PECO ENERGY COMPANY
AND
MERIDIAN TRUST COMPANY, AS TRUSTEE
INDENTURE
DATED AS OF _________________ BY AND BETWEEN
PROVIDING FOR THE ISSUANCE OF
SUBORDINATED DEBENTURES IN SERIES
AND FOR
_% SUBORDINATED DEBENTURES, SERIES A
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.. . . . . . . . . . . . . . . . . . 2
SECTION 1.02 Other Definitions.. . . . . . . . . . . . . . . 7
SECTION 1.03 Incorporation by Reference of Trust Indenture
Act . . . . . . . . . . . . . . . . . . . . . 7
SECTION 1.04 Rules of Construction.. . . . . . . . . . . . . 8
SECTION 1.05 Acts of Holders.. . . . . . . . . . . . . . . . 8
ARTICLE 2 THE DEBENTURES; THE SERIES A DEBENTURES
SECTION 2.01 Issue of Debentures Generally.. . . . . . . . . 9
SECTION 2.02 Form of the Series A Securities;
Denominations.. . . . . . . . . . . . . . . . 11
SECTION 2.03 Payment of Principal and Interest.. . . . . . . 11
SECTION 2.04 Execution and Authentication. . . . . . . . . . 12
SECTION 2.05 Registrar and Paying Agent. . . . . . . . . . . 12
SECTION 2.06 Paying Agent to Hold Money in Trust.. . . . . . 13
SECTION 2.07 Debentureholder Lists.. . . . . . . . . . . . . 14
SECTION 2.08 Transfer and Exchange.. . . . . . . . . . . . . 14
SECTION 2.09 Replacement Debentures. . . . . . . . . . . . . 15
SECTION 2.10 Outstanding Debentures; Determinations of
Holders' Action.. . . . . . . . . . . . . . . 16
SECTION 2.11 Temporary Debentures. . . . . . . . . . . . . . 16
SECTION 2.12 Cancellation. . . . . . . . . . . . . . . . . . 17
SECTION 2.13 Defaulted Interest. . . . . . . . . . . . . . . 17
ARTICLE 3 REDEMPTION
SECTION 3.01 Redemption; Notice to Trustee.. . . . . . . . . 18
SECTION 3.02 Selection of Debentures to be Redeemed. . . . . 18
SECTION 3.03 Notice of Redemption. . . . . . . . . . . . . . 18
SECTION 3.04 Effect of Notice of Redemption. . . . . . . . . 19
SECTION 3.05 Deposit of Redemption Price.. . . . . . . . . . 19
SECTION 3.06 Debentures Redeemed in Part . . . . . . . . . . 20
ARTICLE 4 COVENANTS
SECTION 4.01 Payment of Debentures . . . . . . . . . . . . . 20
SECTION 4.02 Prohibition Against Dividends, etc. During an
Event of Default or an Extension Period . . . 21
SECTION 4.03 SEC Reports . . . . . . . . . . . . . . . . . . 21
SECTION 4.04 Compliance Certificates . . . . . . . . . . . . 21
SECTION 4.05 Relationship with PECO Energy Capital . . . . . 22
SECTION 4.06 Further Instruments and Acts. . . . . . . . . . 22
i
SECTION 4.07 Payments for Consents . . . . . . . . . . . . . 22
ARTICLE 5 SUCCESSOR CORPORATION
SECTION 5.01 When the Company May Merge, Etc . . . . . . . . 23
ARTICLE 6 DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default . . . . . . . . . . . . . . . 24
SECTION 6.02 Acceleration. . . . . . . . . . . . . . . . . . 25
SECTION 6.03 Other Remedies . . . . . . . . . . . . . . . . 26
SECTION 6.04 Waiver of Past Defaults . . . . . . . . . . . . 26
SECTION 6.05 Control by Majority or the Special
Representatives . . . . . . . . . . . . . . . 26
SECTION 6.06 Limitation on Suits . . . . . . . . . . . . . . 27
SECTION 6.07 Rights of Holders to Receive Payment. . . . . . 27
SECTION 6.08 Collection Suit by the Trustee. . . . . . . . . 27
SECTION 6.09 The Trustee May File Proofs of Claim. . . . . . 28
SECTION 6.10 Priorities. . . . . . . . . . . . . . . . . . . 28
SECTION 6.11 Undertaking for Costs. . . . . . . . . . . . . . 29
SECTION 6.12 Waiver of Stay, Extension or Usury Laws . . . . 29
ARTICLE 7 THE TRUSTEE
SECTION 7.01 Duties of the Trustee . . . . . . . . . . . . . 30
SECTION 7.02 Rights of the Trustee . . . . . . . . . . . . . 31
SECTION 7.03 Individual Rights of the Trustee. . . . . . . . 31
SECTION 7.04 The Trustee's Disclaimer. . . . . . . . . . . . 32
SECTION 7.05 Notice of Defaults. . . . . . . . . . . . . . . 32
SECTION 7.06 Reports by Trustee to Holders . . . . . . . . . 32
SECTION 7.07 Compensation and Indemnity. . . . . . . . . . . 33
SECTION 7.08 Replacement of Trustee. . . . . . . . . . . . . 33
SECTION 7.09 Successor Trustee by Merger . . . . . . . . . . 34
SECTION 7.10 Eligibility; Disqualification . . . . . . . . . 35
SECTION 7.11 Preferential Collection of Claims Against the
Company . . . . . . . . . . . . . . . . . . . 35
ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED
MONEYS
SECTION 8.01 Satisfaction and Discharge of Indenture . . . . 35
SECTION 8.02 Application by Trustee of Funds Deposited for
Payment of Debentures . . . . . . . . . . . . 36
SECTION 8.03 Repayment of Moneys Held by Paying Agent. . . . 37
SECTION 8.04 Return of Moneys Held by the Trustee and
Paying Agent Unclaimed for Three Years. . . . 37
ARTICLE 9 AMENDMENTS
SECTION 9.01 Without Consent of Holders. . . . . . . . . . . 37
SECTION 9.02 With Consent of Holders . . . . . . . . . . . . 38
ii
SECTION 9.03 Compliance with Trust Indenture Act . . . . . . 39
SECTION 9.04 Revocation and Effect Of Consents, Waivers
and Actions . . . . . . . . . . . . . . . . . 39
SECTION 9.05 Notation on or Exchange of Debentures . . . . . 40
SECTION 9.06 Trustee to Sign Supplemental Indentures . . . . 40
SECTION 9.07 Effect of Supplemental Indentures . . . . . . . 40
ARTICLE 10 SUBORDINATION
SECTION 10.01 Debentures Subordinated to Senior
Indebtedness. . . . . . . . . . . . . . . . . 40
SECTION 10.02 Priority and Payment of Proceeds in Certain
Events; Remedies Standstill . . . . . . . . . 41
SECTION 10.03 Payments which May Be Made Prior to Notice. . . 42
SECTION 10.04 Rights of Holders of Senior Indebtedness Not
to Be Impaired. . . . . . . . . . . . . . . . 42
SECTION 10.05 Trustee May Take Action to Effectuate
Subordination . . . . . . . . . . . . . . . . 43
SECTION 10.06 Subrogation . . . . . . . . . . . . . . . . . . 43
SECTION 10.07 Obligations of Company Unconditional;
Reinstatement . . . . . . . . . . . . . . . . 44
SECTION 10.08 Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice . . . . . . . 44
SECTION 10.09 Right of Trustee to Hold Senior Indebtedness. . 45
ARTICLE 11 MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls. . . . . . . . . . 45
SECTION 11.02 Notices . . . . . . . . . . . . . . . . . . . . 46
SECTION 11.03 Communication by Holders with Other Holders . . 46
SECTION 11.04 Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . 47
SECTION 11.05 Statements Required in Certificate or
Opinion . . . . . . . . . . . . . . . . . . . 47
SECTION 11.06 Severability Clause . . . . . . . . . . . . . . 48
SECTION 11.07 Rules by Trustee, Paying Agent and Registrar. . 48
SECTION 11.08 Legal Holidays. . . . . . . . . . . . . . . . . 48
SECTION 11.09 Governing Law . . . . . . . . . . . . . . . . . 48
SECTION 11.10 No Recourse Against Others. . . . . . . . . . . 48
SECTION 11.11 Successors. . . . . . . . . . . . . . . . . . . 49
SECTION 11.12 Multiple Original Copies of this Indenture. . . 49
SECTION 11.13 No Adverse Interpretation of Other
Agreements. . . . . . . . . . . . . . . . . . 49
SECTION 11.14 Table of Contents; Headings, Etc. . . . . . . . 49
SECTION 11.15 Benefits of the Indenture . . . . . . . . . . . 49
EXHIBIT A - Form of Series A Debenture . . . . . . . . . . . .A-1
iii
CROSS-REFERENCE TABLE
of Provisions of the Indenture
Required by the Trust Indenture Act of 1939
TRUST INDENTURE PROVISION OF
ACT SECTION INDENTURE
- - - - --------------- ------------
Section 310(a)(1) 7.10
(a)(2) 7.10
(a)(3) Not Applicable
(a)(4) Not Applicable
(a)(5) Not Applicable
(b) 7.08; 7.10; 11.01
(c) Not Applicable
Section 311(a) 7.11
(b) 7.11
(c) Not Applicable
Section 312(a) 2.07
(b) 11.03
(c) 11.03
Section 313(a) 7.06
(b)(1) Not Applicable
(b)(2) 7.06
(c) 7.06; 11.02
(d) 7.06
Section 314(a) 4.03; 11.02
(b) Not Applicable
(c)(1) 2.02; 11.04
(c)(2) 2.02; 11.04
(c)(3) Not Applicable
(d) Not Applicable
(e) 11.05
(f) Not Applicable
Section 315(a) 7.01(2)
(b) 7.05; 11.02
(c) 7.01(1)
(d) 7.01(3)
(e) 6.11
Section 316(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) Not Applicable
(a)(last sentence) 2.10
(b) 6.07
Section 317(a)(1) 6.08
(a)(2) 6.09
(b) 2.06
Section 318(a) 11.01
___________________
Note: This Cross-Reference Table shall not, for any purpose, be
deemed to be part of the Indenture.
iv
INDENTURE, dated as of __________________, by and
between PECO Energy Company, a Pennsylvania corporation (the
"Company"), and Meridian Trust Company, a Pennsylvania trust
company, as trustee (the "Trustee).
WHEREAS, the Company has formed a wholly owned
subsidiary, PECO Energy Capital Corp., which is the general
partner of PECO Energy Capital, L.P., a Delaware limited
partnership, which intends to issue in series from time to time
its limited partner interests and to loan the proceeds thereof,
together with the investment by PECO Energy Capital Corp. in PECO
Energy Capital, L.P., to the Company.
WHEREAS, in order to evidence its intention to make
such loans and to accept the Debentures as evidence of such
loans, and its approval of the terms of the Series A Debentures
(as hereinafter defined), PECO Energy Capital, L.P. has joined in
this Indenture.
