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AMENDED AND RESTATED
TRUST AGREEMENT
OF
PECO ENERGY CAPITAL TRUST II
PECO ENERGY CAPITAL, L.P.,
as Grantor
and
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Dated as of June ___, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
ARTICLE II
CONTINUATION OF TRUST
SECTION 2.01. Continuation of Trust......................................... 4
SECTION 2.02. Trust Account................................................. 5
SECTION 2.03. Title to Trust Property....................................... 5
SECTION 2.04. Situs of Trust................................................ 5
SECTION 2.05. Powers of Trustee Limited..................................... 5
SECTION 2.06. Liability of Holders of Receipts. ........................... 5
ARTICLE III
FORM OF RECEIPTS, EXECUTION AND
DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS
SECTION 3.01. Form and Transferability of Receipts.......................... 5
SECTION 3.02. Issuance of Receipts.......................................... 6
SECTION 3.03. Registration, Transfer and Exchange of Receipts............... 6
SECTION 3.04. Lost or Stolen Receipts, Etc.................................. 8
SECTION 3.05. Cancellation and Destruction of
Surrendered Receipts.............................. 8
ARTICLE IV
DISTRIBUTIONS AND OTHER RIGHTS OF HOLDERS OF RECEIPTS
SECTION 4.01. Distributions of Monthly Distributions
on Preferred Securities........................... 10
SECTION 4.02. Redemptions of Preferred Securities........................... 10
SECTION 4.03. Distributions in Liquidation of Grantor....................... 11
SECTION 4.04. Fixing of Record Date for Holders of Receipts................. 12
SECTION 4.05. Payment of Distributions.......................... 12
SECTION 4.06. Special Representative and Voting Rights...................... 12
SECTION 4.07. Changes Affecting Preferred Securities
and Reclassifications, Recapitalizations, Etc..... 13
ARTICLE V
THE GUARANTEE
SECTION 5.01. The Guarantee................................................. 13
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Page
ARTICLE VI
THE TRUSTEE
SECTION 6.01. Eligibility.................................................. 14
SECTION 6.02. Obligations of the Trustee................................... 14
SECTION 6.03. Resignation and Removal of the
Trustee; Appointment of Successor Trustee........ 16
SECTION 6.04. Corporate Notices and Reports................................ 17
SECTION 6.05. Status of Trust.................................. 17
SECTION 6.07. Indemnification by the General Partner....................... 18
SECTION 6.08. Fees, Charges and Expenses................................... 18
SECTION 6.09. Appointment of Co-Trustee or Separate Trustee................ 18
ARTICLE VII
AMENDMENT AND TERMINATION
SECTION 7.01. Supplemental Trust Agreement................................. 20
SECTION 7.02. Termination.................................................. 20
ARTICLE VIII
MERGER, CONSOLIDATION, ETC. OF GRANTOR
SECTION 8.01. Limitation on Permitted Merger
Consolidation, Etc. of Grantor................... 21
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Counterparts................................................. 21
SECTION 9.02. Exclusive Benefits of Parties................................ 22
SECTION 9.03. Invalidity of Provisions..................................... 22
SECTION 9.04. Notices...................................................... 22
SECTION 9.05. Trustee's Agents............................................. 23
SECTION 9.06. Holders of Receipts Are Parties.............................. 23
SECTION 9.07. Governing Law................................................ 23
SECTION 9.08. Headings..................................................... 23
SECTION 9.09. Receipts Non-Assessable and Fully Paid....................... 23
SECTION 9.10. No Preemptive Rights......................................... 23
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AMENDED AND RESTATED
TRUST AGREEMENT
AMENDED AND RESTATED TRUST AGREEMENT, dated as of June ___,
1997 (as amended from time to time, this "Trust Agreement") is among PECO ENERGY
CAPITAL, L.P., a Delaware limited partnership, as grantor (the "Grantor"), FIRST
UNION TRUST COMPANY, NATIONAL ASSOCIATION, as trustee (the "Trustee"), and
joined in by PECO ENERGY CAPITAL CORP., a Delaware corporation and the general
partner of the Grantor, not as a grantor, trustee or beneficiary but solely for
the purposes stated herein (the "General Partner").
W I T N E S S E T H:
WHEREAS, the Trustee and the Grantor established the Trust (as
defined below) under the Delaware Business Trust Act (12 Del. C. Section 3801,
et seq.) (as amended from time to time, the "Business Trust Act"), pursuant to a
Trust Agreement, dated as of May ___, 1997 (the "Original Trust Agreement"), and
a Certificate of Trust filed with the Secretary of State of the State of
Delaware on May ___, 1997; and
WHEREAS, the Trustee and the Grantor hereby desire to continue
the Trust and to amend and restate in its entirety the Original Trust Agreement;
and
WHEREAS, the Trust proposes to issue Receipts each
representing a ____% Cumulative Monthly Income Preferred Security, Series C,
representing a limited partner interest of the Grantor (the "Preferred
Securities"); and
WHEREAS, interests in the Trust are to be evidenced by Receipt
certificates issued by the 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 Receipts:
"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" 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" shall have the meaning set forth in the
recitals to this Trust Agreement.
"Commission" shall have the meaning set forth in Section 6.06
of this Trust Agreement.
"Corporate Office" means the office of the Trustee at which at
any particular time its business in respect of matters governed by this Trust
Agreement shall be administered, which at the date of this Trust Agreement is
located at 1 Rodney Square, 920 King Street, First Floor, Wilmington, Delaware
19801.
"DTC" means the Depositary Trust Company or any successor
thereto.
"Exchange" shall have the meaning set forth in Section 6.06 to
this Trust Agreement.
"Exchange Act" shall have the meaning set forth in Section
6.06 to this Trust Agreement.
"Exchange Act Reports" shall have the meaning set forth in
Section 6.06 to this Trust Agreement.
"General Partner" means PECO Energy Capital Corp., a Delaware
corporation, as general partner of the Grantor, and any successor thereto
pursuant to the terms of the Partnership Agreement.
"Grantor" means PECO Energy Capital, L.P., a Delaware limited
partnership, and its successors.
"Guarantee" means the Payment and Guarantee Agreement dated as
of June ___, 1997, as amended from time to time with respect to the Preferred
Securities delivered by PECO Energy to the Grantor.
