee shall not be removed
until a successor Trustee possessing the qualifications to act as Property
Trustee under Section 7.3 (a "Successor Property Trustee") has been appointed
and has accepted such appointment by written instrument executed by such
Successor Property Trustee and delivered to the removed Property Trustee, the
Regular Trustees and the Grantor;
(ii) The Trustee that acts as Delaware Trustee shall not be removed
until a successor Trustee possessing the qualifications to act as Delaware
Trustee under Sections 7.2 and 7.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument executed by
such Successor Delaware Trustee and delivered to the removed Delaware Trustee,
the Regular Trustees and the Grantor;
(iii) No removal of the Property Trustee or the Delaware Trustee
shall be effective until all of the fees, charges, and expenses incurred by such
entity have been paid.
(c) A Trustee appointed to office shall hold office until his or its
successor shall have been appointed or until his or its dissolution,
termination, bankruptcy, death, removal or resignation. Any Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing signed by the Trustee and delivered to the Grantor and the Trust,
which resignation shall take effect upon such delivery or upon such later date
as is specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and has
accepted such appointment by instrument executed by such Successor Property
Trustee and delivered to the Trust, the Grantor, the Regular Trustees and the
resigning Property Trustee; or
(B) until the assets of the Trust have been completely liquidated
and the proceeds thereof distributed to the Holders of the Trust Securities;
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been appointed
and has accepted such
34
appointment by instrument executed by such Successor Delaware Trustee and
delivered to the Trust, the Grantor, the Regular Trustees and the resigning
Delaware Trustee; and
(iii) no such resignation of the Property Trustee or the Delaware
Trustee shall be effective until all of the fees, charges, and expenses incurred
by such entity have been paid.
(d) The Grantor shall use its best efforts to promptly appoint a Successor
Delaware Trustee or Successor Property Trustee, as the case may be, if the
Delaware Trustee or the Property Trustee delivers an instrument of resignation
in accordance with this Section 7.7.
(e) If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this Section 7.7
within 30 days after delivery to the Grantor and the Trust of an instrument of
resignation, the resigning Property Trustee or Delaware Trustee, as applicable,
may petition any court of competent jurisdiction for appointment of a Successor
Property Trustee or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe, appoint a
Successor Property Trustee or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the acts
or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
Section 7.8 Vacancies among Trustees. If a Trustee ceases to hold office
for any reason and the number of Trustees is not reduced pursuant to Section
7.1, or if the number of Trustees is increased pursuant to Section 7.1, a
vacancy shall occur. A resolution certifying the existence of such vacancy by
the Regular Trustees or, if there are more than two Regular Trustees, a majority
of the Regular Trustees shall be conclusive evidence of the existence of such
vacancy. The vacancy shall be filled with a Trustee appointed in accordance with
Section 7.7.
Section 7.9 Effect of Vacancies. The death, resignation, retirement,
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee shall not operate to dissolve, terminate or
annul the Trust or terminate this Trust Agreement. Whenever a vacancy in the
number of Regular Trustees shall occur, until such vacancy is filled by the
appointment of a Regular Trustee in accordance with Section 7.8, the Regular
Trustees in office, regardless of their number, shall have all the powers
granted to the Regular Trustees and shall discharge all the duties imposed upon
the Regular Trustees by this Trust Agreement.
35
Section 7.10 Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware Trustee, as the case
may be, may be merged or converted or with which either may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Property Trustee or the Delaware Trustee, as the case may be, shall be a party,
or any Person succeeding to all or substantially all the corporate trust
business of the Property Trustee or the Delaware Trustee, as the case may be,
shall be the Successor Property Trustee or the Successor Delaware Trustee, as
the case may be, hereunder, provided such Person shall be otherwise qualified
and eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto.
Section 7.11 Status of Trust. It is intended that the Trust shall not be
an "Investment Company" under the 1940 Act.
ARTICLE VIII
DISSOLUTION AND TERMINATION
Section 8.1. Dissolution of Trust
(a) The Trust shall dissolve:
(i) upon the bankruptcy, insolvency or dissolution of the Grantor;
(ii) upon the entry of a decree of judicial dissolution of the
Grantor or the Trust; or
(iii) when all of the Trust Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been paid
to the Holders in accordance with the terms of the Trust Securities.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a), and upon completion of the winding up of the Trust in
accordance with Section 8.2, the Regular Trustees shall prepare and file a
certificate of cancellation with the Secretary of State of the State of
Delaware. This Trust Agreement will terminate upon the effective time and date
of the certificate of cancellation filed with the Secretary of State of the
State of Delaware. Upon termination of this Trust Agreement and the Trust in
accordance with the foregoing, the respective obligations and responsibilities
of the Trustees and the Grantor shall terminate.
36
Section 8.2. Winding Up. After the dissolution of the Trust and after the
satisfaction of creditors of the Trust, if any, as required by applicable law,
the remaining assets of the Trust shall be distributed in cash or in kind to the
Holders of the Trust Securities pro rata in proportion to the respective numbers
of Preferred Securities represented by the Trust Securities held by such
Holders.