WHEREAS, the Company has authorized the issuance of the
Series A Debentures to evidence its obligations with respect to a
loan from PECO Energy Capital, L.P. of the proceeds of a series
of its preferred limited partner interests designated __%
Cumulative Monthly Income Preferred Securities, Series A and the
related investment by PECO Energy Capital Corp. in PECO Energy
Capital, L.P., and to provide therefor, the Company has duly
authorized the execution and delivery of this Indenture, all
things necessary to make the Series A Debentures when duly issued
and executed by the Company and authenticated and delivered
hereunder, the valid obligations of the Company, and to make this
Indenture a valid and binding agreement of the Company, in
accordance with its terms, have been done.
NOW THEREFORE:
The Company and the Trustee, intending to be legally
bound hereby, agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the
securities issued hereunder, including the Company's __%
Subordinated Debentures, Series A (the "Series A Debentures"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 DEFINITIONS.
------------
"Additional Interest", with respect to the Series A
Debentures, means an amount equal to and payable at the same time
as, any Additional Amounts payable on the Series A Preferred
Securities as defined in the action pursuant to the Limited
Partnership Agreement creating the Series A Preferred Securities
plus amounts, if any, which PECO Energy Capital would be required
to pay as taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the
United States, or any other taxing authority, with respect to the
Series A Debentures. With respect to any other series of
Debentures, "Additional Amounts" shall have the meaning set forth
in the supplemental indenture creating such series.
"Affiliate" of any specified Person means any other
Person, directly or indirectly, controlling or controlled by or
under direct or indirect common control with such specified
Person. When used with respect to any Person, "control" 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.
"Board of Directors" means the Board of Directors of
the Company or any committee thereof duly authorized to act on
behalf of such Board.
"Business Day" means any day that is not a Saturday, a
Sunday or a day on which banking institutions in The City of New
York or Delaware are authorized or required to close.
"Capital Lease Obligations" of a Person means any
obligation which is required to be classified and accounted for
as a capital lease on the face of a balance sheet of such Person
prepared in accordance with GAAP.
"Capital Stock" means any and all shares, interests,
rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) corporate
stock, including any Preferred Stock.
"Debentureholder" or "Holder" means a Person in whose
name a Debenture is registered on the Registrar's books.
"Debentures" shall mean any of the securities of any
series issued, authenticated and delivered under this Indenture.
2
"Default" means any event which is, or after notice or
passage of time, or both, would be, an Event of Default pursuant
to Section 6.01 hereof.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Extension Period" means a period, up to 60 consecutive
months, in which the Company elects to extend the interest
payment period on the Debentures pursuant to Section 4.01(b)
hereof; provided that no Extension Period shall extend beyond the
Stated Maturity date or Redemption Date of any series of
Subordinated Debentures.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board.
"General Partner" means PECO Energy Capital Corp., a
Delaware corporation and a wholly owned subsidiary of PECO Energy
Company, as the general partner of PECO Energy Capital, L.P., a
Delaware limited partnership, or any successor thereto that
becomes a general partner of PECO Energy Capital pursuant to the
Limited Partnership Agreement.
"Guarantee Agreement" means that certain payment and
guarantee agreement issued by PECO Energy Company with respect to
a series of Securities, to irrevocably and nonconditionally agree
to pay such Guarantee Payments (as defined in the Guarantee
Agreement) to the holders of the series of Preferred Securities
issued concurrently therewith.
"Holder" or "Debentureholder" means any Person in whose
name a Debenture is registered on the Registrar's books.
"Indebtedness" means without duplication, (i) the
principal of and premium (if any) in respect of (A) indebtedness
of the Company for money borrowed and (B) indebtedness evidenced
by securities, debentures, bonds or other similar instruments
issued by the Company; (ii) all Capital Lease Obligations of the
Company; (iii) all obligations of the Company issued or assumed
as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company
under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) all
obligations of the Company for the reimbursement of any obligor
on any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction (other than obligations
3
with respect to letters of credit securing obligations (other
than obligations described in (i) through (iii) above) entered
into in the ordinary course of business of the Company to the
extent such letters of credit are not drawn upon or, if and to
the extent drawn upon, such drawing is reimbursed no later than
the third Business Day following receipt by the Company of a
demand for reimbursement following payment on the letter of
credit); (v) all obligations of the type referred to in clauses
(i) through (iv) of other Persons and all dividends of other
Persons (other than the Preferred Securities) for the payment of
which, in either case, the Company is responsible or liable as
obligor, guarantor or otherwise; and (vi) all obligations of the
type referred to in clauses (i) through (v) of other Persons
secured by any lien on any property or asset of the Company
(whether or not such obligation is assumed by the Company), the
amount of such obligation being deemed to be the lesser of the
value of such property or assets or the amount of the obligation
so secured; provided, however, that Indebtedness will not include
endorsements of negotiable instruments for collection in the
ordinary course of business.
"Indenture" means this indenture, as amended or
supplemented from time to time in accordance with the terms
hereof, including the provisions of the TIA that are deemed to be
a part hereof.
"Issue Date", with respect to a series of Debentures,
means the date on which the Debentures of such series are
originally issued.
"Limited Partnership Agreement" means the Amended and
Restated Limited Partnership Agreement of PECO Energy Capital,
L.P. dated __________, 1994, as it may be amended from time to
time.
"Officer" means, with respect to any corporation, the
Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer, Assistant Treasurer
or the Secretary of such corporation.
"Officer's Certificate" means a written certificate
containing the applicable information specified in Sections 11.04
and 11.05 hereof, signed in the name of the Company by any one of
its Officers, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion containing
the applicable information specified in Sections 11.04 and 11.05
hereof, by legal counsel who is reasonably acceptable to the
Trustee.
4
"PECO Energy Capital" means PECO Energy Capital, L.P.,
a Delaware limited partnership.
"Person" means any individual, corporation,
partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Securities" means the limited partner
interests issued form time to time in series by PECO Energy
Capital.
"Record date", with respect to any series of the
Debentures, means the date set to determine the holders of such
series entitled to payment of interest or principal or to vote,
consent, make a request or exercise any other right associated
with such series.
"Redemption Date" or "redemption date", with respect to
any Debenture to be redeemed, means the date specified for the
redemption of such Debenture in accordance with the terms thereof
and Article 3 of this Indenture.
"Redemption Price" or "redemption price", with respect
to any Debenture to be redeemed, means the price at which it is
to be redeemed pursuant to this Indenture and such Debenture.
"Regular record date", with respect to an interest
payment on the Debentures of a series, means the date set forth
in paragraph 2 of the Debentures of such series for the
determination of Holders entitled to receive payment of interest
on the next succeeding interest payment date.
"SEC" or "Commission" means the Securities and Exchange
Commission.
"Securities Act" means the Securities Act of 1933, as
amended.
"Senior Indebtedness" means all Indebtedness, except
for Indebtedness that is by its terms subordinated to or pari
passu with the Debentures. Notwithstanding anything to the
contrary in the foregoing, Senior Indebtedness shall not include
any Indebtedness between or among the Company and any Affiliates.
"Series A Debentures" means any of the Company's __%
Subordinated Debentures, Series A issued under this Indenture.
5
"Special Representative" means a special representative
appointed by the holders of the Preferred Securities pursuant to
Section 13.02(d) of the Limited Partnership Agreement.
"Stated Maturity", with respect to any Debenture,
means, the date specified for the Debentures as the fixed date on
which the principal of the Debentures is due and payable.
"Subsidiary" means any corporation, association,
partnership or other business entity of which more than 50% of
the total voting power of shares of Capital Stock or other
interests (including partnership interests) entitled (without
regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by (i) the
Company, (ii) the Company and one or more Subsidiaries, or (iii)
one or more Subsidiaries.
"TIA" means the Trust Indenture Act of 1939, as amended
and as in effect on the date of this Indenture; provided,
however, that if the TIA is amended after such date, TIA means,
to the extent required by any such amendment, the TIA as so
amended.
"Trust Officer", when used with respect to the Trustee,
means the chairman or vice-chairman of the Board of Directors,
the chairman or vice-chairman of the executive committee of the
Board of Directors, the President, any vice president, any
assistant vice president, the secretary, any assistant secretary,
the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any account officer or assistant account
officer, the controller and any assistant controller or any other
officer of the Trustee customarily performing functions similar
to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Trustee" means the party named as the "Trustee" in the
first paragraph of this Indenture until a successor replaces it
pursuant to the applicable provisions of this Indenture and,
thereafter, shall mean such successor.
"U.S. Government Obligations" means direct obligations
(or certificates representing an ownership interest in such
obligations) of the United States of America (including any
agency or instrumentality thereof) for the payment of which the
full faith and credit of the United States of America is pledged
and which are not callable at the issuer's option.
6
"Voting Stock" means, with respect to a corporation,
all classes of Capital Stock then outstanding of such corporation
normally entitled to vote in elections of directors.
"Wholly Owned Subsidiary" means a Subsidiary all the
Capital Stock of which (other than directors' qualifying shares)
is owned by the Company or another Wholly Owned Subsidiary.
SECTION 1.02 OTHER DEFINITIONS.
------------------
TERM DEFINED IN SECTION
---- ------------------
"Act" . . . . . . . . . . . . . . . . . . 1.05
"Bankruptcy Law" . . . . . . . . . . . . 6.01
"Custodian" . . . . . . . . . . . . . . . 6.01
"Event of Default". . . . . . . . . . . . 6.01
"Legal Holiday" . . . . . . . . . . . . . 11.08
"Notice of Default" . . . . . . . . . . . 6.01
"Paying Agent" . . . . . . . . . . . . . 2.05
"Register" . . . . . . . . . . . . . . . 2.05
"Registrar" . . . . . . . . . . . . . . . 2.05
"Successor" . . . . . . . . . . . . . . . 5.01
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
--------------------------------------------------
Whenever this Indenture refers to a provision of the
TIA, such provision is incorporated by reference in and made a
part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Debentures.
"indenture security holder" means a Debentureholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means
the Trustee.
"obligor" on the indenture securities means the Company
and any other obligor on the Debentures.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by SEC rule have the meanings assigned to them by such
definitions.
7
SECTION 1.04 RULES OF CONSTRUCTION.
----------------------
Unless the context otherwise requires:
(1) A term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including, without limitation;
(5) words in the singular include the plural, and
words in the plural include the singular; and
(6) "herein," "hereof" and other words of similar
import refer to this Indenture as a whole and not
to any particular Article, Section or other
subdivision.
SECTION 1.05. ACTS OF HOLDERS.
----------------
(1) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be given or taken by Holders, may be embodied in and
evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument
or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of Holders
signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and
conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Section.
(2) The fact and date of the execution by any Person
of any such instrument or writing may be proved in any manner
which the Trustee deems sufficient.
(3) The ownership of Debentures shall be proved by the
Register.
(4) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any
8
Debenture shall bind every future Holder of the same Debenture
and the holder of every Debenture issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Debenture.
(5) If the Company solicits from the Holders any
request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or
pursuant to a resolution of its Board of Directors, fix in
advance a record date for the determination of Holders entitled
to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no
obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record
date, but only Holders of record at the close of business on such
record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of
outstanding Debentures have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the outstanding
Debentures shall be computed as of such record date.
ARTICLE 2
THE DEBENTURES; THE SERIES A DEBENTURES
SECTION 2.01 ISSUE OF DEBENTURES GENERALLY.