"Holder" means the Person in whose name a certificate
representing one or more Receipts is registered on the Register maintained by
the Registrar for such purposes.
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"Partnership Agreement" means the Amended and Restated Limited
Partnership Agreement of the Grantor dated as of July 25, 1994, 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 4.05 of this Trust Agreement.
"PECO Energy" means PECO Energy Company, a Pennsylvania
corporation.
"Person" means any individual, 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 Monthly
Income Preferred Securities, Series C, representing limited partner interests of
the Grantor, or any Successor Securities issued to the Trust and held by the
Trustee (unless withdrawn under Section 3.06) from time to time under this Trust
Agreement for the benefit of the Holders.
"Receipt" shall mean a trust receipt issued hereunder
representing an interest in the Trust equal to and representing a Preferred
Security and evidenced by a certificate issued by the Trustee pursuant to
Article III.
"Redemption Date" shall have the meaning set forth in Section
4.02 of this Trust Agreement.
"Register" shall have the meaning set forth in Section 3.03
of this Trust Agreement.
"Registrar" shall mean any bank or trust company appointed to
register Receipt certificates and to register transfers thereof as herein
provided.
"Special Representative" shall have the meaning set forth in
Section 13.02(d) of the Partnership Agreement.
"Successor Securities" shall have the meaning set forth in
Section 13.02(e) of the Partnership Agreement.
"Trust" means the trust governed by this Trust Agreement.
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"Trust Agreement" shall mean this Amended and Restated Trust
Agreement, as the same may be amended, modified or supplemented from time to
time.
"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
PECO Energy 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.
"Trustee" shall mean First Union Trust Company, National
Association, a Delaware banking corporation, in its capacity as Trustee and not
in its individual capacity and any successor as trustee hereunder.
"1933 Act Registration Statement" shall have the meaning set
forth in Section 6.06 to this Trust Agreement.
"1934 Act Registration Statement" shall have the meaning set
forth in Section 6.06 to this Trust Agreement.
ARTICLE II
CONTINUATION OF TRUST
SECTION 2.01. Continuation of Trust.
(a) The Trust continued hereby shall be known as
"PECO Energy Capital Trust II." The Trust exists for the sole purpose of issuing
Receipts representing the Preferred Securities held by the Trust and performing
functions directly related thereto. The Grantor hereby delivers to the Trustee
for deposit in the Trust a certificate representing 2,000,000 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 Receipts 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 Trustee
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
Receipts 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,
Trustee or any other Holder individually or to Holders as a group. Subject to
Section 7.02, this Trust shall be irrevocable.
(b) The Trustee hereby acknowledges receipt of
the Preferred Securities, registered in the name of the Trust,
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and its acceptance on behalf of the Trust of the Preferred Securities, and
declares that it shall hold the Preferred Securities (including any Successor
Securities) in the Trust for the benefit of the Holders.
SECTION 2.02. Trust Account. The Trustee shall open an account
entitled "PECO Energy Capital Trust II - Trust Account." All funds received by
the Trustee on behalf of the Trust from the Preferred Securities or pursuant to
Article V will be deposited in such account by the Trustee until distributed as
provided in Article IV.
SECTION 2.03. Title to Trust Property. Legal title to all of
the Trust Estate shall be vested at all times in the Trustee.
SECTION 2.04. Situs of Trust. The situs of the Trust shall be
in Wilmington, Delaware. The Trust's bank account shall be maintained with a
bank in the State of Delaware. The Trustee shall cause to be maintained the
books and records of the Trust at the Corporate Office. The Trust Estate shall
be held in the State of Delaware. Notwithstanding the foregoing, the Trustee may
transfer such of the books and records of the Trust to a Co-Trustee appointed
pursuant to Section 6.09 or to such agents as it may appoint in accordance with
the Section 9.05 hereof, as shall be reasonably necessary (and for so long as
may be reasonably necessary) to enable such Co-Trustee or agents to perform the
duties and obligations for which such Co-Trustee or agents may be so employed.
SECTION 2.05. Powers of Trustee Limited. The Trustee shall
have no power to create, assume or incur indebtedness or other liabilities in
the name of the Trust. The Trustee shall have full power to conduct the business
of the Trust of holding the Preferred Securities for the Holders and taking the
other actions provided by this Trust Agreement.
SECTION 2.06. Liability of Holders of Receipts. With respect
to the Trust, Holders of Receipts shall be entitled to the same limitation of
personal liability to which stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware are
extended.
ARTICLE III
FORM OF RECEIPTS, EXECUTION AND
DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS
SECTION 3.01. Form and Transferability of Receipts.
(a) Except as otherwise required by DTC, Receipts shall be
evidenced by certificates engraved or printed or lithographed with
steel-engraved borders
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and underlying tint 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 Receipts shall be executed by the
Trustee by the manual signature of a duly authorized signatory of the Trustee,
provided, however, that such signature may be a facsimile if a Registrar (other
than the Trustee) shall have countersigned the Receipts by manual signature of a
duly authorized signatory of the Registrar. No certificate evidencing one or
more Receipts shall be entitled to any benefit under this Trust Agreement or be
valid or obligatory for any purpose unless it shall have been executed as
provided in the preceding sentence. The Registrar shall record on the Register
each Receipt certificate executed as provided above and delivered as hereinafter
provided.
(c) Certificates evidencing Receipts shall be in denominations
of any whole number of Preferred Securities. All Receipt certificates shall be
dated the date of their execution or countersignature.
(d) Certificates evidencing Receipts 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 Trustee or required to comply with any applicable law or regulation or with
the rules and regulations of any securities exchange upon which the Receipts may
be listed or to conform with any usage with respect thereto.
(e) Title to any Receipt 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 3.03, the Trust, the Trustee,
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 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 3.02. Issuance of Receipts. Upon receipt by the
Trustee on behalf of the Trust of a certificate or certificates for the
Preferred Securities, subject to the terms and conditions of this Trust
Agreement, the Trustee, on behalf of the Trust, shall execute and deliver to DTC
certificates evidencing the Receipts in the name of DTC's nominee, who shall
thereupon be the initial Holder of Receipts.