ARTICLE IX
MERGER, CONSOLIDATION, ETC. OF GRANTOR OR TRUST
Section 9.1. Limitation on Permitted Merger Consolidation, Etc. of
Grantor. The Grantor agrees that it will not consolidate, amalgamate, merge with
or into, or be replaced by, or convey, transfer or lease its properties and
assets substantially in their entirety to any Person without the consent of the
Holders of [a majority] of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of the Trust Securities unless permitted by Section
13.02(e) of the Partnership Agreement and (i) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Trust Securities to be delisted by any national securities exchange or other
organization on which the Trust Securities are then listed, (ii) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
cause the Trust Securities to be downgraded by any "nationally recognized
statistical rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act of 1933, as amended, and
(iii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, Grantor has received an opinion of counsel (which
may be regular counsel to Met-Ed or an Affiliate, but not an employee thereof)
experienced in such matters to the effect that Holders of outstanding Trust
Securities will not recognize any gain or loss for Federal income tax purposes
as a result of the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease.
Section 9.2. Mergers and Consolidations of Trust
(a) The Trust may not consolidate, amalgamate, convert, merge with or
into, or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, except as described in Article VIII
and this Article IX.
(b) The Trust may, with the consent of the Grantor and without the consent
of the Holders of the Trust Securities, the
37
Delaware Trustee, the Property Trustee or the Regular Trustees consolidate,
amalgamate, merge, convert, with or into, or be replaced by a trust organized as
such under the laws of any State of the United States; provided that:
(i) if the Trust is not the survivor, such successor entity (the
"Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under the
Trust Securities; or
(B) substitutes for the Trust Securities other securities having
substantially the same terms as the Trust Securities (the "Successor Trust
Securities") so long as the Successor Trust Securities rank the same as the
Trust Securities rank with respect to Distributions, assets and payments upon
liquidation, redemption and otherwise;
(ii) the Grantor expressly acknowledges a trustee of the Successor
Entity that possesses the same powers and duties as the Property Trustee as the
Holder of the Preferred Securities;
(iii) the Trust Securities or any Successor Trust Securities are
listed, or any Successor Trust Securities will be listed upon notification of
issuance, on any national securities exchange or with another organization on
which the Trust Securities are then listed or quoted;
(iv) such merger, conversion, consolidation, amalgamation or
replacement does not cause the Trust Securities (including any Successor Trust
Securities) to be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, conversion, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the Holders of the Trust Securities (including any Successor Trust Securities)
in any material respect;
(vi) such Successor Entity has a purpose substantially identical to
that of the Trust; and
(vii) prior to such merger, conversion, consolidation, amalgamation
or replacement, the Grantor has received an opinion of counsel (which may be
regular counsel to Met-Ed or an Affiliate, but not an employee thereof) to the
Trust experienced in such matters to the effect that:
(A) such merger, conversion, consolidation, amalgamation or
replacement will not adversely affect the rights, preferences and privileges of
the Holders of the Trust Securities (including any Successor Trust Securities)
in any material
38
respect (other than with respect to any dilution of the Holders' interest in
the new entity);
(B) following such merger, conversion, consolidation, amalgamation
or replacement, neither the Trust nor the Successor Entity will be required to
register as an Investment Company under the 1940 Act;
(C) following such merger, conversion, consolidation, amalgamation
or replacement, the Trust (or the Successor Entity) will not be classified as an
association or a publicly traded partnership taxable as a corporation for United
States federal income tax purposes; and
(D) following such merger, conversion, consolidation, amalgamation
or replacement, the Partnership will not be classified as an association or a
publicly traded partnership taxable as a corporation for United States federal
income tax purposes.
(c) The Trust shall not, except with the consent of Holders of 100% in
liquidation amount of the Trust Securities, consolidate, amalgamate, convert,
merge with or into, or be replaced by any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, conversion, merger or replacement would cause the
Trust or Successor Entity to be classified as an association or a publicly
traded partnership taxable as a corporation for United States federal income tax
purposes.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability.
(a) Except as expressly set forth in this Trust Agreement and the terms of
the Trust Securities, the Grantor and the Trustees shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Trust Securities,
which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Trust
Securities any deficit upon dissolution or termination of the Trust or
otherwise.
39
(b) Notwithstanding any other provision herein, the Grantor, by entering
into this Trust Agreement, agrees that it shall be liable directly to any
creditor or claimant of or against the Trust for the entire amount of all of the
debts and obligations of the Trust (other than obligations to the Holders of
Trust Securities in their capacities as Holders) to the extent not satisfied out
of the Trust's assets as if the Grantor were the general partner of a limited
partnership formed under the Delaware Revised Uniform Limited Partnership Act.
This Section 10.1(b) will automatically terminate upon (i) the adoption of final
or temporary United States federal tax regulations which, if the Trust were not
classified as a grantor trust for United States federal income tax purposes,
would result in the classification of the Trust as a partnership for United
States federal income tax purposes without regard to its organic characteristics
and (ii) the taking of such action, if any, by the Trust or the Holders of Trust
Securities as may be necessary to achieve such classification.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of
the Trust Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
Section 10.2 Exculpation
(a) No Company Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Company Indemnified Person in good faith on behalf of the Trust
and in a manner such Company Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Company Indemnified Person by this
Trust Agreement or by law, except that a Company Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Company
Indemnified Person's gross negligence or willful misconduct with respect to such
acts or omissions.
(b) A Company Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Company Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts
40
pertinent to the existence and amount of assets from which Distributions to
Holders of Trust Securities might properly be paid.
