Exhibit 4-D
GUARANTEE AGREEMENT
Between
Delmarva Power & Light Company
(as Guarantor)
and
Wilmington Trust Company
(as Trustee)
dated as of
_____________, 1996
TABLE OF CONTENTS
-----------------
Page
-----
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . 1
SECTION 1.01 Definitions . . . . . . . . . . . . 1
ARTICLE II TRUST INDENTURE ACT . . . . . . . . . . . . 3
SECTION 2.01 Conflict with Trust Indenture Act . 3
SECTION 2.02 Lists of Holders of Preferred
Securities . . . . . . . . . . . . . 3
SECTION 2.03 Reports by the Guarantee Trustee . . 3
SECTION 2.04 Periodic Reports to Guarantee
Trustee. . . . . . . . . . . . . . . 4
SECTION 2.06 Events of Default; Waiver . . . . . 4
SECTION 2.07 Event of Default; Notice . . . . . . 4
ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE
TRUSTEE . . . . . . . . . . . . . . . . . . 5
SECTION 3.01 Powers and Duties of the Guarantee
Trustee. . . . . . . . . . . . . . . 5
SECTION 3.02 Certain Rights of Guarantee
Trustee. . . . . . . . . . . . . . . 6
ARTICLE IV GUARANTEE TRUSTEE . . . . . . . . . . . . 8
SECTION 4.01 Guarantee Trustee; Eligibility . . . 8
SECTION 4.02 Compensation and Reimbursement . . . 9
SECTION 4.03 Appointment, Removal and
Resignation of Guarantee Trustee . . 10
ARTICLE V GUARANTEE . . . . . . . . . . . . . . . . . . 10
SECTION 5.01 Guarantee . . . . . . . . . . . . . 10
SECTION 5.02 Waiver of Notice and Demand . . . . 11
SECTION 5.03 Obligations Not Affected . . . . . . 11
SECTION 5.04 Rights of Holders . . . . . . . . . 12
SECTION 5.05 Guarantee of Payment . . . . . . . . 12
SECTION 5.06 Subrogation . . . . . . . . . . . . 12
SECTION 5.07 Independent Obligations . . . . . . 12
ARTICLE VI SUBORDINATION . . . . . . . . . . . . . . 13
SECTION 6.01 Subordination . . . . . . . . . . . 13
ARTICLE VII TERMINATION . . . . . . . . . . . . . . . 13
SECTION 7.01 Termination . . . . . . . . . . . . 13
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . 13
SECTION 8.01 Successors and Assigns . . . . . . . 13
SECTION 8.02 Amendments . . . . . . . . . . . . . 13
SECTION 8.03 Notices . . . . . . . . . . . . . . 14
SECTION 8.04 Benefit . . . . . . . . . . . . . . 15
SECTION 8.05 Interpretation . . . . . . . . . . . 15
SECTION 8.06 Governing Law . . . . . . . . . . . 15
CROSS-REFERENCE TABLE
---------------------
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
------------------ ---------
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . 4.01(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . 4.01(c), 2.08
310(c) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(b)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(b)
313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
314(b) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
314(d) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . 1.01, 2.05,
3.02
314(f) . . . . . . . . . . . . . . . . . . . . . . . 2.01, 3.02
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . 3.01(c)
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.07
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . 3.01(c)
316(a) . . . . . . . . . . . . . . . . . . . . . . 5.04(a), 2.06
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
317(a) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
317(b) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.01(b)
318(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
318(c) . . . . . . . . . . . . . . . . . . . . . . . . . 2.01(a)
------------
* This Cross-Reference Table does not constitute part of the
Guarantee Agreement and shall not affect the interpretation
of any of its terms or provisions.
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated
as of ______________, 1996, is executed and delivered by Delmarva
Power & Light Company, a Delaware and Virginia corporation (the
"Guarantor"), and Wilmington Trust Company, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined
herein) of Delmarva Power Financing I, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust
Agreement (the "Trust Agreement"), dated as of ______________,
1996, between the Trustees of the Issuer named therein and
Delmarva Power & Light Company, as Depositor, the Issuer is
issuing as of the date hereof $______________ aggregate
liquidation amount of its ____% Trust Preferred Capital
Securities (the "Preferred Securities") representing preferred
undivided beneficial ownership interests in the Issuer and having
the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities are to be issued for
sale by the Issuer and the proceeds are to be invested in
$______________ principal amount of Debentures (as defined in the
Trust Agreement); and
WHEREAS, in order to enhance the value of the Preferred
Securities, the Guarantor desires to irrevocably and
unconditionally agree, to the extent set forth herein, to pay to
the Holders the Guarantee Payments (as defined herein) and to
make certain other payments on the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the purchase of
Debentures, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders from time to
time.