SECTION 3.03. Registration, Transfer and Exchange of
Receipts. The Trustee shall cause the Register to be kept at the
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office of the Registrar in which, subject to such reasonable regulations as the
Trustee and the Registrar may prescribe, the Trustee shall provide for the
registration of Receipt certificates and of transfers and exchanges of Receipt
certificates as herein provided. The Grantor hereby appoints First Union Trust
Company, National Association 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 Receipt 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 Trustee shall execute a new
Receipt certificate representing the same number of Preferred Securities in
accordance with Section 3.01(b) and deliver the same to or upon the order of the
Person entitled thereto.
At the option of a Holder, Receipt certificates may be
exchanged for other Receipt certificates representing the same number of
Preferred Securities. Upon surrender of a Receipt certificate at the office of
the Registrar or such other office as the Trustee may designate for the purpose
of effecting an exchange of Receipt certificates, subject to the terms and
conditions of this Trust Agreement, the Trustee shall execute and deliver a new
Receipt certificate representing the same number of Preferred Securities as the
Receipt certificate surrendered.
As a condition precedent to the registration of the transfer
or exchange of any Receipt 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 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 Receipts for
any registration of transfer or exchange of Receipt certificates, but the
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 Receipt certificates.
Neither the Trustee nor the Registrar shall be required (a) to
register the transfer of or exchange any Receipt certificate for a period
beginning at the opening of business ten days preceding any selection of
Receipts to be redeemed and ending at the close of business on the day of the
mailing a notice of redemption of Receipts or (b) to register the transfer
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of or exchange of Receipts called or being called for redemption in whole or in
part, except as provided in Section 4.02.
SECTION 3.04. Lost or Stolen Receipts, Etc. In case any
Receipt certificate shall be mutilated or destroyed or lost or stolen and in the
absence of notice to the Trustee that such Receipt has been acquired by a bona
fide purchaser, the Trustee shall execute and deliver a Receipt certificate of
like form and tenor in exchange and substitution for such mutilated Receipt
certificate or in lieu of and in substitution for such destroyed, lost or stolen
Receipt certificate, provided, however, that the Holder thereof provides the
Trustee with (i) evidence satisfactory to the Trustee of such destruction, loss
or theft of such Receipt certificate, of the authenticity thereof and of his
ownership thereof, (ii) reasonable indemnification satisfactory to the Trustee
and (iii) payment of any expense (including fees, charges and expenses of the
Trustee) in connection with such execution and delivery. Any duplicate Receipt
certificate issued pursuant to this Section 3.04 shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Receipt certificate shall be found
at any time.
SECTION 3.05. Cancellation and Destruction of Surrendered
Receipts. All Receipt certificates surrendered to the Trustee shall be cancelled
by the Trustee. Except as prohibited by applicable law or regulation, at any
time after six years from the date of surrender of any Receipt certificate, the
Trustee may destroy such cancelled Receipt certificates.
SECTION 3.06. Surrender of Receipts and Withdrawal of Preferred
Securities. Any beneficial owner of Receipts may withdraw all, but not less than
all, of the Preferred Securities represented by such Receipts by providing a
written notice and an agreement to be bound by the terms of the Partnership
Agreement to the Trustee at the Corporate Office or at such other office as the
Trustee may designate for such withdrawals, with evidence of beneficial
ownership in form satisfactory to the Trustee. Within a reasonable period after
such request has been properly made, the Trustee shall instruct DTC to reduce
the number of Receipts represented by the global certificate held by DTC by an
amount equal to the number of Receipts to be so withdrawn by the withdrawing
owner, the Trustee shall issue to the withdrawing owner a certificate
representing the number of Preferred Securities so withdrawn and the Trustee
shall reduce the number of Preferred Securities represented by the global
certificate held by the Trustee by a like amount; provided, that the Trustee
shall not issue any fractional number of Preferred Securities. If a withdrawing
owner of Receipts withdraws Preferred Securities in accordance with this Section
3.06, such withdrawing owner of Receipts shall cease to be a beneficial owner in
the Trust. The Series C Preferred Securities will only be issued in certificated
form.
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A withdrawing owner who wishes to withdraw Series C Preferred
Securities in accordance with this Section 3.06 will be required to provide the
Grantor with a completed Form W-8 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 partner of the Grantor upon such
withdrawing owner's receipt of a certificate evidencing such Preferred
Securities registered in such withdrawing owner's name.
The Trustee shall deliver the Preferred Securities represented
by the Receipts surrendered to the withdrawing owner in accordance with this
Section 3.06 at the Corporate Office, except that, at the request, risk and
expense of the withdrawing owner and for the account of the withdrawing owner
thereof, such delivery may be made at such other place as may be designated by
such withdrawing owner.
Notwithstanding anything in this Section 3.06 to the contrary,
if the Preferred Securities represented by Receipts have been called for
redemption in accordance with the Partnership Agreement, no withdrawing owner of
such Receipts may withdraw any or all of the Preferred Securities represented by
such Receipts.
SECTION 3.07. 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 Trustee of a certificate or certificates for the
Preferred Securities to be deposited, properly endorsed or accompanied, if
required by the Trustee, by a properly executed instrument of transfer or
endorsement in form satisfactory to the Trustee and in compliance with the terms
of the Partnership Agreement, together with all such certifications as may be
required by the Trustee in its sole discretion and in accordance with the
provisions of this Trust Agreement. Within a reasonable period after such
deposit is properly made, the Trustee shall instruct DTC to increase the number
of Receipts represented by the global certificate held by DTC by an amount equal
to the Preferred Securities to be deposited. The Preferred Trust Receipts will
not be issued in certificated form. The Trustee will only accept the deposit of
such Preferred Securities upon payment by such holder of Preferred Securities to
the Trustee 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 Trustee, Preferred Securities presented for
deposit at any time shall also be accompanied by an agreement or assignment, or
other instrument satisfactory to the Trustee, that will provide for the prompt
transfer to the 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
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Securities, or in lieu thereof such agreement of indemnity or other agreement as
shall be satisfactory to the Trustee.
SECTION 3.08. Filing Proofs, Certificates, and Other
Information. Any Person presenting Preferred Securities for redeposit in
accordance with Section 3.07 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 Trustee may
reasonably deem necessary or proper. The Trustee may withhold or delay the
delivery of any Receipt or Receipts, the transfer, redemption or exchange of any
Receipt or Receipts 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.