------------------------------
The aggregate principal amount of the Debentures which
may be authenticated and delivered under this Indenture is
limited to the aggregate liquidation preference of the Preferred
Securities.
The Debentures may be issued in one or more series as
from time to time shall be authorized by the Board of Directors.
The Debentures of each series and the Trustee's
Certificate of Authentication shall be substantially in the forms
to be attached as exhibits to the Indenture or supplemental
indenture providing for their issuance, but in the case of
Debentures other than Series A Debentures, with such inclusions,
omissions and variations as are such letters, numbers or other
marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto
9
or with any rule or regulation of any securities exchange on
which the Debentures may be listed, or to confirm to usage. Each
Debenture shall be dated the date of its authentication.
The several series of Debentures may differ from the
Series A Debentures, and as and between series, in respect of any
or all of the following matters:
(a) designation;
(b) date or dates of maturity, which may be serial;
(c) interest rate or method of determination of the
interest rate and whether Additional Interest will
be payable;
(d) interest payment dates and the regular record
dates therefor;
(e) Issue Date;
(f) authorized denominations;
(g) the place or places for the payment of principal
(and premium, if any) and for the payment of
interest;
(h) limitation upon the aggregate principal amount of
Debentures of the series which may be issued;
(i) the optional and mandatory redemption provisions,
if any;
(j) provisions, if any, for any sinking or analogous
fund with respect to the Debentures of such
series; and
(k) any other provisions expressing or referring to
the terms and conditions upon which the Debentures
of such series are to be issued under this
Indenture which are not in conflict with the
provisions of this Indenture;
in each case as determined and specified by the Board of
Directors. The Trustee shall not authenticate and deliver
Debentures of any series (other than the Series A Debentures)
upon initial issue unless the terms and conditions of such series
shall have been set forth in a supplemental indenture entered
into between the Company and the Trustee as provided in Section
9.01.
10
SECTION 2.02 FORM OF THE SERIES A SECURITIES; DENOMINATIONS.
-----------------------------------------------
The Series A Debentures and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit A
attached hereto. The terms and provisions contained in the
Series A Debentures, a form of which is annexed hereto as Exhibit
A, shall constitute, and are hereby expressly made, a part of
this Indenture. The Company and the Trustee, by their execution
and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
The Trustee shall authenticate and make available for
delivery Series A Debentures for original issue in the aggregate
principal amount of $ to evidence the Company's
obligation with respect to the loan from PECO Energy Capital,
upon a Board of Directors resolution and a written order of the
Company signed by two Officers of the Company, but without any
further action by the Company. Such order shall specify the
amount of the Series A Debentures to be authenticated and the
date on which the original issue of Debentures is to be
authenticated and delivered. The aggregate principal amount of
Series A Debentures outstanding at any time may not exceed
$ except as provided in Section 2.09 hereof.
The Series A Debentures shall be issuable only in
registered form without coupons and only in denominations of
$25.00 and any integral multiple thereof.
SECTION 2.03 PAYMENT OF PRINCIPAL AND INTEREST.
----------------------------------
The principal of and interest on the Debentures of any
series, as well as any premium thereon in the case of redemption
thereof prior to maturity, shall be payable in the coin or
currency of the United States of America which at the time is
legal tender for public and private debts at the office of the
Paying Agent. Each Debenture shall be dated its Issue Date.
Interest on the Debentures shall be computed on the basis of a
360-day year composed of twelve 30-day months.
The interest on any Debenture which is payable and is
punctually paid or duly provided for, on any interest payment
date for Debentures of that series shall be paid to the person in
whose name the Debenture is registered at the close of business
on the regular record date therefor. In the event that any
Debenture of a particular series or portion thereof is called for
redemption, and the redemption date is subsequent to the regular
record date with respect to any interest payment date and prior
to such interest payment date, interest on such Debenture will be
paid upon presentation and surrender of such Debenture to the
Paying Agent.
11
SECTION 2.04 EXECUTION AND AUTHENTICATION.
-----------------------------
The Debentures shall be executed on behalf of the
Company by its Chief Executive Officer, its President or one of
its Vice Presidents, under its corporate seal imprinted or
reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any such Officer on the
Debentures may be manual or facsimile.
Debentures bearing the manual or facsimile signatures
of individuals who were at any time the proper Officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Debentures or did not
hold such offices at the date of such Debentures.
No Debenture shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless
there appears on such Debenture a certificate of authentication
duly executed by the Trustee by manual signature of an authorized
officer, and such certificate upon any Debenture shall be
conclusive evidence, and the only evidence, that such Debenture
has been duly authenticated and made available for delivery
hereunder.
The Trustee shall act as the initial authenticating
agent. Thereafter, the Trustee may appoint an authenticating
agent. An authenticating agent may authenticate Debentures
whenever the Trustee may do so. Each reference in this Indenture
to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as a Paying
Agent to deal with the Company or an Affiliate of the Company.
SECTION 2.05 REGISTRAR AND PAYING AGENT.
---------------------------
The Company shall maintain or cause to be maintained,
within or outside the Commonwealth of Pennsylvania, an office or
agency where the Debentures may be presented for registration of
transfer or for exchange ("Registrar"), an office or agency where
Debentures may be presented or surrendered for purchase or
payment ("Paying Agent"), and an office or agency where notices
and demands to or upon the Company in respect of the Debentures
and this Indenture may be served. The Registrar shall keep a
register (the "Register") of the Debentures and of their transfer
and exchange. The Company may have one or more co-Registrars and
one or more additional Paying Agents. The term Paying Agent
includes any additional paying agent. The corporate trust office
of the Trustee at Reading, Pennsylvania, Attention: Corporate
Trust Department, shall initially be the Registrar and agent for
service of notice or demands on the Company, and Delaware Trust
12
Company, Wilmington, Delaware, shall initially be the Paying
Agent.
The Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-Registrar (if
not the Trustee or the Company). The agreement shall implement
the provisions of this Indenture that relate to such agent. The
Company shall give prompt written notice to the Trustee of any
change of location of such office or agency. If at any time the
Company shall fail to maintain or cause to be maintained any such
required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the address of the Trustee
set forth in Section 11.02 hereof. The Company shall notify the
Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar, Paying Agent or agent for service
of notices or demands, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section
7.07 hereof. The Company or any Affiliate of the Company may act
as Paying Agent, Registrar or co-Registrar or agent for service
of notices and demands.
The Company may also from time to time designate one or
more other offices or agencies where the Debentures may be
presented or surrendered for any or all such purposes and may
from time to time rescind such designations. The Company will
give prompt written notice to the Trustee of any such designation
or rescission and of any change in location of any such other
office or agency.
SECTION 2.06 PAYING AGENT TO HOLD MONEY IN TRUST.
------------------------------------
Except as otherwise provided herein, prior to each due
date of the principal and interest on any Debenture, the Company
shall deposit with the Paying Agent a sum of money sufficient to
pay such principal, premium (if any) and interest so becoming
due. The Company shall require each Paying Agent (other than the
Trustee or the Company) to agree in writing that such Paying
Agent shall hold in trust for the benefit of Holders or the
Trustee all money held by the Paying Agent for the payment of
principal and interest on the Debentures and shall notify the
Trustee of any default by the Company in making any such payment.
At any time during the continuance of any such default, the
Paying Agent shall, upon the request of the Trustee, forthwith
pay to the Trustee all money so held in trust and account for any
money disbursed by it. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and to
account for any money disbursed by it. Upon doing so, the Paying
Agent shall have no further liability for the money so paid over
to the Trustee. If the Company, a Subsidiary or an Affiliate of
13
either of them acts as Paying Agent, it shall segregate the money
held by it as Paying Agent and hold it as a separate trust fund.
SECTION 2.07 DEBENTUREHOLDER LISTS.
----------------------
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of Debentureholders. If the Trustee is
not the Registrar, the Company shall cause to be furnished to the
Trustee on or before the record date for each interest payment
date and at such other times as the Trustee may request in
writing, within five Business Days of such request, a list, in
such form as the Trustee may reasonably require of the names and
addresses of Debentureholders, provided that during any deferral
period, such information will be provided every six months or
upon request of the Trustee.
SECTION 2.08 TRANSFER AND EXCHANGE.
----------------------
When Debentures are presented to the Registrar or a
co-Registrar with a request to register the transfer or to
exchange them for an equal principal amount of Debentures of the
same series of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested if
its requirements for such transactions are met. To permit
registrations of transfer and exchanges, the Company shall
execute and the Trustee shall authenticate Debentures, all at the
Registrar's request.
Every Debenture presented or surrendered for
registration of transfer or for exchange shall (if so required by
the Company or the Trustee) be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the
Company and the Registrar duly executed by the Holder or his
attorney duly authorized in writing.
The Company shall not charge a service charge for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to pay all taxes, assessments or
other governmental charges that may be imposed in connection with
the transfer or exchange of the Debentures from the
Debentureholder requesting such transfer or exchange (other than
any exchange of a temporary Debenture for a definitive Debenture
not involving any change in ownership).
The Company shall not be required to make, and the
Registrar need not register, transfers or exchanges of (a) any
Debenture for a period beginning at the opening of business 15
days before the mailing of a notice of redemption of Debentures
14
and ending at the close of business on the day of such mailing or
(b) any Debenture selected, called or being called for
redemption, except, in the case of any Debenture to be redeemed
in part, the portion thereof not to be redeemed.
SECTION 2.09 REPLACEMENT DEBENTURES.
-----------------------
If (a) any mutilated Debenture is surrendered to the
Company or the Trustee, or (b) the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss
or theft of any Debenture, and there is delivered to the Company
and the Trustee such Debenture or indemnity as may be required by
them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Debenture has been
acquired by a bona fide purchaser, the Company shall execute in
exchange for any such mutilated Debenture or in lieu of any such
destroyed, lost or stolen Debenture, a new Debenture of like
tenor and principal amount, bearing a number not
contemporaneously outstanding, and the Trustee shall authenticate
and make such new Debenture available for delivery.
In case any such mutilated, destroyed, lost or stolen
Debenture has become or is about to become due and payable, or is
about to be redeemed by the Company pursuant to Article 3 hereof,
the Company in its discretion may, instead of issuing a new
Debenture, pay or purchase such Debenture, as the case may be.
Upon the issuance of any new Debentures under this
Section 2.09, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) in connection therewith.
Every new Debenture issued pursuant to this Section
2.09 in lieu of any mutilated, destroyed, lost or stolen
Debenture shall constitute an original additional contractual
obligation of the Company whether or not the mutilated,
destroyed, lost or stolen Debenture shall be at any time
enforceable by anyone, and shall be entitled to all benefits of
this Indenture equally and ratably with any and all other
Debentures duly issued hereunder.
The provisions of this Section 2.09 are exclusive and
shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Debentures.
15
SECTION 2.10 OUTSTANDING DEBENTURES; DETERMINATIONS OF HOLDERS'
--------------------------------------------------
ACTION.