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Guarantee
Agreement, the terms set forth below shall, unless the context
otherwise requires, have the following meanings. Capitalized or
otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust
Agreement as in effect on the date hereof.
"Event of Default" means a default by the Guarantor on
any of its payment obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments
or distributions, without duplication, with respect to the
Preferred Securities, to the extent not paid or made by or on
behalf of the Issuer: (a) any accrued and unpaid Distributions
that are required to be paid on such Preferred Securities but
only if and to the extent that the Property Trustee has available
in the Payment Account funds sufficient to make such payment, (b)
the Redemption Price with respect to the Preferred Securities
called for redemption by the Issuer but only if and to the extent
that the Property Trustee has available in the Payment Account
funds sufficient to make such payment, (c) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer
(unless the Debentures are distributed to the Holders of such
Preferred Securities), the lesser of (i) the aggregate of the
Liquidation Amount and all accrued and unpaid Distributions on
the Preferred Securities to the date of payment, and (ii) the
amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer (the
"Liquidation Distribution").
"Guarantee Trustee" means Wilmington Trust Company
until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee
Agreement and thereafter means each such Successor Guarantee
Trustee.
"Holder" shall mean any Person in whose name any
Preferred Securities are registered in the Securities Registrar;
provided, however, that, in determining whether the Holders of
the requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indenture" means the Indenture dated as of
______________, 1996, between the Guarantor (the "Debenture
Issuer") and Wilmington Trust Company, as trustee, pursuant to
which the Debentures are issued.
"Officer's Certificate" means a certificate signed by
the Chairman of the Board, the President, a Vice President, the
Treasurer or an Assistant Treasurer of the Guarantor, and
delivered to the Guarantee Trustee. Any Officer's Certificate
delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that the officer signing the Officer's
Certificate has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by such officer in
rendering the Officer's Certificate;
(c) a statement that such officer has made such
examination or investigation as, in such officer's opinion,
is necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of such
officer, such condition or covenant has been complied with.
"Responsible Officer" means, with respect to the
Guarantee Trustee, any officer of the Guarantee Trustee assigned
by the Guarantee Trustee to administer its corporate trust
matters.
"Successor Guarantee Trustee" means a successor
Guarantee Trustee possessing the qualifications to act as
Guarantee Trustee under Section 4.01.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Guarantee Agreement limits,
qualifies or conflicts with another provision hereof which is
required or deemed to be included in this Guarantee Agreement by,
or is otherwise governed by, any of the provisions of the Trust
Indenture Act, such other provision shall control; and if any
provision hereof otherwise conflicts with the Trust Indenture
Act, the Trust Indenture Act shall control.
SECTION 2.02 LISTS OF HOLDERS OF PREFERRED
SECURITIES.
(a) Semiannually, not later than June 1 and December 1
in each year, commencing December 1, 1996, and at such other
times as the Guarantee Trustee may request in writing, the
Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee information as to the names and addresses of the Holders,
and the Guarantee Trustee shall preserve such information and
similar information received by it in any other capacity and
afford to the Holders access to information received by it in any
other capacity and afford to the Holders access to information so
preserved by it, all to such extent, if any, and in such manner
as shall be required by the Trust Indenture Act.
(b) The Guarantee Trustee shall comply with its
obligations under Section 311(a) of the Trust Indenture Act,
subject to the provisions of Section 311(b) and Section 312(b) of
the Trust Indenture Act.
SECTION 2.03 REPORTS BY THE GUARANTEE TRUSTEE. (a)
The Guarantee Trustee shall transmit to Holders such reports
concerning the Guarantee Trustee and its actions under this
Guarantee Agreement as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant
thereto. Such of those reports as are required to be transmitted
by the Guarantee Trustee pursuant to Section 313(a) of the Trust
Indenture Act shall be so transmitted within 60 days after
December 31 of each year, commencing December 31, 1996.
(b) A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Guarantee Trustee
with each stock exchange upon which the Preferred Securities are
listed, with the Commission and with the Guarantor. The
Guarantor shall notify the Guarantee Trustee when any Preferred
Securities shall have been listed on any stock exchange.
SECTION 2.04 PERIODIC REPORTS TO GUARANTEE TRUSTEE.
The Guarantor shall provide to the Guarantee Trustee such
documents, reports, compliance certificates and information as
may be required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required thereby.
SECTION 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT. The Guarantor shall provide to the Guarantee Trustee
such evidence of compliance with any conditions precedent
provided for in this Guarantee Agreement as and to the extent
required by Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act may be
given in the form of an Officer's Certificate.