ARTICLE IV
DISTRIBUTIONS AND OTHER RIGHTS OF HOLDERS OF RECEIPTS
SECTION 4.01. Distributions of Monthly Distributions on
Preferred Securities. Whenever the Trustee shall receive any cash distribution
representing a monthly distribution on the Preferred Securities (whether or not
distributed by the Grantor on the regular monthly distribution date therefor) or
payment under the Guarantee in respect thereof pursuant to Article V of this
Agreement, the Trustee acting directly or through any Paying Agent shall
distribute to Holders of Receipts on the record date fixed pursuant to Section
4.04, such amounts in proportion to the respective numbers of Preferred
Securities represented by the Receipts held by such Holders.
SECTION 4.02. 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 Trustee) give the Trustee not less than 40 days' prior notice
thereof. The Trustee shall, as directed by the Grantor, mail, or cause to be
mailed, first-class postage prepaid, notice of the redemption of Preferred
Securities and the proposed simultaneous redemption of the Receipts to be
redeemed in connection herewith, not less than 30 and not more than 60 days
prior to the date fixed for redemption (the "Redemption Date") of the Receipts.
Such notice shall be mailed to the Holders of the Receipts 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 Trustee with such notice,
and each such notice shall state: the Redemption Date; the redemption price at
which the Receipts and the Preferred Securities are to be redeemed; that all
outstanding Receipts are
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to be redeemed or, in the case of a redemption of fewer than all outstanding
Receipts in connection with a partial redemption of Preferred Securities, the
number of such Receipts to be so redeemed; the place or places where Receipts to
be redeemed are to be surrendered for redemption; and specifying the CUSIP
number assigned to the Receipts. In case fewer than all the outstanding Receipts
are to be redeemed, the Receipts 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 Trustee.
The Grantor agrees that if a partial redemption of the
Preferred Securities would result in a delisting of the Receipts from any
national exchange on which the Receipts are then listed, the Grantor will only
redeem the Preferred Securities in whole.
On the date of any such redemption of Preferred Securities,
provided that the Grantor (or PECO Energy pursuant to the Guarantee) shall then
have deposited with the Trustee the aggregate amount payable upon redemption of
the Preferred Securities to be redeemed, the Trustee shall redeem (using the
funds so deposited with it) Receipts representing the same number of Preferred
Securities 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 4.02 and PECO Energy shall have failed to
pay the redemption price of the Preferred Securities under the Guarantee), the
Receipts called for redemption shall be deemed no longer to be outstanding and
all rights of the Holders of Receipts (except the right to receive cash upon
surrender of Receipts) shall cease and terminate. Upon surrender in accordance
with said notice of the Receipts endorsed or assigned for transfer, if the
Trustee shall so require, the Holders of such Receipts shall receive for each
such Receipt 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 Receipts of any Holder are called for
redemption, the Registrar will deliver to the Holder of such Receipts upon
surrender of the certificate evidencing such Receipts a new certificate
evidencing the number of Receipts not called for redemption.
SECTION 4.03. Distributions in Liquidation of Grantor. Upon
receipt by the Trust of any distribution from the Grantor upon the liquidation
of the Grantor or any payment under the Guarantee in respect thereof pursuant to
Article V of this Trust Agreement, after satisfaction of creditors of the Trust
as required by applicable law, the Trustee shall distribute to the
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Holders of Receipts on the record date fixed pursuant to Section 4.04, such
amounts in proportion to the respective number of Preferred Securities which
were represented by the Receipts held by such Holders.
SECTION 4.04. Fixing of Record Date for Holders of Receipts.
Whenever any distribution (other than upon any redemption) shall become payable,
or whenever the 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 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 Receipts 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 4.05. Payment of Distributions. The Grantor shall
appoint one or more Paying Agents for the purpose of paying monthly
distributions on, the redemption price of, and distributions in liquidation on
the Receipts. The Grantor hereby appoints First Union Trust Company, National
Association to act as Paying Agent and designates the Wilmington office of the
Paying Agent as the place of payment of the redemption price of and of
distributions in liquidation on the Receipts. The aforesaid appointment and
designation shall remain in effect until changed by the Grantor. Payments of
monthly distributions on the Receipts shall be payable by wire transfer into the
accounts of or check mailed to the addresses of the Holders thereof on the
record date therefor. Payments of the redemption price of Receipts and
distributions in liquidation shall be made upon surrender of such Receipts at
the office of the Paying Agent. The Trustee is hereby authorized to direct the
Grantor to pay monthly distributions on, the redemption price of, and
distributions in liquidation on, the Preferred Securities directly to the Paying
Agent for distribution in accordance with the terms of this Trust Agreement.
SECTION 4.06. 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, the Trustee shall notify the Holders of the Receipts
of such right, request direction of each Holder of a Receipt as to the
appointment of a Special Representative and vote the Preferred Securities
represented by such Receipt 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, the Trustee shall notify
12
the Holders of the Receipts and, if so directed by the Holders of Receipts
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 Trustee shall, as soon as
practicable thereafter, mail to the Holders of Receipts 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
Receipts at the close of business on a specified record date fixed pursuant to
Section 4.04 will be entitled, subject to any applicable provision of law or of
the Partnership Agreement, to instruct the Trustee as to the exercise of the
voting rights pertaining to the amount of Preferred Securities represented by
their respective Receipts, 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
Receipt on such record date, the Trustee shall vote or cause to be voted the
number of Preferred Securities represented by the Receipts evidenced by such
Receipt 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 Trustee in order to enable the 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 Receipt, the Trustee will abstain from voting
to the extent of the Preferred Securities represented by such Receipt.
SECTION 4.07. Changes Affecting Preferred Securities and
Reclassifications, Recapitalizations, Etc. Upon any consolidation, amalgamation,
merger, replacement or conveyance, 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 Trustee shall, upon the instructions of the Grantor,
treat any Successor Securities or other property (including cash) that shall be
received by the Trustee in exchange for or upon conversion of or in respect of
the Preferred Securities as part of the Trust Estate and Receipts 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.