-------
Debentures outstanding at any time are all the
Debentures authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation, those mutilated,
destroyed, lost or stolen Debentures referred to in Section 2.09
hereof, those redeemed by the Company pursuant to Article 3
hereof, and those described in this Section 2.10 as not
outstanding. A Debenture does not cease to be outstanding because
the Company or a Subsidiary or Affiliate thereof holds the
Debenture; provided, however, that in determining whether the
Holders of the requisite principal amount of Debentures have
given or concurred in any request, demand, authorization,
direction, notice, consent or waiver hereunder, Debentures owned
by the Company shall be disregarded and deemed not to be
outstanding.
Subject to the foregoing, only Debentures outstanding
at the time of such determination shall be considered in any such
determination (including determinations pursuant to Articles 3, 6
and 9).
If a Debenture is replaced pursuant to Section 2.09, it
ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Debenture is held by a bona
fide purchaser.
If the Paying Agent (other than the Company) holds, in
accordance with this Indenture, at maturity or on a Redemption
Date, money sufficient to pay the Debentures payable on that
date, then immediately on the date of maturity or such Redemption
Date, as the case may be, such Debentures shall cease to be
outstanding, and interest, if any, on such Debentures shall cease
to accrue.
SECTION 2.11 TEMPORARY DEBENTURES.
---------------------
So long as PECO Energy Capital shall hold all of the
Debentures, the Company may execute temporary Debentures, and
upon the Company's written request, signed by two Officers of the
Company, the Trustee shall authenticate and make such temporary
Debentures available for delivery. Temporary Debentures shall be
printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the
tenor of the definitive Debentures in lieu of which they are
issued and with such appropriate insertions, omissions,
substitutions and other variations as the Officers of the Company
executing such Debentures may determine, as conclusively
evidenced by their execution of such Debentures.
16
After the preparation of definitive Debentures, the
temporary Debentures shall be exchangeable for definitive
Debentures of the same series upon surrender of the temporary
Debentures at the office or agency of the Company designated for
such purpose pursuant to Section 2.05 hereof, without charge to
the Holder. Upon surrender for cancellation of any one or more
temporary Debentures, the Company shall execute a like principal
amount of definitive Debentures of authorized denominations, and
the Trustee, upon written request of the Company signed by two
Officers of the Company, shall authenticate and make such
Debentures available for delivery in exchange therefor. Until so
exchanged, the temporary Debentures shall in all respects be
entitled to the same benefits under this Indenture as definitive
Debentures.
SECTION 2.12 CANCELLATION.
-------------
All Debentures surrendered for payment, redemption by
the Company pursuant to Article 3 hereof or registration of
transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be
promptly canceled by the Trustee. The Company may at any time
deliver to the Trustee for cancellation any Debentures previously
authenticated and made available for delivery hereunder which the
Company may have acquired in any manner whatsoever, and all
Debentures so delivered shall be promptly canceled by the
Trustee. The Company may not reissue, or issue new Debentures to
replace Debentures it has paid or delivered to the Trustee for
cancellation. No Debentures shall be authenticated in lieu of or
in exchange for any Debentures canceled as provided in this
Section 2.12, except as expressly permitted by this Indenture.
All canceled Debentures held by the Trustee shall be destroyed by
the Trustee, and the Trustee shall deliver a certificate of
destruction to the Company.
SECTION 2.13 DEFAULTED INTEREST.
-------------------
If the Company defaults in a payment of interest on the
Debentures, it shall pay the defaulted interest, plus (to the
extent lawful) any interest payable on the defaulted interest, to
the Persons who are Holders on a subsequent special record date,
and such special record date, as used in this Section 2.13 with
respect to the payment of any defaulted interest, shall mean the
15th day next preceding the date fixed by the Company for the
payment of defaulted interest, whether or not such day is a
Business Day. At least 15 days before the subsequent special
record date, the Company shall mail to each Holder and to the
Trustee a notice that states the subsequent special record date,
the payment date and the amount of defaulted interest to be paid.
17
The Company may also pay defaulted interest in any other lawful
manner.
ARTICLE 3
REDEMPTION
SECTION 3.01 REDEMPTION; NOTICE TO TRUSTEE.
------------------------------
(a) The Series A Debentures are subject to redemption
prior to maturity as provided in the form thereof.
(b) The redemption terms for any additional series of
Debentures shall be as specified in the supplemental indenture
creating such series of Debentures; provided that each series of
Debentures shall be subject to mandatory redemption upon the
dissolution of PECO Energy Capital.
(c) If any or all of the Debentures are to be redeemed
pursuant to paragraphs (a) or (b) above, the Company shall give
notice by first class mail, postage prepaid, to the Trustee
within 45 days prior to the date of such redemption. Any such
notice of redemption shall state the date and price of
redemption.
SECTION 3.02 SELECTION OF DEBENTURES TO BE REDEEMED.
---------------------------------------
If less than all the outstanding Debentures are to be
redeemed at any time, the Trustee shall select the Debentures to
be redeemed on a pro rata basis, by lot or any other method the
Trustee considers fair and appropriate. The Trustee shall make
the selection at least 30 but not more than 60 days before the
Redemption Date from outstanding Debentures not previously called
for redemption. Provisions of this Indenture that apply to
Debentures called for redemption also apply to portions of
Debentures called for redemption. The Trustee shall notify the
Company promptly of the Debentures or portions of Debentures to
be redeemed.
SECTION 3.03 NOTICE OF REDEMPTION.
---------------------
So long as PECO Energy Capital remains the sole Holder
of the Debentures, no notice of any redemption of Debentures will
be required. In the event and at such time that PECO Energy
Capital ceases to be the sole Holder of the Debentures, at least
30 days but not more than 60 days before a Redemption Date, the
Trustee shall mail or cause to be mailed a notice of redemption
by first-class mail, postage prepaid, to each Holder of
18
Debentures to be redeemed at the Holder's last address, as it
appears on the Register. At the Company's written request, the
Trustee shall give the notice of redemption in the Company's name
and at its expense.
The notice shall identify the Debentures to be
redeemed, the provision of the Debentures or this Indenture
pursuant to which the Debentures called for redemption are being
redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Debentures called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
(5) if fewer than all the outstanding Debentures are
to be redeemed, the identification and principal amounts of the
particular Debentures to be redeemed and that, on and after the
Redemption Date, upon surrender of such Debentures, a new
Debenture or Debentures in principal amount equal to the
unredeemed portion thereof will be issued; and
(6) that, unless the Company defaults in making such
redemption payment, interest will cease to accrue on Debentures
called for redemption on and after the Redemption Date.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION.
-------------------------------
If notice of redemption is required as set forth in
Section 3.03, and after notice of redemption is given, Debentures
called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon the later of the
Redemption Date and the date such Debentures are surrendered to
the Paying Agent, such Debentures shall be paid at the Redemption
Price, plus accrued interest to the Redemption Date.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE.
----------------------------
On or prior to a Redemption Date, the Company shall
deposit with the Paying Agent (or if the Company or an Affiliate
is the Paying Agent, shall segregate and hold in trust or cause
such Affiliate to segregate and hold in trust) money sufficient
to pay the Redemption Price of, and accrued interest on, all
Debentures to be redeemed on that date. The Paying Agent shall
19
return to the Company any money not required for the purpose
stated herein.
SECTION 3.06 DEBENTURES REDEEMED IN PART.
----------------------------
Upon surrender of a Debenture that is redeemed in part,
the Trustee shall authenticate for the Holder a new Debenture
equal in principal amount to the unredeemed portion of such
Debenture.
ARTICLE 4
COVENANTS
SECTION 4.01 PAYMENT OF DEBENTURES.
----------------------
(a) The Company shall pay the principal of and
interest (including interest accruing on or after the filing of a
petition in bankruptcy or reorganization relating to the Company,
whether or not a claim for post-filing interest is allowed in
such proceeding) on the Debentures on (or prior to) the dates and
in the manner provided in the Debentures or pursuant to this
Indenture. An installment of principal or interest shall be
considered paid on the applicable date due if on such date the
Trustee or the Paying Agent holds, in accordance with this
Indenture, money sufficient to pay all of such installment then
due. The Company shall pay interest on overdue principal and
interest on overdue installments of interest (including interest
accruing during an Extension Period and/or on or after the filing
of a petition in bankruptcy or reorganization relating to the
Company, whether or not a claim for post-filing interest is
allowed in such proceeding), to the extent lawful, at the rate
per annum borne by the Debentures, which interest on overdue
interest shall accrue from the date such amounts became overdue.
(b) Notwithstanding paragraph (a) of this Section 4.01
or any other provision herein to the contrary, the Company
shall have the right in its sole and absolute discretion at any
time and from time to time while the Debentures are outstanding,
so long as an Event of Default has not occurred and is
continuing, to extend the interest payment period for up to 60
consecutive months, provided that such Extension Period
shall not extend beyond the stated maturity date or redemption
date of the Series A Subordinated Debentures, and provided
further that at the end of each Extension Period the Company
shall pay all interest then accrued and unpaid (together with
interest thereon compounded daily to the extent permitted by
applicable law). Prior to the termination of an Extension
Period, the Company may shorten or may further extend the
interest payment period, provided that such Extension Period
together with all such further extensions may not exceed 60
months. The Company shall give the Trustee notice of its
20
selection of such extended or shortened interest payment period
at least one Business Day prior to the earlier of (i) the date
selected by the Company to make the interest payment or (ii) the
date PECO Energy Capital is required to give notice of the record
or payment date of such related distribution to any national
securities exchange on which the Preferred Securities are then
listed or other applicable self-regulatory organization, but in
any event not less than two Business Days prior to such record
date fixed by the Company for the payment of such interest. The
Company shall give or cause the Trustee to give such notice of
the Company's selection of such extended interest payment period
to the Holders.
SECTION 4.02 PROHIBITION AGAINST DIVIDENDS, ETC. DURING AN
EVENT OF DEFAULT OR AN EXTENSION PERIOD.
----------------------------------------
Neither the Company nor any Subsidiary shall declare or
pay any dividend on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its Capital Stock
(other than dividends by a Wholly Owned Subsidiary) during an
Extension Period or if at such time there shall have occurred any
Default or Event of Default or if the Company shall be in default
with respect to its payment obligations under the Guarantee
Agreement.
SECTION 4.03 SEC REPORTS.
------------
The Company shall file with the Trustee, within 15 days
after it files them with the SEC, copies of its annual report and
of the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which the Company is required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If
the Company is not subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall file
with the Trustee such information, documents and other reports
(or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) which are specified in
Sections 13 or 15(d) of the Exchange Act. The Company shall also
comply with the provisions of Section 314(a) of the TIA.
SECTION 4.04 COMPLIANCE CERTIFICATES.
------------------------
(a) The Company shall deliver to the Trustee within
90 days after the end of each of the Company's fiscal years an
Officer's Certificate, stating whether or not the signer knows of
any Default or Event of Default. Such certificate shall contain a
certification from the principal executive officer, principal
21
financial officer or principal accounting officer of the Company
as to his or her knowledge of the Company's compliance with all
conditions and covenants under this Indenture. For purposes of
this Section 4.04(a), such compliance shall be determined without
regard to any period of grace or requirement of notice provided
under this Indenture. If such Officer does know of such a Default
or Event of Default, the certificate shall describe any such
Default or Event of Default, and its status. Such Officer's
Certificate need not comply with Sections 11.04 and 11.05 hereof.
(b) The Company shall deliver to the Trustee any
information reasonably requested by the Trustee in connection
with the compliance by the Trustee or the Company with the TIA.