Section 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Trust Agreement shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Trust Agreement. The
provisions of this Trust Agreement, to the extent that they restrict the duties
and liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Person; or
(ii) whenever this Trust Agreement or any other agreement
contemplated herein or therein provides that an Indemnified Person shall act in
a manner that is, or provides terms that are, fair and reasonable to the Trust
or any Holder of Trust Securities, the Indemnified Person shall resolve such
conflict of interest, take such action or provide such terms, considering in
each case the relative interest of each party (including its own interest) to
such conflict, agreement, transaction or situation and the benefits and burdens
relating to such interests, any customary or accepted industry practices, and
any applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or term
so made, taken or provided by the Indemnified Person shall not constitute a
breach of this Trust Agreement or any other agreement contemplated herein or of
any duty or obligation of the Indemnified Person at law or in equity or
otherwise.
(c) Whenever in this Trust Agreement an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors as
it desires, including its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting the Trust or any
other Person; or
41
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Trust Agreement or by
applicable law.
Section 10.4 Indemnification.
(a) (i) To the fullest extent permitted by applicable law, the Grantor
shall indemnify and hold harmless any Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by reason
of the fact that he is or was a Company Indemnified Person against expenses
(including reasonable attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Company Indemnified Person did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Grantor shall indemnify, to the fullest extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Trust to procure a judgment in its favor by reason of the fact that
he is or was a Company Indemnified Person against expenses (including reasonable
attorneys' fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Trust and except that no such indemnification shall be made in respect of
any claim, issue or matter as to which such Company Indemnified Person shall
have been adjudged to be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.
42
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the fullest extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Grantor only as
authorized in the specific case upon a determination that indemnification of the
Company Indemnified Person is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority vote of a
Quorum consisting of such Regular Trustees who were not parties to such action,
suit or proceeding, or (2) if such Quorum is not obtainable, or, even if
obtainable, if a Quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion.
(v) To the fullest extent permitted by law, expenses (including
reasonable attorneys' fees) incurred by a Company Indemnified Person in
defending a civil, criminal, administrative or investigative action, suit or
proceeding referred to in paragraphs (i) and (ii) of this Section 10.4(a) shall
be paid by the Grantor in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the Grantor as authorized in this
Section 10.4(a). Notwithstanding the foregoing, no advance shall be made by the
Grantor if a determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a Quorum of disinterested Regular Trustees, or
(ii) if such a Quorum is not obtainable, or, even if obtainable, if a Quorum of
disinterested Regular Trustees so directs, by independent legal counsel in a
written opinion that, based upon the facts known to the Regular Trustees at the
time such determination is made, such Company Indemnified Person acted in bad
faith or in a manner that such Person did not believe to be in or not opposed to
the best interests of the Trust, or, with respect to any criminal proceeding,
that such Company Indemnified Person believed or had reasonable cause to believe
his conduct was unlawful. In no event shall any advance be made in instances
where the Regular Trustees, independent legal counsel or Holder of the Trust
Securities reasonably determine that such Person deliberately breached his duty
to the Trust.
43
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
shareholders or disinterested directors of the Grantor or Holders of the Trust
Securities or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to be provided by a
contract between the Grantor and each Company Indemnified Person who serves in
such capacity at any time while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect any rights or obligations
then existing.
(vii) The Grantor or the Trust may purchase and maintain insurance
on behalf of any Person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Grantor would have the
power to indemnify him against such liability under the provisions of this
Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger or conversion, so that any Person who is or was a
director, trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same position
under the provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent entity if its
separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a Person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(b) The Grantor shall indemnify, to the fullest extent permitted by law,
the (i) Property Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the
Property Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Property Trustee and the Delaware Trustee (each of the
Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each
44
Fiduciary Indemnified Person harmless against, any loss, damage, claim,
liability or expense including taxes (other than taxes based on the income of
such Fiduciary Indemnified Trustee) incurred without negligence or bad faith on
the part of the Fiduciary Indemnified Person arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees and expenses)
of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
Section 10.5 Outside Businesses. Any Covered Person, the Grantor, the
Delaware Trustee, the Regular Trustees and the Property Trustee (subject to
Section 7.3(c)) may engage in or possess an interest in other business ventures
of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of Trust
Securities shall have no rights by virtue of this Trust Agreement in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Grantor, the Delaware
Trustee, the Regular Trustees nor the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and any Covered Person, the Grantor, the Regular Trustees, the
Delaware Trustee and the Property Trustee shall have the right to take for its
own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment or other opportunity. Any Covered Person,
the Delaware Trustee, the Regular Trustees and the Property Trustee may engage
or be interested in any financial or other transaction with the Grantor or any
Affiliate of the Grantor, or may act as depository for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Grantor or its Affiliates.
ARTICLE XI
AMENDMENTS AND MEETINGS
Section 11.1 Amendments
(a) Except as otherwise provided in this Trust Agreement or by any
applicable terms of the Trust Securities, this Trust Agreement may only be
amended by a written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees, a majority of the Regular Trustees);
45
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property Trustee;
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate from the Grantor that
such amendment is permitted by, and conforms to, the terms of this Trust
Agreement (including the terms of the Trust Securities);
(ii) unless, in the case of any proposed amendment that affects the
rights, powers, duties, obligations or immunities of the Property Trustee, the
Regular Trustees or the Delaware Trustee, the Property Trustee, the Regular
Trustees or the Delaware Trustee, as the case may be, shall have first received
an opinion of counsel (who may be counsel to the Grantor or the Trust) that such
amendment is permitted by, and conforms to, the terms of this Trust Agreement
(including the terms of the Trust Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to not be classified for purposes of United
States federal income taxation as a grantor trust;
(B) cause the Partnership to be classified for purposes of United
States federal income tax as an association or a publicly traded partnership
taxable as a corporation;
(C) reduce or otherwise adversely affect the powers of the Property
Trustee in contravention of the Trust Indenture Act; or
(D) cause the Trust to be deemed to be an Investment Company
required to be registered under the 1940 Act.