ARTICLE V
THE GUARANTEE
SECTION 5.01. The Guarantee. In connection with the
issuance of the Preferred Securities, PECO Energy has delivered
13
to the General Partner the Guarantee for the benefit of the holders of the
Preferred Securities. If the General Partner or the Grantor receives any payment
under the Guarantee, the General Partner or the Grantor, as the case may be,
will immediately transfer such payment to the Trustee. All rights to enforce the
Guarantee shall remain in the General Partner, except to the extent set forth in
Section 2.04 of the Guarantee.
ARTICLE VI
THE TRUSTEE
SECTION 6.01. Eligibility. This Trust Agreement shall at all
times have a Trustee which is a bank that has its principal place of business in
the State of Delaware and shall have a combined capital and surplus of at least
$50,000,000. If such corporation publishes reports of conditions at least
annually, pursuant to law or to the requirements of Federal, State, Territorial
or District of Columbia supervising or examining authority, then for the
purposes of this Section 6.01, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of conditions so published.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.01, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.03.
The Trustee shall make available for inspection by Holders of
Receipts at the Corporate Office and at such other places as it may from time to
time deem advisable during normal business hours any reports and communications
received from the Grantor, the General Partner or PECO Energy by the Trustee as
the holder of Preferred Securities.
Promptly upon request from time to time by the Grantor, the
Trustee shall cause the Registrar to furnish to it a list, at the sole expense
of the General Partner, as of a recent date, of the names, addresses and
holdings of all Persons in whose names Receipts are registered on the Register.
SECTION 6.02. Obligations of the Trustee. The Trustee does not
assume any obligation nor shall it be subject to any liability under this Trust
Agreement or any Receipt to Holders of Receipts other than that it agrees to use
good faith in the performance of such duties as are specifically assigned to the
Trustee in this Trust Agreement.
The Trustee shall not be under any obligation to appear in,
prosecute or defend any action, suit or other proceeding with respect to
Preferred Securities or Receipts that in its opinion
14
may involve it in expense or liability, unless indemnity satisfactory to it
against all expense and liability be furnished as often as may be required.
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 Grantor (or the Special Representative if one has been appointed) by written
notice requesting instructions. The Trustee shall take and be protected in
taking such action as has been directed by the Grantor (or the Special
Representative if one has been approved) provided that if the Trustee does not
receive instructions within 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 not inconsistent with this Trust Agreement as it shall deem
advisable and in the interest of the Holders.
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, any Holder of a Receipt 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.
The Trustee, its parent, Affiliates or subsidiaries may own,
buy, sell or deal in any class of securities of the Grantor, the General Partner
or PECO Energy and its Affiliates and in Receipts or become pecuniarily
interested in any transaction in which the Grantor, the General Partner or PECO
Energy or its Affiliates may be interested or contract with or lend money to or
otherwise act as fully or as freely as if it were not the Trustee hereunder. The
Trustee may also act as transfer agent or registrar of any of the securities of
the Grantor, the General Partner or PECO Energy and its Affiliates or act in any
other capacity for PECO Energy or its Affiliates.
The Trustee (and its officers, directors, employees and
agents) makes no representation nor shall it have any responsibility with
respect to the issuance of Receipts or as to the validity of the registration
statement pursuant to which the Receipts are registered under the Securities
Act, the Preferred Securities, the Guarantee or the Receipts (except for its
counter-signatures thereon) or any instruments referred to therein or herein, or
as to the correctness of any statement made therein or herein; provided,
however, that the Trustee is responsible for its representations in this Trust
Agreement.
15
The Trustee assumes no responsibility for the correctness of
the description that appears in the Receipts, which can be taken as a statement
of the Grantor summarizing certain provisions of this Trust Agreement.
Notwithstanding any other provision herein or in the Receipts, the Trustee makes
no warranties or representations as to the validity, genuineness or sufficiency
of any Preferred Securities or the Guarantee or of the Receipts, as to the
validity or sufficiency of this Trust Agreement, as to the value of the Receipts
or as to any right, title or interest of the Holders of Receipts, except that
the Trustee hereby represents and warrants as follows: (i) the Trustee has been
duly organized and is validly existing and in good standing under federal law,
with full power, authority and legal right under such laws to execute, deliver
and carry out the terms of this Trust Agreement; (ii) this Trust Agreement has
been duly authorized, executed and delivered by the Trustee; and (iii) this
Trust Agreement constitutes a valid and binding obligation of the Trustee
enforceable against the Trustee in accordance with its terms subject to
equitable principles and laws affecting the enforcement of creditors' rights
generally.
SECTION 6.03. Resignation and Removal of the Trustee;
Appointment of Successor Trustee. The Trustee may at any time resign as Trustee
hereunder by notice of its election to do so delivered to the Grantor and the
General Partner, such resignation to take effect upon the appointment of a
successor trustee and its acceptance of such appointment as hereinafter
provided.
The Trustee may at any time be removed by the Grantor by
notice of such removal delivered to the Trustee, such removal to take effect
upon the appointment of a successor trustee and its acceptance of such
appointment as hereinafter provided.
In case at any time the Trustee acting hereunder shall resign
or be removed, the Grantor shall, within 45 days after the delivery of the
notice of resignation or removal, as the case may be, appoint a successor
trustee, which shall be a bank or trust company, or an Affiliate of a bank or
trust company, having its principal office in the State of Delaware and having a
combined capital and surplus of at least $50,000,000. If a successor Trustee
shall not have been appointed in 45 days, the resigning Trustee may petition a
court of competent jurisdiction to appoint a successor trustee. Every successor
trustee shall execute and deliver to its predecessor and to the Grantor and the
General Partner an instrument in writing accepting its appointment hereunder,
and thereupon such successor trustee, without any further act or deed, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor and for all purposes shall be the Trustee under this Trust
Agreement, and such predecessor, upon payment of all sums due it and on the
written request of the Grantor, shall promptly execute and
16
deliver an instrument transferring to such successor all rights and powers of
such predecessor hereunder, shall duly assign, transfer and deliver all rights,
title and interest in the Preferred Securities and any moneys or property held
hereunder to such successor and shall deliver to such successor a list of the
Holders of all outstanding Receipts. Any successor Trustee shall promptly mail
notice of its appointment to the Holders of Receipts.
Any Person into or with which the Trustee may be merged,
consolidated or converted, or any Person succeeding to the corporate trust
business of the Trustee, shall be the successor of such Trustee without the
execution or filing of any document or any further act, provided such Person
shall be eligible under the provisions of the immediately preceding paragraph.