SECTION 4.05 RELATIONSHIP WITH PECO ENERGY CAPITAL.
--------------------------------------
The Company agrees (i) to maintain direct or indirect
through a wholly owned subsidiary 100% ownership of the General
Partner and will cause the General Partner to maintain 100%
ownership of the general partnership interests in PECO Energy
Capital ("Common Debentures"); (ii) to cause at least 10% of the
total value of PECO Energy Capital and at least 3% of all
interests in the capital, income, gain, loss, deduction and
credit of PECO Energy Capital to be represented by general
partner interests; (iii) to cause the General Partner to timely
perform all of its duties as General Partner of PECO Energy
Capital (including the duty to pay distributions on the Preferred
Securities); and (iv) to use its reasonable efforts to cause PECO
Energy Capital to remain a limited partnership and otherwise
continue to be treated as a partnership for United States federal
income tax purposes.
SECTION 4.06 FURTHER INSTRUMENTS AND ACTS.
-----------------------------
Upon request of the Trustee, the Company shall execute
and deliver such further instruments and do such further acts as
may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION 4.07 PAYMENTS FOR CONSENTS.
----------------------
Neither the Company nor any Subsidiary shall, directly
or indirectly, pay or cause to be paid any consideration, whether
by way of interest, fee or otherwise, to any Holder of any
Debentures for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or
the Debentures unless such consideration is offered to be paid or
agreed to be paid to all Holders of the Debentures who so
22
consent, waive or agree to amend in the time frame set forth in
the documents soliciting such consent, waiver or agreement.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 WHEN THE COMPANY MAY MERGE, ETC.
--------------------------------
The Company may not consolidate with or merge with or
into, or sell, convey, transfer or lease all or substantially all
of its assets (either in one transaction or a series of
transactions) to, any Person unless:
(1) the Person formed by or surviving such
consolidation or merger or to which such sale, conveyance,
transfer or lease shall have been made (the "Successor") if other
than the Company, (a) is organized and existing under the laws of
the United States of America or any State thereof or the District
of Columbia, and (b) shall expressly assume by a supplemental
indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company
under the Debentures and the Indenture;
(2) immediately prior to and after giving effect to
such transaction (and treating any Indebtedness which becomes an
obligation of the Successor Person or any Subsidiary as a result
of such transaction as having been incurred by such Person or
such Subsidiary at the time of such transaction), no Default or
Event of Default shall have occurred and be continuing; and
(3) the Company, delivers to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, conveyance, transfer or lease and
such supplemental indenture comply with this Indenture.
The Successor will be the successor to the Company, and
will be substituted for, and may exercise every right and power
and become the obligor on the Debentures with the same effect as
if the Successor had been named as, the Company herein but, in
the case of a sale, conveyance, transfer or lease of all or
substantially all of the assets of the Company, the predecessor
Company will not be released from its obligation to pay the
principal of, premium, if any, and interest on the Debentures.
23
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT.
------------------
An "Event of Default" occurs if one of the following
shall have occurred and be continuing:
(1) The Company defaults in the payment, when due and
payable, of (a) interest, including Additional Interest, on any
Debenture and the default continues for a period of 10 days;
provided, that during an Extension Period, failure to pay
interest on the Debentures shall not constitute a Default or
Event of Default hereunder, or (b) the principal of, or premium,
if any, on any Debentures when the same becomes due and payable
at maturity, acceleration, on any Redemption Date, or otherwise;
(2) The Company defaults in the performance of, fails
to comply with any of its other covenants or agreements in the
Debentures or this Indenture and such failure continues for 60
days after receipt by the Company of a "Notice of Default";
(3) The Company, pursuant to or within the meaning of
any Bankruptcy Law:
(a) commences a voluntary case or proceeding;
(b) consents to the entry of an order for relief
against it in an involuntary case or
proceeding;
(c) consents to the appointment of a Custodian of
it or for all or substantially all of its
property, and such Custodian is not
discharged within 60 days;
(d) makes a general assignment for the benefit of
its creditors; or
(e) admits in writing its inability to pay its
debts generally as they become due; or
(4) A court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(a) is for relief against the Company in an
involuntary case or proceeding;
24
(b) appoints a Custodian of the Company for all
or substantially all of its properties;
(c) orders the liquidation of the Company;
(d) and in each case the order or decree remains
unstayed and in effect for 60 days.
The foregoing will constitute Events of Default
whatever the reason for any such Event of Default and whether it
is voluntary or involuntary or is effected by operation of law or
pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Title 11, United States
Code, or any similar Federal or state law for the relief of
debtors. "Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator, custodian or similar official under any
Bankruptcy Law.
A Default under clause (2) above is not an Event of
Default until the Trustee notifies the Company or the Holders of
at least a majority in aggregate principal amount of the
Debentures at the time outstanding or the Special Representative
notifies the Company and the Trustee, of the Default and the
Company does not cure such Default within the time specified in
clause (2) above after receipt of such notice. Any such notice
must specify the Default, demand that it be remedied and state
that such notice is a "Notice of Default."
SECTION 6.02 ACCELERATION.
-------------
If any Event of Default other than an Event of Default
under clauses (3) or (4) occurs and is continuing, the Trustee,
the Holders of not less than 25% in principal amount of the
Debentures then outstanding or the Special Representative may
declare the principal of all such Debentures due and payable.
Upon such a declaration, such principal and interest shall be due
and payable immediately.
If an Event of Default specified in clause (3) or (4)
with respect to the Company occurs, the principal of and interest
on all the Debentures shall ipso facto become and be immediately
due and payable without any declaration or other act on the part
of the Trustee or any Debentureholders.
The Special Representative or holders of a majority in
aggregate principal amount of the Debentures at the time
outstanding by notice to the Trustee may rescind an acceleration
25
and its consequences if the rescission would not conflict with
any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest
that has become due solely because of acceleration. No such
rescission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.03 OTHER REMEDIES.
---------------
If an Event of Default occurs and is continuing, the
Trustee may, in its own name or as trustee of an express trust,
institute, pursue and prosecute any proceeding, including,
without limitation, any action at law or suit in equity or other
judicial or administrative proceeding to collect the payment of
principal of, premium, if any, or interest on the Debentures, to
enforce the performance of any provision of the Debentures or
this Indenture or to obtain any other available remedy.
The Trustee may maintain a proceeding even if it does
not possess any of the Debentures or does not produce any of the
Debentures in the proceeding. A delay or omission by the Trustee,
the Special Representative or any Debentureholder in exercising
any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or
acquiescence in, the Event of Default. No remedy is exclusive of
any other remedy. All available remedies are cumulative.
SECTION 6.04 WAIVER OF PAST DEFAULTS.
------------------------
The Special Representative or the Holders of 66 2/3% in
aggregate principal amount of the Debentures at the time
outstanding, by notice to the Trustee, the Company and PECO
Energy Capital, may waive an existing Default or Event of Default
and its consequences. When a Default is waived, it is deemed
cured and shall cease to exist, but no such waiver shall extend
to any subsequent or other Default or impair any consequent
right.
SECTION 6.05 CONTROL BY MAJORITY OR THE SPECIAL
----------------------------------
REPRESENTATIVES.
----------------
The Holders of a majority in aggregate principal amount
of the Debentures then outstanding or the Special Representative
may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts
with law or this Indenture or that the Trustee determines in good
26
faith is unduly prejudicial to the rights of other
Debentureholders or would involve the Trustee in personal
liability. The Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction,
including withholding notice to the Holders of the Debentures of
any series of continuing default (except in the payment of the
principal (other than any mandatory sinking fund payment) of (or
premium, if any) or interest on any Debentures of such series) if
the Trustee considers it in the interest of the holders of such
series of Debentures to do so.
SECTION 6.06 LIMITATION ON SUITS.
--------------------
Except as provided in Section 6.07 hereof, the Special
Representative may not pursue any remedy with respect to this
Indenture or the Debentures unless:
(1) the Holders or the Special Representative gives
to the Trustee written notice stating that an Event of Default is
continuing;
(2) the Holders or the Special Representative
provides to the Trustee reasonable security and indemnity against
any loss, liability or expense satisfactory to the Trustee;
(3) the Trustee does not comply with the request
within 60 days after receipt of the notice, the request and the
offer of security and indemnity; and
SECTION 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
-------------------------------------
Notwithstanding any other provision of this Indenture,
the right of any Holder to receive payment of the principal
amount of or interest on the Debentures held by such Holder, on
or after the respective due dates expressed in the Debentures (in
the case of interest, as the same may be extended pursuant to
Section 4.01(b)) or any Redemption Date, or to bring suit for the
enforcement of any such payment on or after such respective dates
shall not be impaired or affected adversely without the consent
of each such Holder.
SECTION 6.08 COLLECTION SUIT BY THE TRUSTEE.
-------------------------------
If an Event of Default described in Section 6.01(1)
hereof occurs and is continuing, the Trustee may recover judgment
in its own name and as trustee of an express trust against the
Company or any obligor on the Debentures for the whole amount
27
owing with respect to the Debentures and the amounts provided for
in Section 6.07 hereof.
SECTION 6.09 THE TRUSTEE MAY FILE PROOFS OF CLAIM.
-------------------------------------
In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to
the Company or its properties or assets, the Trustee shall be
entitled and empowered, by intervention in such proceeding or
otherwise:
(1) to file and prove a claim for the whole amount of
the principal amount, premium, if any, and interest on the
Debentures and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding;
and
(2) to collect and receive any moneys or other
property payable or deliverable on any such claims and to
distribute the same; and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders,
to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof.
Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Debentures or the rights
of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10 PRIORITIES.
-----------
If the Trustee collects any money pursuant to this
Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07
hereof;
SECOND: to Debentureholders for amounts due and unpaid on
the Debentures for the principal amount,
28
Redemption Price or interest, if any, as the case
may be, ratably, without preference or priority of
any kind, according to such amounts due and
payable on the Debentures; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for
any payment to Debentureholders pursuant to this Section 6.10.
SECTION 6.11 UNDERTAKING FOR COSTS.
----------------------
In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant (other
than the Trustee) in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07
hereof or a suit by Holders of more than 10% in aggregate
principal amount of the Debentures at the time outstanding or a
suit by the Special Representative.
SECTION 6.12 WAIVER OF STAY, EXTENSION OR USURY LAWS.
----------------------------------------
The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, that
would prohibit or forgive the Company from paying all or any
portion of the principal or premium, if any, or interest on the
Debentures as contemplated herein or affect the covenants or the
performance by the Company of its obligations under this
Indenture; and the Company (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no
such law had been enacted.
29
ARTICLE 7
THE TRUSTEE
SECTION 7.01 DUTIES OF THE TRUSTEE.
----------------------
(1) If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care
and skill in its exercise as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(2) Except during the continuance of an Event of
Default, (a) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and (b)
in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the case of any
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(3) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its
own willful misconduct, except that:
(a) this paragraph (3) does not limit the effect
of paragraph (2) of this Section 7.01;
(b) the Trustee shall not be liable for any error
of judgment made in good faith by a Trust
Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent
facts; and
(c) the Trustee shall not be liable with respect
to any action it takes or omits to take in
good faith in accordance with a direction
received by it pursuant to Section 6.05
hereof.