(c) In the event the consent of the Property Trustee, as the Holder of the
Preferred Securities, is required under the Partnership Agreement with respect
to any amendment, modification or termination of the Partnership Agreement or
the Preferred Securities, the Property Trustee shall request the direction of
the Holders of the Trust Securities with respect to such amendment, modification
or termination and shall vote with
46
respect to such amendment, modification or termination as directed by a Majority
in liquidation amount of the Trust Securities voting together as a single class;
provided, however, that where a consent under the Partnership Agreement would
require the consent of a Super Majority of the Holders of Preferred Securities,
the Property Trustee may only give such consent at the direction of the Holders
of at least the proportion in liquidation amount of the Trust Securities which
the relevant Super Majority represents of the aggregate liquidation amount of
the Preferred Securities outstanding; provided, further, that the Property
Trustee shall not be obligated to take any action in accordance with the
directions of the Holders of the Trust Securities under this Section 11.1(c)
unless the Property Trustee has obtained an opinion of independent tax counsel
to the effect that such action is not inconsistent with the Trust being
classified as a grantor trust for United States federal income tax purposes;
(d) At such time after the Trust has issued any Trust Securities that
remain outstanding, any amendment that would (i) materially adversely affect the
powers, preferences or special rights of the Trust Securities or (ii) provide
for the dissolution, winding-up or termination of the Trust other than pursuant
to the terms of this Trust Agreement, may be effected only with the approval of
the Holders of at least a Majority in liquidation amount of the Trust
Securities;
(e) Section 10.1(c) and this Section 11.1 shall not be amended without the
consent of all of the Holders of the Trust Securities;
(f) Notwithstanding Section 11.1(c), this Trust Agreement may be amended
without the consent of the Holders of the Trust Securities by the Grantor or the
General Partner and the Property Trustee:
(i) to cure any ambiguity or correct any mistake;
(ii) to correct or supplement any provision in this Trust Agreement
that may be defective or inconsistent with any other provision of this Trust
Agreement or to make any other provisions with respect to matters or questions
arising under this Trust Agreement provided that any such action shall not
materially adversely affect the interests of the Holders;
(iii) to evidence the succession of another Person to the Grantor or
the General Partner and the assumption by any such successor of the covenants of
the Grantor or the General Partner herein contained; or
47
(iv) to add to the covenants of the Grantor or the General Partner
for the benefit of the Holders, or to surrender any right or power herein
conferred upon the Grantor or the General Partner; or
(v) to conform to any change in the 1940 Act or written change in
interpretation or application of the rules and regulations promulgated
thereunder by any legislative body, court, government agency or regulatory
authority;
(vi) to conform to any change in the Trust Indenture Act or written
change in interpretation or application of the rules and regulations promulgated
thereunder by any legislative body, court, government agency or regulatory
authority; and
(vii) to modify, eliminate and add to any provision of this Trust
Agreement to such extent as may be necessary or desirable; provided that such
amendments do not have a material adverse effect on the rights, preferences or
privileges of the Holders of the Trust Securities.
Section 11.2 Meetings of the Holders of Trust Securities; Action by
Written Consent.
(a) Meetings of the Holders of Trust Securities may be called at any time
by the Regular Trustees (or as provided in the terms of this Trust Agreement) to
consider and act on any matter on which Holders of Trust Securities are entitled
to act under the terms of this Trust Agreement, the Partnership Agreement, the
rules of any stock exchange on which the Trust Securities are listed or admitted
for trading, the Business Trust Act or other applicable law. The Regular
Trustees shall call a meeting of the Holders of Trust Securities if directed to
do so by the Holders of at least 10% in liquidation amount of the Trust
Securities. Such direction shall be given by delivering to the Regular Trustees
one or more calls in writing stating that the signing Holders of Trust
Securities wish to call a meeting and indicating the general or specific purpose
for which the meeting is to be called. Any Holders of Trust Securities calling a
meeting shall specify in writing the certificates held by the Holders of Trust
Securities exercising the right to call a meeting and only those Trust
Securities specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
(b) Except to the extent otherwise provided in the Trust Agreement, the
following provisions shall apply to meetings of Holders of Trust Securities:
(i) notice of any such meeting shall be given to all the Holders of
Trust Securities having a right to vote thereat at
48
least 7 days and not more than 60 days before the date of such meeting. Any
action that may be taken at a meeting of the Holders of Trust Securities may be
taken without a meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Trust Securities owning not less than the
minimum amount of Trust Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of Trust
Securities having a right to vote thereon were present and voting. Prompt notice
of the taking of action without a meeting shall be given to the Holders of Trust
Securities entitled to vote who have not consented in writing. The Regular
Trustees may specify that any written ballot submitted to the Holder for the
purpose of taking any action without a meeting shall be returned to the Trust
within the time specified by the Regular Trustees;
(ii) each Holder of a Trust Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Trust Securities is entitled
to participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Holder of Trust Securities executing
it. Except as otherwise provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the General Corporation Law
of the State of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Holders of the
Trust Securities were shareholders of a Delaware corporation;
(iii) each meeting of the Holders of the Trust Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Trust Agreement, the Trust
Indenture Act or the listing rules of any stock exchange on which the Trust
Securities are then listed for trading, otherwise provide, the Regular Trustees,
in their sole discretion, shall establish all other provisions relating to
meetings of Holders of Trust Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any Holders of
Trust Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements, voting in
person or by proxy or any other matter with respect to the exercise of any such
right to vote.