SECTION 6.04. Corporate Notices and Reports. The General
Partner agrees that it will give timely notice to the Trustee and any Paying
Agent of any record date for the Preferred Securities and that it will deliver
to the Trustee, and the Trustee will, promptly after receipt thereof, transmit
to the Holders of Receipts, in each case at the address recorded on the
Register, copies of all notices and reports (including financial statements)
required by law, by the rules of any national securities exchange upon which the
Receipts are listed or by the Partnership Agreement to be furnished to holders
of Preferred Securities. Such transmission will be at the expense of the General
Partner and the General Partner will provide the Trustee with such number of
copies of such documents as the Trustee may reasonably request. In addition, the
Trustee will transmit to the Holders of Receipts at the Grantor's expense such
other documents as may be requested by the Grantor.
SECTION 6.05. Status of Trust. It is intended that the Trust
shall not be an "investment company" under the Investment Company Act of 1940,
as amended. While it is expressly understood and agreed that the Trustee is
acting only in a ministerial capacity hereunder, the Securities and Exchange
Commission (the "Commission") has determined that as of the date hereof, the
Trust is an issuer under the Federal securities laws and is thus required to
sign any registration statement filed or to be filed in connection with the
Receipts.
SECTION 6.06. Appointment of Grantor to File on Behalf of
Trust. The Grantor and the Trustee hereby authorize and direct the Grantor, as
the sponsor of the Trust (i) to file with 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
17
amended, of the Receipts of the Trust and certain other securities; (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 Receipts under Section 12(b) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"); and (c) any reports or other
papers or documents required to be filed by, or desirable to be filed with, the
Commission, under the Exchange Act ("Exchange Act Reports"); (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 Receipts to be listed on any of
the Exchanges; and (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 Receipts under the securities or "Blue
Sky" laws of such jurisdictions as the Grantor, on behalf of the Trust, may deem
necessary or desirable.
SECTION 6.07. Indemnification by the General Partner. To the
fullest extent permitted by law, 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 its acting as the Trustee or the Registrar or
Paying Agent, respectively, under this Trust Agreement and the Receipts, except
for any liability arising out of negligence, bad faith or willful misconduct on
the part of any such Person or Persons.
SECTION 6.08. Fees, Charges and Expenses. No fees, charges or
expenses of the Trustee or any Trustee's agent hereunder or of any Registrar
shall be payable by any Person other than the General Partner, provided that if
the Trustee incurs fees, charges or expenses for which it is not otherwise
liable under this Trust Agreement due to any action taken at the election of a
Holder of Receipts or other Person, such Holder or other Person will be liable
for such fees, charges and expenses.
SECTION 6.09. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Trust
Agreement, at any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any party of the Trust
18
must at the time be located, the Trustee shall have the power and may execute
and deliver all instruments to appoint one or more Persons to act as co-trustee
or co-trustees, or separate trustee or separate trustees, of all or any part of
the Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Holders, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section 6.09, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as successor trustee under Section 6.03 and no notice
to the Holders of the appointment of any co-trustee or separate trustee shall be
required.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being understood that
such separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that
under any laws of any jurisdiction in which any particular act or acts
are to be performed, the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) no Trustee hereunder shall be personally
liable by reason of any act or omission of any other trustee
hereunder; and
(iii) the Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Trust
Agreement. Each separate trustee and co-trustee, upon its acceptance of the
trusts conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Trustee or separately, as may
be provided therein, subject to all the provisions of this Trust Agreement,
specifically including every provision of this Trust Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the
19
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Grantor.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect to this Trust Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
ARTICLE VII
AMENDMENT AND TERMINATION
SECTION 7.01. Supplemental Trust Agreement. The Grantor or the
General Partner may, and the 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 Trustee, for any of the
following purposes:
(a) to evidence the succession of another
partnership, corporation or other entity 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
(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; or
(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
(c)(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 66-2/3% of the then outstanding Receipts.
SECTION 7.02. Termination. The Trust Agreement shall
terminate on the date that all outstanding Receipts have been redeemed or there
has been a final distribution in respect of the Preferred Securities in
connection with any liquidation,
20
dissolution or winding up of the Grantor and such distribution has been made to
the Holders of the Receipts. Except as provided in Section 6.07 and Section
6.08, upon termination of this Trust Agreement and the Trust in accordance with
the foregoing, the respective obligations and responsibilities of the Trustee,
the Grantor and the General Partner created hereby shall terminate.
ARTICLE VIII
MERGER, CONSOLIDATION, ETC. OF GRANTOR
SECTION 8.01. 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 corporation or
other entity without the consent of the Holders of 66-2/3% of the Receipts
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 Receipts to be delisted by any national securities exchange
or other organization on which the Receipts are then listed, (ii) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
cause the Receipts 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, PECO Energy has received an opinion of counsel (which may be regular
counsel to PECO Energy or an Affiliate, but not an employee thereof) experienced
in such matters to the effect that Holders of outstanding Receipts 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.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Counterparts. This Trust Agreement may be
executed by the Grantor, the Trustee and the General Partner in separate
counterparts, each of which counterparts, when so executed and delivered shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Trust Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Trust Agreement. Copies of this Trust
Agreement shall be filed with the Trustee and the Trustee's agents and shall be
open to
21
inspection during business hours at the Corporate Office and the respective
offices of the Trustee's agents, if any, by any Holder of a Receipt.
SECTION 9.02. Exclusive Benefits of Parties. This Trust
Agreement is for the exclusive benefit of the parties hereto and the Holders of
the Receipts and the Preferred Securities, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other Person whatsoever.
SECTION 9.03. Invalidity of Provisions. In case any one or
more of the provisions contained in this Trust Agreement or in the Receipts
should be or become invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein or therein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 9.04. Notices. Any notices to be given to the Grantor
or the General Partner hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail, or by telegram or telex
or telecopier confirmed by letter, addressed to the General Partner at 1013
Centre Road, Suite 350F, Wilmington, Delaware 19805, Attention: President, or at
any other place to which the General Partner may have transferred its principal
executive office.
Any notices to be given to the Trustee hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail, or by telegram or telex or telecopier
confirmed by letter, addressed to the Trustee at the Corporate Office.