(4) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (1), (2), (3) and
(5) of this Section 7.01 and Section 7.02.
(5) The Trustee may refuse to perform any duty or
exercise any right or power or extend or risk its own funds or
30
otherwise incur any financial liability unless it receives
security and indemnity reasonably satisfactory to it against any
loss, liability or expense.
(6) Money held by the Trustee in trust hereunder need
not be segregated from other funds except to the extent required
by law. The Trustee shall not be liable for interest on any money
held by it hereunder.
SECTION 7.02 RIGHTS OF THE TRUSTEE.
----------------------
(1) The Trustee may rely on any document believed by
it to be genuine and to have been signed or presented by the
proper person. The Trustee need not investigate any fact or
matter stated in the document;
(2) Before the Trustee acts or refrains from acting,
it may require an Officer's Certificate and, if appropriate, an
Opinion of Counsel. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on
such Officer's Certificate and Opinion of Counsel;
(3) The Trustee may act through agents and shall not
be responsible for the misconduct or negligence of any agent
appointed with due care;
(4) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it reasonably believes
to be authorized or within its rights or powers;
(5) The Trustee may consult with counsel of its
selection and the advice of such counsel or any Opinion of
Counsel 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 reliance thereon; and
(6) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders or
Special Representative pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security and
indemnity against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction.
SECTION 7.03 INDIVIDUAL RIGHTS OF THE TRUSTEE.
---------------------------------
The Trustee in its individual or any other capacity may
become the owner or pledgee of Debentures and may otherwise deal
with the Company or its Affiliates with the same rights it would
31
have if it were not Trustee. Any Paying Agent, Registrar or
co-registrar may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11 hereof.
SECTION 7.04 THE TRUSTEE'S DISCLAIMER.
-------------------------
The Trustee makes no representation as to the validity
or adequacy of this Indenture or the Debentures, it shall not be
accountable for the Company's use of the proceeds from the
Debentures, and it shall not be responsible for any statement in
this Indenture or the Debentures or any report or certificate
issued by the Company hereunder or any registration statement
relating to the Debentures (other than the Trustee's certificate
of authentication), or the determination as to which beneficial
owners are entitled to receive any notices hereunder.
SECTION 7.05 NOTICE OF DEFAULTS.
-------------------
If a Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each
Debentureholder, as their names and addresses appear on the
Debenture Register, notice of the Default within 90 days after it
becomes known to the Trustee unless such Default shall have been
cured or waived. Except in the case of a Default described in
Section 6.01(1) hereof, the Trustee may withhold such notice if
and so long as a committee of Trust Officers in good faith
determines that the withholding of such notice is in the
interests of Debentureholders. The second sentence of this
Section 7.05 shall be in lieu of the proviso to TIA Section
315(b). Said proviso is hereby expressly excluded from this
Indenture, as permitted by the TIA.
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS.
------------------------------
Within 60 days after each May 31, beginning with the
May 31 next following the date of this Indenture, the Trustee
shall mail to each Debentureholder, and such other holders that
have submitted their names to the Trustee for such purpose, a
brief report dated as of such May 31 in accordance with and to
the extent required under TIA Section 313.
A copy of each report at the time of its mailing to
Debentureholders shall be filed with the Company, the SEC and
each securities exchange on which the Debentures are listed. The
Company agrees to promptly notify the Trustee whenever the
Debentures become listed on any securities exchange and of any
listing thereof.
32
SECTION 7.07 COMPENSATION AND INDEMNITY.
---------------------------
The Company agrees:
(1) to pay to the Trustee from time to time such
compensation as shall be agreed in writing between the Company
and the Trustee 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);
(2) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses, and
advances of its agents and counsel), including all reasonable
expenses and advances incurred or made by the Trustee in
connection with any Event of Default or any membership on any
creditors' committee, except any such expense or advance as may
be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee, its officers, directors
and shareholders, for, and to hold it harmless against, any and
all loss, liability or expense, incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs
and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its
powers or duties hereunder.
Before, after or during an Event of Default, the
Trustee shall have a claim and lien prior to the Debentures as to
all property and funds held by it hereunder for any amount owing
it or any predecessor Trustee pursuant to this Section 7.07,
except with respect to funds held in trust for the payment of
principal of, premium, if any, or interest on particular
Debentures.
The Company's payment obligations pursuant to this
Section 7.07 are not subject to Article 10 of this Indenture and
shall survive the discharge of this Indenture. When the Trustee
renders services or incurs expenses after the occurrence of a
Default specified in Section 6.01 hereof, the compensation for
services and expenses are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08 REPLACEMENT OF TRUSTEE.
-----------------------
The Trustee may resign by so notifying the Company in
writing at least 30 days prior to the date of the proposed
resignation; provided, however, no such resignation shall be
33
effective until a successor Trustee has accepted its appointment
pursuant to this Section 7.08. The Special Representative or the
Holders of a majority in aggregate principal amount of the
Debentures at the time outstanding, may remove the Trustee by so
notifying the Trustee in writing and may appoint a successor
Trustee, which shall be subject to the consent of the Company
unless an Event of Default has occurred and is continuing. The
Trustee shall resign if:
(1) the Trustee fails to comply with Section 7.10
hereof;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly
appoint a successor Trustee. A successor Trustee shall deliver a
written acceptance of its appointment to the retiring Trustee and
to the Company. Thereupon the resignation or removal of the
retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a
notice of its succession to Debentureholders. Subject to payment
of all amounts owing to the Trustee under Section 7.07 hereof and
subject further to its lien under Section 7.07, the retiring
Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee. If a successor Trustee does
not take office within 30 days after the retiring Trustee resigns
or is removed, the retiring Trustee, the Company, the Special
Representative or the Holders of a majority in aggregate
principal amount of the Debentures at the time outstanding, may
petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10
hereof, any Debentureholder may petition any court of competent
jurisdiction for its removal and the appointment of a successor
Trustee.
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER.
----------------------------
If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all its corporate trust
business or assets (including this Trusteeship) to another
34
corporation, the resulting, surviving or transferee corporation
without any further act shall be the successor Trustee.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
------------------------------
The Trustee shall at all times satisfy the requirements
of TIA Sections 310(a)(1) and 310(a)(2). The Trustee (or any
Affiliate thereof which has unconditionally guaranteed the
obligations of the Trustee hereunder) shall have a combined
capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. The Trustee
shall comply with TIA Section 310(b). In determining whether the
Trustee has conflicting interests as defined in TIA Section
310(b)(1), the provisions contained in the proviso to TIA Section
310(b)(1) shall be deemed incorporated herein.
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE
---------------------------------------------
COMPANY.
--------
If and when the Trustee shall be or become a creditor
of the Company, the Trustee shall be subject to the provisions of
the TIA regarding the collection of claims against the Company.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONEYS
SECTION 8.01 SATISFACTION AND DISCHARGE OF INDENTURE.
----------------------------------------
The Company shall be deemed to have paid and discharged
the entire indebtedness on any series of the Debentures
outstanding on the date the Company has irrevocably deposited or
caused to be irrevocably deposited with the Trustee or any Paying
Agent as trust funds in trust, specifically pledged as security
for, and dedicated solely to, the benefit the Holders (1) cash in
an amount, or (2) U.S. Government Obligations, maturing as to
principal and interest at such times and in such amounts as will
ensure the availability of cash, or (3) a combination thereof,
sufficient to pay the principal of, premium, if any, and interest
on, all Debentures then outstanding, and on such date; the
provisions of this Indenture with respect to the Debentures shall
no longer be in effect (except as to (1) the rights of
registration of transfer, substitution and exchange of
Debentures, (2) the replacement of apparently mutilated, defaced,
destroyed, lost or stolen Debentures, (3) the rights of the
Holders to receive payments of principal thereof and interest
thereon, (4) the rights of the Holders as beneficiaries hereof
35
with respect to the property so deposited with the Trustee
payable to all or any of them, (5) the obligation of the Company
to maintain an office or agency for payments on and registration
of transfer of the Debentures, and (6) the rights, obligations
and immunities of the Trustee hereunder); and the Trustee shall,
at the request and expense of the Company, execute proper
instruments acknowledging the same; provided that if the Company
deposits U.S. Government Obligations with the Trustee:
(A) no Default or Event of Default with respect to
the Debentures has occurred and is continuing on the date of
such deposit or occurs as a result of such deposit;
(B) the Company has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each
stating that all conditions precedent relating to the
defeasance contemplated by this provision have been complied
with; and
(C) the Company has delivered to the Trustee (i)
either a private Internal Revenue Service ruling or an
Opinion of Counsel based on a ruling of the Internal Revenue
Service or other change in Federal income tax law to the
effect that the Holders will not recognize income, gain or
loss for federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to
federal income tax on the same amount and in the manner and
at the same times as would have been the case if such
deposit, defeasance and discharge had not occurred, and (ii)
an Opinion of Counsel to the effect that (A) the deposit
shall not result in the Company, the Trustee or the trust
being deemed to be an "investment company" under the
Investment Company Act of 1940, as amended, and (B) such
deposit creates a valid trust in which such Holders of the
Debentures have the sole beneficial ownership interest or
that such Holders of the Debentures have a nonavoidable
first priority security interest in such trust.
SECTION 8.02 APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR
---------------------------------------------
PAYMENT OF DEBENTURES.
----------------------
Subject to Section 8.04, and Article 10 of this
Indenture, all moneys deposited with the Trustee pursuant to
Section 8.01 hereof shall be held in trust and applied by it to
the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), to the
Holders for the payment or redemption of which such moneys have
been deposited with the Trustee, of all sums due and to become
due thereon for principal and interest; but such money need not
36
be segregated from other funds except to the extent required by
law.
SECTION 8.03 REPAYMENT OF MONEYS HELD BY PAYING AGENT.
-----------------------------------------
In connection with the satisfaction and discharge of
this Indenture, all moneys then held by any Paying Agent under
this Indenture shall, upon demand of the Company, be repaid to it
or paid to the Trustee, and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
SECTION 8.04 RETURN OF MONEYS HELD BY THE TRUSTEE AND PAYING
-----------------------------------------------
AGENT UNCLAIMED FOR THREE YEARS.
--------------------------------
Any moneys deposited with or paid to the Trustee or any
Paying Agent for the payment of the principal, premium, if any,
or interest on any Debenture and not applied but remaining
unclaimed for three years after the date when such principal,
premium, if any, or interest shall have become due and payable
shall unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be
repaid to the Company by the Trustee or such Paying Agent, and
the Holder of such Debenture shall, unless otherwise required by
mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, thereafter look only to the Company for
any payment which such Holder may be entitled to collect, and all
liability of the Trustee or any Paying Agent with respect to such
moneys shall thereupon cease.
ARTICLE 9
AMENDMENTS
SECTION 9.01 WITHOUT CONSENT OF HOLDERS.