49
ARTICLE XII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
Section 12.1 Representations and Warranties of Property Trustee. The
Trustee that acts as initial Property Trustee represents and warrants to the
Trust and to the Grantor at the date of this Trust Agreement, and each Successor
Property Trustee represents and warrants to the Trust and the Grantor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a banking corporation with trust powers, duly
organized, validly existing and in good standing under the laws of the state of
its domicile or under federal law, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Trust Agreement;
(b) The execution, delivery and performance by the Property Trustee of
this Trust Agreement has been duly authorized by all necessary corporate action
on the part of the Property Trustee. This Trust Agreement has been duly executed
and delivered by the Property Trustee;
(c) The execution, delivery and performance of this Trust Agreement by the
Property Trustee do not conflict with or constitute a breach of the Articles of
Incorporation or Bylaws of the Property Trustee; and
Section 12.2 Representations and Warranties of Delaware Trustee. The
Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Grantor at the date of this Trust Agreement, and each Successor
Delaware Trustee represents and warrants to the Trust and the Grantor at the
time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with power and authority to execute and deliver, and to carry out and perform
its obligations under the terms of, this Trust Agreement;
(b) The Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust of the Trust and this Trust Agreement; and
(c) The Delaware Trustee is an entity which has its principal place of
business in the State of Delaware.
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ARTICLE XIII
MISCELLANEOUS
Section 13.1. All notices provided for in this Trust Agreement shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of):
-----------------------
-----------------------
-----------------------
-----------------------
-----------------------
(b) If given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, DE 19711
Attention: Corporate Trust Trustee Department
(c) If given to the Property Trustee, at the mailing address set forth
below (or such other address as the Property Trustee may give notice of):
The Bank of New York
101 Barclay Street, 21st Floor
New York, NY 10286
Attention: Corporate Trust Administration
Fax: (212) 815-5915
(d) if given to any other Holder, at the address set forth on the books
and records of the Trust.
(e) if given to the Grantor, at the address set forth below (or such other
address as the Grantor may give notice of):
-----------------------
-----------------------
-----------------------
-----------------------
-----------------------
51
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
Section 13.2 Governing Law. This Trust Agreement and the rights of the
parties hereunder shall be governed by and construed in accordance with the
internal laws of the State of Delaware and all rights and remedies shall be
governed by such laws without regard to principles of conflict of laws.
Section 13.3 Intention of the Parties. It is the intention of the parties
hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Trust Agreement shall be
interpreted to further this intention of the parties.
Section 13.4 Headings. Headings contained in this Trust Agreement are
inserted for convenience of reference only and do not affect the interpretation
of this Trust Agreement or any provision hereof.
Section 13.5 Successors and Assigns. Whenever in this Trust Agreement any
of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Trust Agreement by the Grantor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether so expressed.
Section 13.6 Partial Enforceability. If any provision of this Trust
Agreement, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Trust Agreement, or the application
of such provision to Persons or circumstances other than those to which it is
held invalid, shall not be affected thereby.
Section 13.7 Counterparts. This Trust Agreement may contain more than one
counterpart of the signature page and this Trust Agreement may be executed by
the affixing of the signature of each of the Trustees and a duly authorized
officer of the Grantor to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
Section 13.8 Agreement to be Bound. The acceptance of a Trust
Security or any interest therein by or on behalf of a
52
Holder of Trust Securities or a beneficial owner, without signature or further
manifestation of consent, shall constitute the unconditional acceptance by such
Holder or owner of all the terms and provisions of this Trust Agreement.
IN WITNESS WHEREOF, each of the undersigned has caused these presents to
be executed as of the day and year first above written.
--------------------------------
, Regular Trustee
--------------------------------
, Regular Trustee
--------------------------------
, Regular Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:---------------------------
- ------------------------------- Name:
Title:
THE BANK OF NEW YORK, as Property
Trustee
By:---------------------------
Name:
Title:
MET-ED CAPITAL II, L.P.
as Grantor
By: Met-Ed Preferred Capital II, Inc.
its General Partner
By:---------------------------
Name:
Title:
Accepted and Agreed (with respect
to Section 4.15 only)
MET-ED PREFERRED CAPITAL II, INC.
By:----------------------------
Name:
Title:
53
THIS TRUST SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITORY") OR A NOMINEE OF THE DEPOSITORY. THIS
TRUST SECURITY IS EXCHANGEABLE FOR TRUST SECURITIES REGISTERED IN THE NAME OF
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT AND NO TRANSFER OF THIS TRUST
SECURITY (OTHER THAN A TRANSFER OF THIS TRUST SECURITY AS A WHOLE 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) MA BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.