SECTION 2.06 EVENTS OF DEFAULT; WAIVER. The Holders
of a majority in liquidation amount of Outstanding Preferred
Securities may, by vote, on behalf of all of the Holders, waive
any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event
of Default or impair any right consequent thereon.
SECTION 2.07 EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall give notice of any
Event of Default hereunder to the Holders in the manner and to
the extent required to do so by the Trust Indenture Act, unless
such Event of Default shall have been cured or waived.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee Trustee
shall have received written notice of such Event of Default.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01 POWERS AND DUTIES OF THE GUARANTEE
TRUSTEE.
(a) This Guarantee Agreement shall be held by the
Guarantee Trustee for the benefit of the Holders, and the
Guarantee Trustee shall not transfer this Guarantee Agreement or
any rights hereunder to any Person except a Holder exercising his
or her rights pursuant to Section 5.04 or to a Successor
Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee.
The right, title and interest of the Guarantee Trustee shall vest
automatically in any Successor Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Guarantee Trustee.
(b) The Guarantee Trustee, prior to the occurrence of
any Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform only
such duties as are specifically set forth in this Guarantee
Agreement, and no implied covenants or obligations shall be read
into this Guarantee Agreement against the Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.06), the Guarantee Trustee shall
exercise such of the rights and powers vested in it by this
Guarantee Agreement, and use the same degree of care and skill in
its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(c) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(i) prior to the occurrence of any Event of
Default and after the curing or waiving of all such
Events of Default that may have occurred:
(A) the duties and obligations of the
Guarantee Trustee shall be determined solely by
the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties
and obligations as are specifically set forth in
this Guarantee Agreement; and
(B) in the absence of bad faith on the part
of the Guarantee Trustee, the Guarantee Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee
Agreement; provided, however, that in the case of
any such certificates or opinions that by any
provision hereof are specifically required to be
furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same
to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a
Responsible Officer of the Guarantee Trustee, unless it
shall be proved that the Guarantee Trustee or such
Responsible Officer was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken
by it in good faith in accordance with the direction of
the Holders of a Majority in liquidation amount of the
Preferred Securities relating to the time, method and
place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any
trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement
shall require the Guarantee Trustee to expend or risk
its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if the
Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability
is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such
risk or liability is not reasonably assured to it.
SECTION 3.02 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) the Guarantee Trustee may rely and shall
be fully protected in acting or refraining from acting
upon any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have
been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be
sufficiently evidenced by an Officer's Certificate;
(iii) whenever, in the administration of
this Guarantee Agreement, the Guarantee Trustee shall
deem it desirable that a matter be proved or
established before taking, suffering or omitting any
action hereunder, the Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon
an Officer's Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with
counsel of its choice, and the written advice or
opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with such
advice or opinion; such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any
of its employees; the Guarantee Trustee shall have the
right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any
court of competent jurisdiction;
(v) the Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Guarantee Agreement at the request
or direction of any Holder, unless such Holder shall
have provided to the Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable
person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by
it in complying with such request or direction,
including such reasonable advances as may be requested
by the Guarantee Trustee; provided, however, that
nothing contained in this Section 3.02(a)(v) shall be
taken to relieve the Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this
Guarantee Agreement;
(vi) the Guarantee Trustee shall not be bound
to make any investigation into the facts or matters
stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document
reasonably believed by it to be genuine, but the
Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit;
(vii) the Guarantee Trustee may execute
any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through
agents or attorneys, and the Guarantee Trustee shall
not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due
care by it hereunder;
(viii) whenever in the administration of
this Guarantee Agreement the Guarantee Trustee shall
deem it desirable to receive instructions with respect
to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders, (B) may refrain from
enforcing such remedy or right or taking such other
action until such instructions are received, and (C)
shall be protected in acting in accordance with such
instructions; and
(ix) the Guarantee Trustee shall not be
liable for any action taken, suffered or omitted to be
taken by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or
powers conferred upon it by this Guarantee.
(b) No provision of this Guarantee Agreement shall be
deemed to impose any duty or obligation on the Guarantee Trustee
to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in
which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable
law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or
authority available to the Guarantee Trustee shall be construed
to be a duty.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing
business under the laws of the United States of America
or any State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority.
If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to
above, then, for the purposes of this Section
4.01(a)(ii), 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
condition so published.
(b) If at any time the Guarantee Trustee shall cease
to be eligible to so act under Section 4.01(a), the Guarantee
Trustee shall immediately resign in the manner and with the
effect set out in Section 4.03(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Guarantee Trustee and Guarantor
shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
SECTION 4.02 COMPENSATION AND REIMBURSEMENT.