---------------------------
From time to time, when authorized by a resolution of
the Board of Directors, the Company and the Trustee, without
notice to or the consent of any holders of the Debentures or
their Special Representative issued hereunder, may amend or
supplement this Indenture or the Debentures:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Article 5 hereof;
(3) to provide for uncertificated Debentures in
addition to or in place of certificated Debentures;
37
(4) to make any other change that does not adversely
affect the rights of any Debentureholder; or
(5) to comply with any requirement of the SEC in
connection with the qualification of this Indenture under the
TIA; and
(6) to set forth the terms and conditions, which shall
not be inconsistent with this Indenture, of the series of
Debentures (other than the Series A Debentures) that are to be
issued hereunder and the form of Debentures of such series.
SECTION 9.02 WITH CONSENT OF HOLDERS.
------------------------
With written consent of the Special Representative or
the Holders of at least 66 2/3% in aggregate principal amount of
the series of Debentures at the time outstanding, the Company and
the Trustee may amend this Indenture or the Debentures or may
waive future compliance by the Company with any provisions of
this Indenture or the Debentures. However, without the consent of
each Debentureholder affected, such an amendment or waiver may
not:
(1) reduce the principal amount of the Debentures the
Holders of which must consent to an amendment of the Indenture or
a waiver;
(2) change the Stated Maturity of the principal of, or
the interest or rate of interest on the Debentures, change
adversely to the Holders the redemption provisions of Article 3
hereof, or impair the right to institute suit for the enforcement
of any such payment or make any Debenture payable in money or
securities other than that stated in the Debenture;
(3) make any change in Article 10 hereof that
adversely affects the rights of the Holders of the Debentures or
any change to any other section hereof that adversely affects
their rights under Article 10 hereof;
(4) waive a Default in the payment of the principal
of, premium, if any, or interest on, any Debenture; or
(5) change Section 6.07 hereof.
It shall not be necessary for the consent of the
Holders under this Section 9.02 to approve the particular form of
any proposed amendment, but it shall be sufficient if such
consent approves the substance thereof.
If certain Holders agree to defer or waive certain
obligations of the Company hereunder with respect to Debentures
38
held by them, such deferral or waiver shall not affect the rights
of any other Holder to receive the payment or performance
required hereunder in a timely manner.
After an amendment or waiver under this Section 9.02
becomes effective, the Company shall mail to the Special
Representative and to each Holder a notice briefly describing the
amendment or waiver. Any failure of the Company to mail such
notices, or any defect therein, shall not, however, in any way
impair or affect the validity of such amendment or waiver.
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT.
------------------------------------
Every supplemental indenture executed pursuant to this
Article 9 shall comply with the TIA.
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND
----------------------------------------------
ACTIONS.
--------
Until an amendment, waiver or other action by Holders
becomes effective, a consent to it or any other action by a
Holder of a Debenture hereunder is a continuing consent by the
Holder and every subsequent Holder of that Debenture or portion
of the Debenture that evidences the same obligation as the
consenting Holder's Debenture, even if notation of the consent,
waiver or action is not made on the Debenture. However, any such
Holder or subsequent Holder may revoke the consent, waiver or
action as to such Holder's Debenture or portion of the Debenture
if the Trustee receives the notice of revocation before the
consent of the requisite aggregate principal amount of the
Debentures then outstanding has been obtained and not revoked.
After an amendment, waiver or action becomes effective, it shall
bind every Debentureholder, except as provided in Section 9.02
hereof.
The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled
to consent to any amendment or waiver. If a record date is fixed,
then, notwithstanding the first two sentences of the immediately
preceding paragraph, those Persons who were Holders at such
record date or their duly designated proxies, and only those
Persons, shall be entitled to consent to such amendment,
supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more
than 90 days after such record date.
39
SECTION 9.05 NOTATION ON OR EXCHANGE OF DEBENTURES.
--------------------------------------
Debentures authenticated and made available for
delivery after the execution of any supplemental indenture
pursuant to this Article 9 may, and shall, if required by the
Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the
Company shall so determine, new Debentures so modified as to
conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and made available for
delivery by the Trustee in exchange for outstanding Debentures.
SECTION 9.06 TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES.
----------------------------------------
The Trustee shall sign any supplemental indenture
authorized pursuant to this Article 9 if the supplemental indenture
does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need
not, sign it. In signing such amendment the Trustee shall be
entitled to receive, and shall be fully protected in relying upon,
an Officer's Certificate and Opinion of Counsel stating that such
supplemental indenture is authorized or permitted by this
Indenture.
SECTION 9.07 EFFECT OF SUPPLEMENTAL INDENTURES.
----------------------------------
Upon the execution of any supplemental indenture under
this Article 9, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes and every Holder of Debentures
theretofore or thereafter authenticated and made available for
delivery hereunder shall be bound thereby.
ARTICLE 10
SUBORDINATION
SECTION 10.01 DEBENTURES SUBORDINATED TO SENIOR INDEBTEDNESS.
-----------------------------------------------
Notwithstanding the provisions of Section 6.01 hereof or
any other provision herein or in the Debentures, the Company and
the Trustee or Holder by his acceptance thereof (a) covenants and
agrees, that all payments by the Company of the principal of,
premium, if any, and interest on the Debentures shall be
subordinated in accordance with the provisions of this Article 10
to the prior payment in full, in cash or cash equivalents, of all
amounts payable on, under or in connection with Senior
40
Indebtedness, and (b) acknowledges that holders of Senior
Indebtedness are or shall be relying on this Article 10.
SECTION 10.02 PRIORITY AND PAYMENT OF PROCEEDS IN CERTAIN EVENTS;
---------------------------------------------------
REMEDIES STANDSTILL.
--------------------
(a) Upon any payment or distribution of assets or
securities of the Company, as the case may be, of any kind or
character, whether in cash, property or securities, upon any
dissolution or winding up or total or partial liquidation or
reorganization of the Company, whether voluntary or involuntary, or
in bankruptcy, insolvency, receivership or other proceedings, all
amounts payable on, under or in connection with Senior Indebtedness
(including any interest accruing on such Senior Indebtedness
subsequent to the commencement of a bankruptcy, insolvency or
similar proceeding) shall first be paid in full in cash, or payment
provided for in cash or cash equivalents, before the Holders or the
Trustee on behalf of the Holders shall be entitled to receive from
the Company any payment of principal of or interest on or any other
amounts in respect of the Debentures or distribution of any assets
or securities.
(b) No direct or indirect payment by or on behalf of the
Company of principal of or interest on the Debentures whether
pursuant to the terms of the Debentures or upon acceleration or
otherwise shall be made if, at the time of such payment there
exists (i) a default in the payment of all or any portion of any
Senior Indebtedness (and the Trustee has received written notice
thereof from the Company, one or more holders of Senior
Indebtedness or from any trustee, representative or agent
therefor), or (ii) any other default affecting Senior Indebtedness
permitting its acceleration, as the result of which the maturity of
Senior Indebtedness has been accelerated, and the Trustee has
received written notice from any trustee, representative or agent
for the holders of the Senior Indebtedness or the holders of at
least a majority in principal amount of the Senior Indebtedness
then outstanding of such default and acceleration, and such default
shall not have been cured or waived by or on behalf of the holders
of such Senior Indebtedness.
(c) If, notwithstanding the foregoing provision
prohibiting such payment or distribution, the Trustee or any Holder
shall have received any payment on account of the principal of or
interest on the Debentures (other than as permitted by subsections
(a) and (b) of this Section 10.02) when such payment is prohibited
by this Section 10.02 and before all amounts payable on, under or
in connection with Senior Indebtedness are paid in full in cash or
cash equivalents, then and in such event (subject to the provisions
of Section 10.08) such payment or distribution shall be received
and held in trust for the holders of Senior Indebtedness and shall
41
be paid over or delivered first to the holders of the Senior
Indebtedness remaining unpaid to the extent necessary to pay such
Senior Indebtedness in full in cash or cash equivalents.
Upon any payment or distribution of assets or securities
referred to in this Article 10, the Trustee and the Holders shall
be entitled to rely upon any order or decree of a court of
competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, and upon a
certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making any such payment or
distribution, delivered to the Trustee for the purpose of
ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 10.
SECTION 10.03 PAYMENTS WHICH MAY BE MADE PRIOR TO NOTICE.
-------------------------------------------
Nothing in this Article 10 or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions
described in Section 10.02 hereof, from making payments of
principal of and interest on the Debentures or from depositing with
the Trustee any monies for such payments, or (ii) the application
by the Trustee of any monies deposited with it for the purpose of
making such payments of principal of and interest on the
Debentures, to the Holders entitled thereto, unless at least one
day prior to the date when such payment would otherwise (except for
the prohibitions contained in Section 10.02 hereof) become due and
payable, the Trustee shall have received the written notice
provided for in Section 10.02(b)(ii) hereof.
SECTION 10.04 RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS NOT TO BE
--------------------------------------------------
IMPAIRED.
---------
No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at
any time or in any way be prejudiced or impaired by any act or
failure to act in good faith by any such holder, or by any
noncompliance by the Company with the terms and provisions and
covenants herein regardless of any knowledge thereof any such
holder may have or otherwise be charged with.
The provisions of this Article 10 are intended to be for
the benefit of, and shall be enforceable directly by, the holders
of Senior Indebtedness.
42
Notwithstanding anything to the contrary in this Article
10, to the extent any Holders or the Trustee have paid over or
delivered to any holder of Senior Indebtedness any payment or
distribution received on account of the principal of, or interest
on the Debentures to which any other holder of Senior Indebtedness
shall be entitled to share in accordance with Section 10.02 hereof,
no holder of Senior Indebtedness shall have a claim or right
against any Holders or the Trustee with respect to any such payment
or distribution or as a result of the failure to make payments or
distributions to such other holder of Senior Indebtedness.
SECTION 10.05 TRUSTEE MAY TAKE ACTION TO EFFECTUATE SUBORDINATION.
----------------------------------------------------
Each Holder by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate, as between the holders of
Senior Indebtedness and such Holders, the subordination as provided
in this Article 10 and appoints the Trustee his attorney-in-fact
for any and all such purposes.
SECTION 10.06 SUBROGATION.
------------
Upon the payment in full, in cash or cash equivalents, of
all Senior Indebtedness, any Holder shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive
payments or distributions of assets of the Company made on such
Senior Indebtedness until the Debentures shall be paid in full; and
for the purposes of such subrogation, no payments or distributions
to holders of such Senior Indebtedness of any cash, property or
securities to which such Holders of the Debentures would be
entitled except for this Article 10, and no payment pursuant to
this Article 10 to holders of such Senior Indebtedness by such
Holders of the Debentures, shall, as between the Company, its
creditors other than holders of such Senior Indebtedness and such
Holders of the Debentures, be deemed to be a payment by the Company
to or on account of such Senior Indebtedness, it being understood
that the provisions of this Article 10 are solely for the purpose
of defining the relative rights of the holders of such Senior
Indebtedness, on the one hand, and such Holders of the Debentures,
on the other hand.
If any payment or distribution to which such Holders of
the Debentures would otherwise have been entitled but for the
provisions of this Article 10 shall have been applied, pursuant to
this Article 10, to the payment of all Senior Indebtedness, then
and in such case, such Holders of the Debentures shall be entitled
to receive from the holders of such Senior Indebtedness at the time
outstanding any payments or distributions received by such holders
43
of Senior Indebtedness in excess of the amount sufficient to pay,
in cash or cash equivalents, all such Senior Indebtedness in full.