UNLESS THIS TRUST SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK) TO MET-ED CAPITAL
TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
TRUST SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. Trust Securities
---------- ----------
(liquidation amount $ per
------
Trust Security)
Cusip #
-------------
EXHIBIT A
TRUST SECURITIES
OF MET-ED CAPITAL TRUST,
a Delaware Business Trust,
each Representing a Cumulative Preferred Security of
Met-Ed Capital II, L.P. (a Delaware limited partnership)
is the registered owner of Trust Securities
----------------- --------------
("Trust Securities"), each representing a cumulative preferred limited partner
interest (the "Preferred Securities") of Met-Ed Capital II, L.P., a Delaware
limited partnership (the "Grantor"), deposited in trust by the Grantor with the
Property Trustee pursuant to an Amended and Restated Trust Agreement of Met-Ed
Capital Trust dated as of , 1998 (as amended or supplemented from time to time,
the "Trust Agreement") among the Grantor, The Bank of New York (Delaware), not
in its individual capacity, but solely as Delaware Trustee (the "Delaware
Trustee"), The Bank of New York, not in its individual capacity, but solely as
Property Trustee (the "Property Trustee"), the Regular Trustees (collectively,
the "Trustees") and the Holders (as defined in the Trust Agreement). Subject to
the terms of the Trust Agreement, the registered Holder hereof is entitled to a
full interest in the same number of Preferred Securities held by the Property
Trustee under the Trust Agreement, as are represented by the Trust Securities,
including the distribution, voting, liquidation and other rights of the
Preferred Securities specified in the Amended and Restated Limited Partnership
Agreement of the Grantor, as amended or supplemented from time to time, a copy
of which is on file at the Corporate Trust Office.
1. The Trust Agreement. The Trust Securities are issued upon the terms and
conditions set forth in the Trust Agreement. The Trust Agreement (a copy of
which is on file at the Corporate Trust Office of the Property Trustee) sets
forth the rights of Holders of Trust Securities and the rights and duties of the
Trustees and the Grantor. The statements made herein are summaries of certain
provisions of the Trust Agreement and are subject to the detailed provisions
thereof, to which reference is hereby made. In the event of any conflict or
discrepancy between the provisions hereof and the provisions of the Trust
Agreement, the provisions of the Trust Agreement will govern. Unless otherwise
expressly herein provided, all defined terms used herein shall have the meanings
ascribed thereto in the Trust Agreement.
2. Enforcement of Rights; Withdrawal of Preferred Securities. To the
fullest extent permitted by law, without the need for any other action of any
Person, including the Trustees and any other Holder, each Holder shall be
entitled to enforce in the name of the Trust the Trust's rights under the
Preferred Securities represented by the Trust Securities held by such Holder and
any recovery on such enforcement action shall belong solely to such Holder who
brought the action, not to the Trust, the Trustees or any other Holder
individually or to Holders as a group. Any beneficial owner of Trust Securities
may withdraw all, but not less than all, of the Preferred Securities represented
by such Trust Securities by providing a written notice and an agreement to be
bound by the terms of the Partnership Agreement to the Property Trustee at the
Corporate Trust Office, with evidence of beneficial ownership in form
satisfactory to the Property Trustee; provided, however, that the Grantor shall
not issue any fractional number of Preferred Securities.
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3. Distributions on Preferred Securities. Whenever and to the extent the
Property Trustee shall receive any cash distribution representing a distribution
on the Preferred Securities (whether or not distributed by the Grantor on the
regular distribution date therefor) or payment by Metropoltian Edison Company
("Met-Ed") under the Payment and Guarantee Agreement dated as of , 1998 (as
amended and supplemented from time to time, the "Guarantee") in respect thereof,
the Property Trustee acting directly or through any Paying Agent shall
distribute to Holders of Trust Securities as of the record date therefor, such
amounts in proportion to the respective numbers of Preferred Securities
represented by the Trust Securities held by such Holders.
4. Redemptions of Preferred Securities. Whenever the Grantor shall elect
or is required to redeem Preferred Securities in accordance with the Partnership
Agreement, it shall (unless otherwise agreed in writing with the Property
Trustee) give the Property Trustee not less than 40 days' prior notice thereof
to redeem the Trust Securities. The Property Trustee shall, as directed by the
Grantor, mail, with first-class postage prepaid, notice of the redemption of the
Trust Securities to be redeemed, not less than 30 and not more than 90 days
prior to the date fixed for redemption of such Trust Securities. Such notice
shall be mailed to the Holders of the Trust Securities, at the addresses of such
Holders as the same appear on the records of the Trust. No defect in the notice
of redemption or in the mailing or delivery thereof or publication of its
contents shall affect the validity of the redemption proceedings. In case fewer
than all the outstanding Trust Securities are to be redeemed, the Trust
Securities to be redeemed shall be selected by lot or pro rata (as nearly as may
be practicable without creating fractional shares) or by any other equitable
method determined by the Grantor. On the date of any such redemption of such
Trust Securities, provided that the Grantor (or Met-Ed pursuant to the
Guarantee) shall then have deposited with the Trust the aggregate amount payable
upon redemption of the Trust Securities to be redeemed, the Property Trustee, on
behalf of the Trust, shall redeem (using the funds so deposited with it) Trust
Securities representing the same number of Preferred Securities in like
denominations and like liquidation amount to be redeemed by the Grantor.
5. Distributions in Liquidation. Upon receipt by the Property Trustee of
any distribution from the Grantor, or otherwise upon the liquidation of the
Grantor, or any payment under the Guarantee in respect thereof, after
satisfaction of creditors of the Trust required by applicable law, the Property
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Trustee shall distribute to Holders of Trust Securities as of the record date
therefor, such amounts in proportion to the respective number of Preferred
Securities which were represented by the Trust Securities held by such Holders.
6. Fixing of Record Date for Holders of Trust Securities. The record date
for the Distributions provided for in the Trust Agreement shall be on the 15th
day of the month in which the Distribution date falls. Whenever any other
distribution (other than upon any redemption) shall become payable, or whenever
the Property Trustee shall receive notice of any meeting at which holders of
Preferred Securities are entitled to vote or of which holders of Preferred
Securities are entitled to notice, the Property Trustee shall in each such
instance fix a record date (which shall be the same date as the record date
fixed by the General Partner with respect to the Preferred Securities) for the
determination of the Holders of Trust Securities who shall be entitled (i) to
receive such distribution or (ii) to receive notice of, and to give instructions
for the exercise of voting rights at, any such meeting.
7. Payment of Distributions. Payments of Distributions on the Trust
Securities shall be payable by check mailed to the addresses of the Holders
thereof on the record date and and commencing . Payments of the redemption price
of Trust Securities and distributions in liquidation shall be made against
surrender of such Trust Securities at the office of The Bank of New York, as the
Paying Agent. Interest will be computed on the basis of a 360-day year of twelve
30 day months. If such payment date is not a business day then such payment date
shall be on the business day immediately preceeding such payment date.
8. Special Representative; Voting Rights. (a) If the holders of the
Preferred Partner Interests (as defined in the Partnership Agreement), acting as
a single class, are entitled to appoint and authorize a Special Representative
pursuant to Section 13.02(d) of the Partnership Agreement, upon written notice,
the Property Trustee shall notify the Holders of the Trust Securities of such
right, request direction of each Holder of a Trust Security and vote the
Preferred Securities represented by such Trust Security in accordance with such
direction. If the General Partner fails to convene a general meeting of the
Partnership as required in Section 13.02(d) of the Partnership Agreement, upon
written notice, the Property Trustee shall notify the Holders of the Trust
Securities and, if so directed by the Holders of Trust Securities representing
Preferred Securities
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constituting at least 10% of the aggregate stated liquidation preference of the
outstanding Preferred Partner Interests (as defined in the Partnership
Agreement), shall convene such meeting.
(b) Upon receipt of notice by the Regular Trustee of any meeting at which
the holders of Preferred Securities are entitled to vote, the Property Trustee
shall, as soon as practicable thereafter, mail to the Holders of Trust
Securities a notice, which shall be provided by the Grantor and which shall
contain (i) such information as is contained in such notice of meeting, (ii) a
statement that the Holders of Trust Securities at the close of business on a
specified record date therefor will be entitled, subject to any applicable
provision of law or of the Partnership Agreement, to instruct the Property
Trustee as to the exercise of the voting rights pertaining to the amount of
Preferred Securities represented by their respective Trust Securities, and (iii)
a brief statement as to the manner in which such instructions may be given. Upon
the written request of a Holder of a Trust Security on such record date, the
Property Trustee shall vote or cause to be voted the number of Preferred
Securities represented by the Trust Securities in accordance with the
instructions set forth in such request. In the absence of specific instructions
from the Holder of a Trust Security, the Property Trustee will abstain from
voting to the extent of the Preferred Securities represented by such Trust
Security.
9. Changes Affecting Preferred Securities and Reclassifications,
Recapitalizations, Etc. Upon any consolidation, amalgamation, merger,
replacement or conveyance, transfer or lease by the Grantor of its properties
and assets substantially in their entirety in accordance with Section 13.02(e)
of the Partnership Agreement, the Property Trustee shall, upon the instructions
of the Grantor, treat any Successor Securities or other property that shall be
received by the Property Trustee in exchange for or upon conversion of or in
respect of the Preferred Securities as part of the Trust Estate, and Trust
Securities then outstanding shall thenceforth represent the proportionate
interests of Holders thereof in the new deposited property so received in
exchange for or upon conversion or in respect of such Preferred Securities.
10. Transfer and Exchange of Trust Securities. Subject to the terms and
conditions of the Trust Agreement, the Registrar shall register the transfer on
the Register from time to time of Trust Security certificates upon any surrender
thereof by the Holder in person or by a duly authorized attorney, properly
endorsed or accompanied by a properly executed instrument of
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transfer or endorsement, together with evidence of the payment of any transfer
taxes as may be required by law. Upon such surrender, a Regular Trustee shall
execute a new Trust Security representing the same aggregate number of the Trust
Securities surrendered in accordance with the Trust Agreement and make available
for delivery the same to or upon the order of the Person entitled thereto.
Upon surrender of a Trust Security at the Corporate Trust Office or such
other office as the Property Trustee may designate for the purpose of effecting
an exchange of Trust Security certificates, subject to the terms and conditions
of the Trust Agreement, a Regular Trustee execute and the Property Trustee shall
authenticate and make available for delivery a new Trust Security certificate
representing the same number of Preferred Securities as the Trust Security
certificate surrendered.
As a condition precedent to the registration of a transfer or exchange of
any Trust Security certificate, the Registrar, may require (i) the production of
proof satisfactory to it as to the identity and genuineness of any signature;
and (ii) compliance with such regulations, if any, as the Property Trustee or
the Registrar may establish not inconsistent with the provisions of the Trust
Agreement.
Neither the Property Trustee nor the Registrar shall be required (a) to
register the transfer or exchange of any Trust Security certificate for a period
beginning at the opening of business 15 days prior to the mailing of a notice of
redemption for the Trust Securities and ending at the close of business on the
date of such mailing or (b) to transfer or exchange Trust Securities called or
being called for redemption in whole or in part.