The Guarantor agrees:
(a) to pay the Guarantee Trustee from time to time
such reasonable compensation as the Guarantor and the Guarantee
Trustee shall from time to time agree in writing for all services
rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made
by the Guarantee Trustee in accordance with the provisions of
this Guarantee (including the reasonable compensation and
expenses of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence
or bad faith; and
(c) to indemnify each of the Guarantee Trustee and any
predecessor Guarantee Trustee for, and to hold it harmless from
and against, any and all loss, damage, claim, liability or
expense, including taxes (other than taxes based upon the income
of the Guarantee Trustee) incurred without negligence or bad
faith on its part, arising out of or in connection with the
acceptance of the administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance
of any its powers or duties hereunder.
As security for the performance of the obligations of
the Guarantor under this Section, the Guarantee Trustee shall
have a lien prior to the Preferred Securities upon all the
property and funds held or collected by the Guarantee Trustee as
such, except funds held in trust for the payment of principal of,
and premium (if any) or interest on, particular obligations of
the Guarantor under this Guarantee Agreement.
The provisions of this Section shall survive the
termination of this Guarantee Agreement.
SECTION 4.03 APPOINTMENT, REMOVAL AND RESIGNATION OF
GUARANTEE TRUSTEE.
(a) Subject to Section 4.03(b), unless an Event of
Default shall have occurred and be continuing, the Guarantee
Trustee may be appointed or removed without cause at any time by
the Guarantor.
(b) The Guarantee Trustee shall not be removed until a
Successor Guarantee Trustee has been appointed and has accepted
such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall
hold office until a Successor Guarantee Trustee shall have been
appointed or until its removal or resignation. The Guarantee
Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Guarantee
Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section
4.03 within 60 days after delivery to the Guarantor of an
instrument of resignation, the resigning Guarantee Trustee may
petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
(e) The Guarantor shall give notice of each
resignation and each removal of the Guarantee Trustee and each
appointment of a successor Guarantee Trustee to all Holders in
the manner provided in Section 8.03 hereof. Each notice shall
include the name of the successor Guarantee Trustee and the
address of its Corporate Trust Office.
ARTICLE V
GUARANTEE
SECTION 5.01 GUARANTEE. The Guarantor irrevocably
and unconditionally agrees to pay in full to the Holders the
Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
SECTION 5.02 WAIVER OF NOTICE AND DEMAND. The
Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a
proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices
and demands.
SECTION 5.03 OBLIGATIONS NOT AFFECTED. The
obligation of the Guarantor to make the Guarantee Payments under
this Guarantee Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of
any express or implied agreement, covenant, term or
condition relating to the Preferred Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the
Issuer of all or any portion of the Distributions,
Redemption Price, Liquidation Distribution or any other sums
payable under the terms of the Preferred Securities or the
extension of time for the performance of any other
obligation under, arising out of, or in connection with, the
Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures
permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence
on the part of the Holders to enforce, assert or exercise
any right, privilege, power or remedy conferred on the
Holders pursuant to the terms of the Preferred Securities,
or any action on the part of the Issuer granting indulgence
or extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership,
insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or
defense of a guarantor, it being the intent of this Section
5.03 that the obligations of the Guarantor hereunder shall
be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of
any of the foregoing.
SECTION 5.04 RIGHTS OF HOLDERS. The Guarantor
expressly acknowledges that: (a) this Guarantee Agreement will
be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (b) the Guarantee Trustee has the right
to enforce this Guarantee Agreement on behalf of the Holders; (c)
the Holders of a majority in liquidation amount of the
Outstanding Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of this
Guarantee Agreement or exercising any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and
(d) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee
Agreement without first instituting a legal proceeding against
the Issuer or any other person or entity.
SECTION 5.05 GUARANTEE OF PAYMENT. This Guarantee
Agreement creates a guarantee of payment and not of collection.
This Guarantee Agreement will not be discharged except by payment
of the Guarantee Payments in full (without duplication).
SECTION 5.06 SUBROGATION. The Guarantor shall be
subrogated to all (if any) rights of the Holders against the
Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement; provided, however, that
the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise
any rights which it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a
result of payment under this Guarantee Agreement, if, at the time
of any such payment, any amounts of Guarantee Payments are due
and unpaid under this Guarantee Agreement. If any amount shall
be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders
and to pay over such amount to the Holders.
SECTION 5.07 INDEPENDENT OBLIGATIONS. The Guarantor
acknowledges that its obligations hereunder are independent of
the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal
and as debtor hereunder to make Guarantee Payments pursuant to
the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through
(g), inclusive, of Section 5.03.