Any notices given to any Holder of a Receipt hereunder or
under the Receipts shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by mail, or by telegram or telex or
telecopier confirmed by letter, addressed to such Holder at the address of such
Holder as it appears on the books of the Trustee or, if such Holder shall have
timely filed with the Trustee a written request that notices intended for such
Holder be mailed to some other address, at the address designated in such
request.
Delivery of a notice sent by mail, or by telegram or telex or
telecopier shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a duly addressed letter confirming an earlier
notice in the case of a telegram or telex or telecopier message) is deposited,
postage prepaid, in a post office letter box. The Trustee may, however, act upon
any telegram or telex or telecopier message received by it from the other or
from any Holder of a Receipt,
22
notwithstanding that such telegram or telex or telecopier message shall not
subsequently be confirmed by letter as aforesaid.
SECTION 9.05. Trustee's Agents. The Trustee may from time to
time appoint agents to act in any respect for the Trustee for the purposes of
this Trust Agreement. The Trustee shall have no liability for the acts or
omissions of agents selected by it with due care. The Trustee will notify the
General Partner prior to any such action.
SECTION 9.06. Holders of Receipts Are Parties. Notwithstanding
that Holders of Receipts have not executed and delivered this Trust Agreement or
any counterpart thereof, the Holders of Receipts from time to time shall be
bound by all of the terms and conditions hereof and of the Receipts by
acceptance of delivery of Receipts.
SECTION 9.07. Governing Law. This Trust Agreement and the
Receipts and all rights hereunder and thereunder and provisions hereof and
thereof 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.
SECTION 9.08. Headings. The headings of articles and sections
of this Trust Agreement and in the form of the Receipt set forth in Exhibit A
hereto have been inserted for convenience only and are not to be regarded as
part of this Trust Agreement or to have any bearing upon the meaning or
interpretation of any provision contained herein or in the Receipts.
SECTION 9.09. Receipts Non-Assessable and Fully Paid. The
Holders of the Receipts shall not be personally liable for obligations of the
Trust, the interests in the Trust represented by the Receipts shall be
non-assessable for any losses or expenses of the Trust or for any reason
whatsoever, and the Receipts upon delivery thereof by the Trustee pursuant to
this Trust Agreement are and shall be deemed fully paid.
SECTION 9.10. No Preemptive Rights. No Holder shall be
entitled as a matter of right to subscribe for or purchase, or have any
preemptive 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.
23
IN WITNESS WHEREOF, the Grantor and the Trustee and the
General Partner have duly executed this Trust Agreement as of the day and year
first above set forth.
PECO ENERGY CAPITAL, L.P.
By: PECO ENERGY CAPITAL CORP.,
its general partner
By: __________________________________
Name: J. Barry Mitchell
Title: President
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION
By: __________________________________
Name:
Title:
The General Partner joins in this Trust Agreement solely for the
purposes of obligating itself under Sections 6.04, 6.07 and 6.08 of this Trust
Agreement and not as grantor, trustee or beneficiary.
PECO ENERGY CAPITAL CORP.
By: __________________________________
Name: J. Barry Mitchell
Title: President
24
EXHIBIT A
TRUST RECEIPTS
OF PECO ENERGY CAPITAL TRUST II,
a Delaware Business Trust,
each Representing an ____% Cumulative
Monthly Income Preferred Security, Series C of
PECO Energy Capital, L.P. (a Delaware limited partnership)
No. _________ ___________ Receipts
First Union Trust Company, National Association, not in its
individual capacity, but solely as Trustee (the "Trustee"), hereby certifies
that ______________ is the registered owner of __________ Receipts (the
"Receipts"), each representing a ____% Cumulative Monthly Income Preferred
Security, Series C (the "Preferred Securities") of PECO Energy Capital, L.P., a
Delaware limited partnership (the "Grantor"), deposited in trust by the Grantor
with the Trustee pursuant to an Amended and Restated Trust Agreement of PECO
Energy Capital Trust II dated as of June ___, 1997 (as amended or supplemented
from time to time, the "Trust Agreement") among the Grantor, the Trustee and
PECO Energy Capital Corp., the general partner of the Grantor (the "General
Partner"). 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 Trustee under the Trust Agreement, as are represented by the
Receipts 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, a copy of which is on file at the
Corporate Office.
1. The Trust Agreement. The Receipts 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 Office of the Trustee) sets forth the rights
of Holders of Receipts and the rights and duties of the Trustee, the Grantor and
the General Partner. 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 Trustee and any other Holder, each
Holder shall be entitled to enforce in the name of the Trust the Trust's rights
under the Preferred
A-1
Securities represented by the Receipts 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, Trustee or any other Holder individually or to Holders
as a group. Any beneficial owner of Receipts may withdraw all, but not less than
all, of the Preferred Securities represented by such Receipts by providing a
written notice and an agreement to be bound by the terms of the Partnership
Agreement to the Trustee at the Corporate Office, with evidence of beneficial
ownership in form satisfactory to the Trustee; provided, however, that the
Trustee shall not issue any fractional number of Preferred Securities.
3. Distributions of Monthly Distributions on Preferred
Securities. Whenever the Trustee shall receive any cash distribution
representing a monthly distribution on the Preferred Securities (whether or not
distributed by the Grantor on the regular monthly distribution date therefor) or
payment by PECO Energy Company ("PECO Energy") under the Payment and Guarantee
Agreement dated as of June ___, 1997 (the "Guarantee") in respect thereof, the
Trustee acting directly or through any Paying Agent shall distribute to Holders
of Receipts on the record date therefor, such amounts in proportion to the
respective numbers of Preferred Securities represented by the Receipts 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
Trustee) give the Trustee not less than 40 days' prior notice thereof. The
Trustee shall, as directed by the Grantor, mail, first-class postage prepaid,
notice of the redemption of Preferred Securities and the proposed simultaneous
redemption of the Receipts to be redeemed, not less than 30 and not more than 60
days prior to the date fixed for redemption of such Preferred Securities and
Receipts. Such notice shall be mailed to the Holders of the Receipts, at the
addresses of such Holders as the same appear on the records of the Trustee. 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 Receipts are to be redeemed,
the Receipts 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
Preferred Securities, provided that the Grantor (or PECO Energy pursuant to the
Guarantee) shall then have deposited with the Trustee the aggregate amount
payable upon redemption of the Preferred Securities to be redeemed, the Trustee
shall redeem (using the funds so deposited with it) Receipts representing the
same number of Preferred Securities to be redeemed by the Grantor.