11. Title to Trust Securities. It is a condition of the Trust Securities,
and every successive Holder hereof by accepting or holding the same consents and
agrees, that title to this Trust Security certificate, when properly endorsed or
accompanied by a properly executed instrument of transfer or endorsement, is
transferable by delivery with the same effect as in the case of a negotiable
instrument; provided, however, that until the transfer of this Trust Security
certificate shall be registered on the Register, the Trust, the Property
Trustee, the Regular Trustees, the Registrar and the Grantor may,
notwithstanding any notice to the contrary, treat the Holder hereof at such time
as the absolute owner hereof for the purpose of determining the Person entitled
to distributions or to any notice provided for in the Trust Agreement and for
all other purposes.
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12. Reports, Inspection of Transfer Books. The Property Trustee shall make
available for inspection by Holders of Trust Securities at the Corporate Trust
Office and at such other places as it may from time to time deem advisable
during normal business hours for any purpose reasonably related to such Holders
interest in the Trust any reports and communications received by the Property
Trustee as the record holder of Preferred Securities. The Registrar shall keep
books at the Corporate Trust Office for the registration of transfer of Trust
Securities, which books at all reasonable times will be open for inspection by
the Holders of Trust Securities as and to the extent provided by applicable law
and for any purpose reasonably related to the Holders' interest in the Trust.
13. Supplemental Trust Agreement. The Grantor or the General Partner may,
and the Property Trustee shall, at any time and from time to time, without the
consent of the Holders, enter into one or more agreements supplemental hereto,
in form satisfactory to the Property Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Grantor or the General
Partner and the assumption by any such successor of the covenants of the Grantor
or the General Partner herein contained; (b) to add to the covenants of the
Grantor or the General Partner for the benefit of the Holders, or to surrender
any right or power herein conferred upon the Grantor or the General Partner;
(c)(i) to correct or supplement any provision herein which may be defective or
inconsistent with any other provision herein or (ii) to make any other
provisions with respect to matters or questions arising under this Trust
Agreement, provided that any such action taken under subsection (ii) hereof
shall not materially adversely affect the interests of the Holders; or (d) to
cure any ambiguity or correct any mistake. Any other amendment or agreement
supplemental hereto must be in writing and approved by Holders of the percentage
of the then outstanding Trust Securities required by the Trust Agreement.
14. Governing Law. The Trust Agreement and this Trust Security and all
rights thereunder and hereunder and provisions thereof and hereof shall be
governed by, and construed in accordance with, the law of the State of Delaware
without giving effect to principles of conflict of laws.
15. Trust Security Non-Assessable and Fully Paid. Holders of Trust
Securities shall not be personally liable for obligations of the Trust, the
interest in the Trust represented by the Trust Securities shall be
non-assessable for any losses or expenses of the Trust or for any reason
whatsoever and the Trust
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Securities upon issuance in accordance with the Trust Agreement are and shall be
deemed fully paid.
16. Liability of Holders of Trust Securities. Holders of Trust Securities
shall be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
17. No Preemptive Rights. No Holder shall be entitled as a matter of right
to subscribe for or purchase, or have any preemptive or other similar right with
respect to, any part of any new or additional interest in the Trust, whether now
or hereafter authorized and whether issued for cash or other consideration or by
way of distribution.
This Trust Security certificate shall not be entitled to any benefits
under the Trust Agreement or be valid or obligatory for any purpose unless this
Trust Security certificate shall have been executed manually.
THE PROPERTY TRUSTEE IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY PREFERRED
SECURITIES. THE PROPERTY TRUSTEE ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS
OF THE FOREGOING DESCRIPTION WHICH CAN BE TAKEN AS A STATEMENT OF THE GRANTOR
SUMMARIZING CERTAIN PROVISIONS OF THE TRUST AGREEMENT. THE PROPERTY TRUSTEE
MAKES NO WARRANTIES OR REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR
SUFFICIENCY OF PREFERRED SECURITIES OR OF TRUST SECURITIES; AS TO THE VALIDITY
OR SUFFICIENCY OF THE TRUST AGREEMENT; AS TO THE VALUE OF TRUST SECURITIES OR AS
TO ANY RIGHT, TITLE OR INTEREST OF THE HOLDERS OF TRUST SECURITIES IN AND TO
TRUST SECURITIES.
Dated: , 1998
--------------
MET-ED CAPITAL TRUST
By:
-----------------------------
Name:
Title: Regular Trustee
Authenticated:
This is one of the Securities referred
to in the within mentioned Trust Agreement
The Bank of New York,
as Property Trustee
By:
-------------------------
Authorized Signatory
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[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
unto the within Trust Security Certificate and all rights and interests
represented by the Trust Securities evidenced thereby, and hereby irrevocably
constitutes and appoints attorney, to transfer the same on the books of the
within-named Property Trustee, with full power of substitution in the premises.
Dated: Signature:
----------------- ----------------------
NOTE: The signature to this assignment
must correspond with the name as written
upon the face of the Trust Security in
every particular, without alteration or
enlargement or any change whatever.
Signature Guarantee:
- -----------------------
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Notice of Withdrawal
To: Bank of New York
101Barclay Street
21st Floor
New York, New York 10286
Attn: Corporate Trust Administration
Re: Met-Ed Capital Trust - Cusip #
, ("Holder"), DTC participant number , requests the
------------------- ----
withdrawal of Shares with liquidation value of $ of the Preferred Securities
represented by such Trust Securities that are presently owned by the Holder and
held in global form by the Bank of New York as custodian for the Depository
Trust Company. In accordance with the terms of Section 5.6 of the Trust
Agreement governing said Preferred Securities.
By:
-------------------------------------
, Holder
Signature Guarantee [Signature
must be guaranteed by an eligible
guarantor institution or participant in a
signature medallion guarantee program]