ARTICLE VI
SUBORDINATION
SECTION 6.01 SUBORDINATION. This Guarantee Agreement
will constitute an unsecured obligation of the Guarantor and will
rank subordinate and junior in right of payment to all Senior
Indebtedness of the Guarantor to the same extent as the
Debentures.
ARTICLE VII
TERMINATION
SECTION 7.01 TERMINATION. This Guarantee Agreement
shall terminate and be of no further force and effect upon: (a)
full payment of the Redemption Price of all Preferred Securities,
(b) the distribution of Debentures to Holders in exchange for all
of the Preferred Securities or (c) full payment of the amounts
payable in accordance with the Trust Agreement upon liquidation
of the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must restore payment
of any sums paid with respect to the Preferred Securities or
under this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 SUCCESSORS AND ASSIGNS. All guarantees
and agreements contained in this Guarantee Agreement shall bind
the successors, assigns, receivers, trustees and representatives
of the Guarantor and shall inure to the benefit of the Holders of
the Preferred Securities then outstanding. Except in connection
with a consolidation, merger or sale involving the Guarantor that
is permitted under Article Eleven of the Indenture, the Guarantor
shall not assign its obligations hereunder.
SECTION 8.02 AMENDMENTS. This Guarantee Agreement
may be amended only by an instrument in writing entered into by
the Guarantor and the Guarantee Trustee. Except with respect to
any changes which do not materially adversely affect the rights
of Holders (in which case no consent of Holders will be
required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than 66 2/3% of the
aggregate liquidation amount of all of the outstanding Preferred
Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of Holders shall apply to the giving of such
approval. Nothing herein contained shall be deemed to require
that the Guarantee Trustee enter into any amendment of this
Guarantee Agreement.
SECTION 8.03 NOTICES. Any notice, request or other
communication required or permitted to be given hereunder shall
be in writing, duly signed by the party giving such notice, and
delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set
forth below or such other address as the Guarantor may give
notice of to the Holders of the Preferred Securities:
Delmarva Power & Light Company
800 King Street
Wilmington, DE 19899
Facsimile No: (302) 429-3367
Attention: Treasurer
(b) if given to the Issuer, in care of the
Administrative Trustees, at the Issuer's (and the
Administrative Trustees') address set forth below or such
other address as the Administrative Trustees on behalf of
the Issuer may give notice of to the Holders:
Delmarva Power Financing I
c/o Treasury Department, Delmarva Power &
Light Company
800 King Street
Wilmington, DE 19899
Facsimile No: (302) 429-3367
Attention: Administrative Trustees
(c) if given to the Guarantee Trustee, to the address
set forth below or such other address as the Guarantee
Trustee may give notice of to the Holders of the Preferred
Securities:
Wilmington Trust Company
1100 North Market Street
Wilmington, DE 19890
Facsimile No: (302) 651-8882
Attention: Corporate Trust Administration
(d) if given to any Holder, at the address set forth
on the books and records of the Issuer.
All notices hereunder shall be deemed to have been
given when received in person, telecopied with receipt confirmed,
or mailed by first class mail, postage prepaid except that if a
notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 8.04 BENEFIT. This Guarantee Agreement is
solely for the benefit of the Holders and, subject to Section
3.01(a), is not separately transferable from the Preferred
Securities.
SECTION 8.05 INTERPRETATION. In this Guarantee
Agreement, unless the context otherwise requires:
(a) a term defined anywhere in this Guarantee
Agreement has the same meaning throughout;
(b) all references to "the Guarantee Agreement" or
"this Guarantee Agreement" are to this Guarantee Agreement
as modified, supplemented or amended from time to time;
(c) all references in this Guarantee Agreement to
Articles and Sections are to Articles and Sections of this
Guarantee Agreement unless otherwise specified;
(d) a term defined in the Trust Indenture Act has the
same meaning when used in this Guarantee Agreement unless
otherwise defined in this Guarantee Agreement or unless the
context otherwise requires;
(e) a reference to the singular includes the plural
and vice versa; and
(f) the masculine, feminine or neuter genders used
herein shall include the masculine, feminine and neuter
genders.
SECTION 8.06 GOVERNING LAW. This Guarantee Agreement
shall be governed by and construed and interpreted in accordance
with the laws of the State of New York (without regard to
conflict of laws principles).
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and
year first above written.
Delmarva Power & Light Company
By:
----------------------------------
Name:
Title:
Wilmington Trust Company,
as Guarantee Trustee
By:
----------------------------------
Name:
Title: