TRUST AGREEMENT
This TRUST AGREEMENT of PECO Energy Capital Trust II (the
"Trust"), dated as of May 20, 1997, between PECO Energy Capital, L.P., a
Delaware limited partnership (the "Depositor"), First Union Trust Company,
National Association, a national association, not in its individual capacity but
solely in its capacity as trustee of the Trust (the "Trustee"). The Depositor
and the Trustee hereby agree as follows:
1. The trust created hereby shall be known as "PECO Energy
Capital Trust II," for which the Trustee, or the Depositor to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets
over to the Trustee the sum of $10. The Trustee hereby acknowledges receipt of
such amount in trust from the Depositor, which amount shall constitute the
initial trust estate. The Trustee hereby declares that it will hold the trust
estate in trust for the Depositor. It is the intention of the parties hereto
that the Trust created hereby constitutes a business trust under Chapter 38 of
Title 12 of the Delaware Code, 12 Del. C. Section 3801 et seq. (the "Business
Trust Act"), and that this document constitutes the governing instrument of the
Trust. The Trustee is hereby authorized and directed to execute and file a
certificate of trust with the Delaware Secretary of State in accordance with the
provisions of the Business Trust Act.
3. The Depositor and the Trustee will enter into an Amended
and Restated Trust Agreement, in form and substance satisfactory to each such
party and substantially in the form included as an exhibit to the 1933 Act
Registration Statement referred to below, to provide for, among other things,
the issuance of the Receipts of the Trust referred to therein. Prior to the
execution and delivery of such Amended and Restated Trust Agreement, the Trustee
shall not have any duty or obligation hereunder or with respect to the trust
estate, except as otherwise required by applicable law, and the Depositor shall
take any action as may be necessary to obtain prior to such execution and
delivery of any licenses, consents or approval as required by applicable law or
otherwise.
4. The Depositor is hereby authorized and directed, as the
sponsor of the Trust, (i) to file with the Securities and Exchange Commission
(the "Commission") and execute, in each case on behalf of the Trust, (a) the
Registration Statement on Form S-3 (the "1933 Act Registration Statement"),
including any pre-effective or post-effective amendments to such 1933 Act
Registration Statement (including the prospectus and the exhibits contained
therein), relating to the registration under the Securities Act of 1933, as
amended, of the trust receipts of the Trust and certain other securities and (b)
a Registration
Statement on Form 8-A (the "1934 Act Registration Statement") (including all
pre-effective and post-effective amendments thereto) relating to the
registration of the trust receipts of the Trust under the Securities Exchange
Act of 1934, as amended; (ii) to file with the New York Stock Exchange or
Philadelphia Stock Exchange (each an "Exchange") and execute on behalf of the
Trust one or more listing applications and all other applications, statements,
certificates, agreements and other instruments as shall be necessary or
desirable to cause the trust receipts of the Trust to be listed on any of the
Exchanges; (iii) to file and execute on behalf of the Trust such applications,
reports, surety bonds, irrevocable consents, appointments of attorney for
service of process and other papers and documents as shall be necessary or
desirable to register the trust receipts of the Trust under the securities or
"Blue Sky" laws of such jurisdictions as the Depositor, on behalf of the Trust,
may deem necessary or desirable and (iv) to execute on behalf of the Trust that
certain Underwriting Agreement relating to the trust receipts of the Trust,
among PECO Energy Company, a Pennsylvania corporation, the Depositor and the
several Underwriters named therein, substantially in the form included as an
exhibit to the 1933 Act Registration Statement. In the event that any filing
referred to in clauses (i), (ii) and (iii) above is required by the rules and
regulations of the Commission, the Exchanges or state securities or "Blue Sky"
laws, to be executed on behalf of the Trust by the Trustee, then the Trustee,
not in its individual capacity, but solely in its capacity as trustee of the
Trust, is hereby authorized and directed to join in any such filing and to
execute on behalf of the Trust any and all of the foregoing. In connection with
all of the foregoing, the Depositor hereby constitutes and appoints J. Barry
Mitchell as its true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the Depositor or in the Depositor's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to the 1933 Act Registration Statement and
the 1934 Act Registration Statement and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as the Depositor
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his respective substitute or substitutes, shall
do or cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more
counterparts.
6. The number of trustees of the Trust initially shall be one
(1) and thereafter the number of trustees of the Trust shall be such number as
shall be fixed from time to time by a written instrument signed by the Depositor
which may increase
2
or decrease the number of trustees; provided, however, that to the extent
required by the Business Trust Act, one trustee shall either be a natural person
who is a resident of the State of Delaware or, 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 Delaware law; and provided,
further, that the addition of any co-trustee shall be approved by the Trustee,
which approval shall not be unreasonably withheld. Subject to the foregoing, the
Depositor is entitled to appoint or remove without cause the Trustee or any
co-trustee at any time. The Trustee may resign upon thirty (30) days prior
notice to the Depositor.
7. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).
8. To the fullest extent permitted by law, PECO Energy Capital
Corp., the general partner of the Depositor (the "General Partner"), agrees to
indemnify and defend the Trustee, the registrar and any paying agent and their
directors, officers, employees and agents against, and hold each of them
harmless from, any liability, costs and expenses (including reasonable
attorneys' fees) that may arise out of or in connection with the trust receipts
of the Trust or the Trustee acting as Trustee or as the registrar or paying
agent, respectively, under this Trust Agreement, except for any liability
arising out of gross negligence, bad faith or willful misconduct on the part of
any such person or persons.
9. In the event that the Trustee is uncertain as to
application or interpretation of any provision of this Trust Agreement or must
choose between alternative courses of action, the Trustee may seek the
instructions of the Depositor by written notice requesting instructions. The
Trustee shall take and be protected in taking such action as has been directed
by the Depositor provided that if the Trustee does not receive instructions
within ten (10) days or such shorter time as is set forth in the Trustee notice,
the Trustee shall be under no duty to take or refrain from taking such action as
it shall deem advisable.
The Trustee shall not be liable for any action or any failure
to act by it in reliance upon the advice of or information from legal counsel,
accountants or any other person believed by it in good faith to be competent to
give such advice or information. The Trustee may rely and shall be protected in
acting upon any written notice, request, direction or other document believed by
it to be genuine and to have been signed or presented by the proper party or
parties.
3
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
PECO ENERGY CAPITAL, L.P.
By: PECO Energy Capital Corp.,
-----------------------------
its general partner
By: /s/ J.B. Mitchell
-----------------------------
Name: J.B. Mitchell
Title: President
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely in its
capacity as Trustee
By: /s/ Edward L. Truitt, Jr.
-----------------------------
Name: Edward L. Truitt, Jr.
Title: Assistant Vice
President
The General Partner joins in this Trust Agreement solely for
the purposes of obligating itself under Section 8 of this Trust Agreement and
not as grantor, trustee or beneficiary.
PECO ENERGY CAPITAL CORP.
By: /s/ J.B. Mitchell
-----------------------------
Name: J.B. Mitchell
Title: President
4