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5. Distributions in Liquidation. Upon receipt by the Trustee
of any distribution from the Grantor 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 Trustee shall distribute to Holders
of Receipts on the record date therefor, such amounts in proportion to the
respective number of Preferred Securities which were represented by the Receipts
held by such Holders.
6. Fixing of Record Date for Holders of Receipts. Whenever any
distribution (other than upon any redemption) shall become payable, or whenever
the 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 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 Receipts 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 monthly distributions
on the Receipts shall be payable by wire transfer into the accounts of or check
mailed to the addresses of the Holders thereof on the record date therefor.
Payments of the redemption price of Receipts and distributions in liquidation
shall be made against surrender of such Receipts at the office of First Union
Trust Company, National Association, as the Paying Agent.
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, the
Trustee shall notify the Holders of the Receipts of such right, request
direction of each Holder of a Receipt and vote the Preferred Securities
represented by such Receipt 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, the Trustee shall notify the
Holders of the Receipts and, if so directed by the Holders of Receipts
representing Preferred Securities constituting at least 10% of the aggregated
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 Trustee
shall, as soon as practicable thereafter, mail to the Holders of Receipts a
notice, which shall be provided by the Grantor and which shall contain (i) such
information as is
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contained in such notice of meeting, (ii) a statement that the Holders of
Receipts 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 Trustee as to the exercise of the voting rights
pertaining to the amount of Preferred Securities represented by their respective
Receipts, 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 Receipt on
such record date, the Trustee shall vote or cause to be voted the number of
Preferred Securities represented by the Receipts in accordance with the
instructions set forth in such request. In the absence of specific instructions
from the Holder of a Receipt, the Trustee will abstain from voting to the extent
of the Preferred Securities represented by such Receipt.
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 Trustee shall, upon the instructions
of the Grantor, treat any Successor Securities or other property that shall be
received by the Trustee in exchange for or upon conversion of or in respect of
the Preferred Securities as part of the Trust Estate, and Receipts 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 Receipts. Subject to the terms
and conditions of the Trust Agreement, the Trustee shall register the transfer
on its books from time to time of Receipt 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 Trustee shall execute a new Receipt
representing the same aggregate number of the Receipts surrendered in accordance
with the Trust Agreement and deliver the same to or upon the order of the Person
entitled thereto.
Upon surrender of a Receipt at the Corporate Office or such
other office as the Trustee may designate for the purpose of effecting an
exchange of Receipt certificates, subject to the terms and conditions of the
Trust Agreement, the Trustee shall execute and deliver a new Receipt certificate
representing the same number of Preferred Securities as the Receipt certificate
surrendered.
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As a condition precedent to the registration of transfer or
exchange of any Receipt 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 Trustee or
the Registrar may establish not inconsistent with the provisions of the Trust
Agreement.
Neither the Trustee nor the Registrar shall be required (a) to
register the transfer or exchange of any Receipt certificate for a period
beginning at the opening of business ten days next preceding any selection of
Receipts to be redeemed and ending at the close of business on the day of the
mailing a notice of redemption of Receipts or (b) to transfer or exchange
Receipts called or being called for redemption in whole or in part.
11. Title to Receipts. It is a condition of the Receipt, and
every successive Holder hereof by accepting or holding the same consents and
agrees, that title to this Receipt 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 Receipt
certificate shall be registered on the books of the Trustee, the Trustee 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.
12. Reports, Inspection of Transfer Books. The Trustee shall
make available for inspection by Holders of Receipts at the Corporate Office and
at such other places as it may from time to time deem advisable during normal
business hours any reports and communications received by the Trustee as the
record holder of Preferred Securities. The Registrar shall keep books at the
corporate office for the registration of transfer of Receipts, which books at
all reasonable times will be open for inspection by the Holders of Receipts as
and to the extent provided by applicable law.
13. Supplemental Trust Agreement. The Grantor or the General
Partner may, and the 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 Trustee, for any of the following purposes:
(a) to evidence the succession of another partnership, corporation or other
entity 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 (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
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the Grantor or the General Partner; or (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 66-2/3% of the then outstanding Receipts.
14. Governing Law. The Trust Agreement and this Receipt 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. Receipt Non-Assessable and Fully Paid. Holders of Receipts
shall not be personally liable for obligations of the Trust, the interest in the
Trust represented by the Receipts shall be non-assessable for any losses or
expenses of the Trust or for any reason whatsoever and the Receipts upon
delivery thereof by the Trustee pursuant to the Trust Agreement are and shall be
deemed fully paid.
16. Liability of Holders of Receipts. Holders of Receipts
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 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 Receipt certificate shall not be entitled to any benefits
under the Trust Agreement or be valid or obligatory for any purpose unless this
Receipt certificate shall have been executed manually or, if a Registrar for the
Receipts (other than the Trustee) shall have been appointed, by facsimile
signature of a duly authorized signatory of the Trustee and, if executed by
facsimile signature of the Trustee, shall have been countersigned manually by
such Registrar by the signature of a duly authorized signatory.
THE TRUSTEE IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY
PREFERRED SECURITIES. THE 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 TRUSTEE MAKES NO
WARRANTIES OR
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REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF PREFERRED
SECURITIES OR OF RECEIPTS; AS TO THE VALIDITY OR SUFFICIENCY OF THE TRUST
AGREEMENT; AS TO THE VALUE OF RECEIPTS OR AS TO ANY RIGHT, TITLE OR INTEREST OF
THE HOLDERS OF RECEIPTS IN AND TO RECEIPTS.
Dated: June ___, 1997
First Union Trust Company, National
Association, as Trustee,
By: ___________________________________
Name:
Title:
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[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto ____________________ the within Receipt and all rights and
interests represented by the Receipts evidenced thereby, and hereby irrevocably
constitutes and appoints ____________________ attorney, to transfer the same on
the books of the within-named 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 Receipt in
every particular, without
alteration or enlargement, or
any change whatever.
Signature Guarantee:
______________________________
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