SECTION 10.07 OBLIGATIONS OF COMPANY UNCONDITIONAL;
-------------------------------------
REINSTATEMENT.
--------------
Nothing in this Article 10, or elsewhere in this
Indenture or in any Debenture, is intended to or shall impair, as
between the Company and Holders of the Debentures, the obligations
of the Company, which are absolute and unconditional, to pay to
such Holders the principal of, and interest on, the Debentures as
and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights
of such Holders of the Debentures and creditors of the Company
other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee, the Special
Representative or any Holder from exercising all remedies otherwise
permitted by applicable law upon Default under this Indenture,
subject to the rights, if any, under this Article 10 of the holders
of such Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such
remedy.
The failure to make a scheduled payment of principal of,
or interest on, the Debentures by reason of Section 10.02 shall not
be construed as preventing the occurrence of an Event of Default
under Section 6.01 hereof; provided, however, that if (i) the
conditions preventing the making of such payment no longer exist,
and (ii) such Holders of the Debentures are made whole with respect
to such omitted payments, the Event of Default relating thereto
(including any failure to pay any accelerated amounts) shall be
automatically waived, and the provisions of the Indenture shall be
reinstated as if no such Event of Default had occurred.
SECTION 10.08 TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED
--------------------------------------------------
IN ABSENCE OF NOTICE.
---------------------
The Trustee or Paying Agent shall not be charged with the
knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee or Paying Agent, unless
and until the Trustee or Paying Agent shall have received written
notice thereof from the Company or one or more holders of Senior
Indebtedness or from any trustee or agent therefor or unless the
Trustee or Paying Agent otherwise had actual knowledge thereof;
and, prior to the receipt of any such written notice or actual
knowledge, the Trustee or Paying Agent may conclusively assume that
no such facts exist.
44
Unless at least one day prior to the date when by the
terms of this Indenture any monies are to be deposited by the
Company with the Trustee or any Paying Agent for any purpose
(including, without limitation, the payment of the principal or the
interest on any Debenture), the Trustee or Paying Agent shall,
except where no notice is necessary or where notice is deemed given
in Sections 10.02 and 10.03 hereof, have received with respect to
such monies the notice provided for in the preceding sentence, the
Trustee or Paying Agent shall have full power and authority to
receive and apply such monies to the purpose for which they were
received. Neither of them shall be affected by any notice to the
contrary, which may be received by either on or after such date.
The foregoing shall not apply to the Paying Agent if the Company is
acting as Paying Agent. Nothing in this Section 10.08 shall limit
the right of the holders of Senior Indebtedness to recover payments
as contemplated by Section 10.02 hereof. The Trustee or Paying
Agent shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself or itself to be a holder of
such Senior Indebtedness (or a trustee on behalf of, or other
representative of, such holder) to establish that such notice has
been given by a holder of such Senior Indebtedness or a trustee or
representative on behalf of any such holder. The Trustee shall not
be deemed to have any duty to the holders of Senior Indebtedness.
SECTION 10.09 RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS.
---------------------------------------------
The Trustee and any Paying Agent shall be entitled to all
of the rights set forth in this Article 10 in respect of any Senior
Indebtedness at any time held by them to the same extent as any
other holder of such Senior Indebtedness, and nothing in this
Indenture shall be construed to deprive the Trustee or any Paying
Agent of any of its rights as such holder.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 TRUST INDENTURE ACT CONTROLS.
-----------------------------
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by operation of subsection (c) of
Section 318 of the TIA, the imposed duties shall control. The
provisions of Sections 310 to 317, inclusive, of the TIA that
impose duties on any Person (including provisions automatically
deemed included in an indenture unless the indenture provides that
such provisions are excluded) are a part of and govern this
Indenture, except as, and to the extent, they are expressly
excluded from this Indenture, as permitted by the TIA.
45
SECTION 11.02 NOTICES.
--------
Any notice or communication shall be in writing and
delivered in person or mailed by first-class mail, postage prepaid,
addressed as follows:
if to the Company:
PECO Energy Company
2301 Market Street
P.O. Box 8699
Philadelphia, Pennsylvania 19101
Attention: Todd D. Cutler, Esq.
Facsimile No.: (215) 841-5743
if to the Trustee:
Meridian Trust Company
35 North 6th Street
P.O. Box 15111
Reading, Pennsylvania 19612-5111
Attn: Corporate Trust Administration
The Company or the Trustee, by giving notice to the
other, may designate additional or different addresses for
subsequent notices of communications. The Company shall notify the
holder, if any, of Senior Indebtedness of any such additional or
different addresses of which the Company receives notice from the
Trustee.
Any notice or communication given to a Debentureholder
other than PECO Energy Capital shall be mailed to the
Debentureholder at the Debentureholder's address as it appears on
the Register of the Registrar and shall be sufficiently given if
mailed within the time prescribed.
Failure to mail a notice or communication to a
Debentureholder or any defect in it shall not affect its
sufficiency with respect to other Debentureholders. If a notice or
communication is mailed in the manner provided above, it is duly
given, whether or not received by the addressee.
If the Company mails a notice or communication to the
Debentureholders, it shall mail a copy to the Trustee and each
Registrar, Paying Agent or co-Registrar.
SECTION 11.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
--------------------------------------------
Debentureholders may communicate, pursuant to TIA Section
312(b), with other Debentureholders with respect to their rights
46
under this Indenture or the Debentures. The Company, the Trustee,
the Registrar, the Paying Agent and anyone else shall have the
protection of TIA Section 312(c).
SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
---------------------------------------------------
Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officer's Certificate (complying with Section
11.05 hereof) stating that, in the opinion of such Officer, all
conditions precedent to the taking of such action have been
complied with; and
(2) if appropriate, an Opinion of Counsel (complying
with Section 11.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent to the taking of such action
have been complied with.
SECTION 11.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
----------------------------------------------
Each Officer's Certificate and Opinion of Counsel with
respect to compliance with a covenant or condition provided for in
this Indenture shall include:
(1) a statement that each Person making such Officer's
Certificate or Opinion of Counsel has read such covenant or
condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such Officer's Certificate or Opinion of Counsel are
based;
(3) a statement that, in the opinion of each such
Person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied with;
and
(4) a statement that, in the opinion of such Person,
such covenant or condition has been complied with; provided,
however, that with respect to matters of fact not involving any
legal conclusion, an Opinion of Counsel may rely on an Officer's
Certificate or certificates of public officials.
47
SECTION 11.06 SEVERABILITY CLAUSE.
--------------------
If any provision in this Indenture or in the Debentures
shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 11.07 RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR.
---------------------------------------------
The Trustee may make reasonable rules for action by or a
meeting of Debentureholders. The Registrar and Paying Agent may
make reasonable rules for their functions.
SECTION 11.08 LEGAL HOLIDAYS.
---------------
A "Legal Holiday" is any day other than a Business Day.
If any specified date (including a date for giving notice) is a
Legal Holiday, the action to be taken on such date shall be taken
on the next succeeding day that is not a Legal Holiday, and if such
action is a payment in respect of the Debentures, no principal or
interest installment shall accrue for the intervening period;
except that if any interest payment is due on a Legal Holiday and
the next succeeding day is in the next succeeding calendar year,
such payment shall be made on the Business Day immediately
preceding such Legal Holiday.
SECTION 11.09 GOVERNING LAW.
--------------
This Indenture and the Debentures shall be governed by
and construed in accordance with the laws of the Commonwealth of
Pennsylvania as applied to contracts made and performed within the
Commonwealth of Pennsylvania, without regard to its principles of
conflicts of laws.
SECTION 11.10 NO RECOURSE AGAINST OTHERS.
---------------------------
No director, officer, employee or stockholder, as such,
of the Company shall have any liability for any obligations of the
Company under the Debentures or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their
creation. By accepting a Debenture, each Debentureholder shall
waive and release all such liability. The waiver and release shall
be part of the consideration for the issue of the Debentures.
48
SECTION 11.11 SUCCESSORS.
-----------
All agreements of the Company in this Indenture and the
Debentures shall bind its successors and assigns. All agreements of
the Trustee in this Indenture shall bind its successors and
assigns.
SECTION 11.12 MULTIPLE ORIGINAL COPIES OF THIS INDENTURE.
-------------------------------------------
The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. Any signed copy shall be
sufficient proof of this Indenture.
SECTION 11.13 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
----------------------------------------------
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or any Subsidiary.
Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 11.14 TABLE OF CONTENTS; HEADINGS, ETC.
---------------------------------
The Table of Contents, Cross-Reference Table, and
headings of the Articles and Sections of this Indenture have been
inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
SECTION 11.15 BENEFITS OF THE INDENTURE.
--------------------------
Except as expressly provided in Article 10 hereof,
nothing in this Indenture or in the Debentures, express or implied,
shall give to any person, other than the parties hereto and their
successors hereunder, the Holders and the Special Representative,
any benefit or any legal or equitable right, remedy or claim under
this Indenture.
49
SIGNATURES
IN WITNESS WHEREOF, the undersigned, being duly
authorized, have executed this Indenture on behalf of the
respective parties hereto as of the date first above written.
PECO ENERGY COMPANY
By: __________________________
Name: ________________________
Title: _______________________
MERIDIAN TRUST COMPANY,
AS TRUSTEE
By: __________________________
Name: ________________________
Title: ________________________
PECO Energy Capital, L.P.
By its General Partner,
PECO Energy Capital Corp.
By _____________________
Solely for the purposes stated
in the recitals hereto.
50
EXHIBIT A
[FORM OF FACE OF DEBENTURE]
__% SUBORDINATED DEBENTURES, SERIES A DUE 2043
No. _______________ $___________
PECO Energy Company, a Pennsylvania corporation (the "Company"),
which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to
pay to ___________________________ or registered assigns, the
principal sum of __________________ Dollars on _____________, 2043,
and to pay interest on said principal sum from _____________, 1994
or from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly
provided for, monthly in arrears on the last day of each calendar
month of each year commencing ___________, 1994 at the rate of
______% per annum plus Additional Interest, if any, until the
principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (to the extent that
payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum.
The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year of twelve 30-day months.
In the event that any date on which interest is payable on the
Series A Debentures is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on
the immediately preceding Business Day, in each case with the same
force and effect as if made on such date. The interest installment
so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid
to the person in whose name this Debenture is registered at the
close of business on the regular record date for such interest
installment, which shall be the close of business on the Business
Day next preceding such Interest Payment Date. Any such interest
installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered holders on such
regular record date, and may be paid to the person in whose name
this Debenture is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the registered
holders of this series of Debentures not less than 10 days prior to
such special record date, as more fully provided in the Indenture
hereinafter referred to. The principal of (and premium, if any)
and the interest on this Debenture shall be payable at the office
A-1
or agency of the Company maintained for that purpose in Reading,
Pennsylvania, in any coin or currency of the United States of
America which at the time of payment is legal tender for payment of
public and private debts; provided however, that payment of
interest may be made at the option of the Company by check mailed
to the registered holder at such address as shall appear in the
Debenture Register. Notwithstanding the foregoing, so long as the
holder of this Debenture is PECO Energy Capital, the payment of the
principal of (and premium, if any) and interest (including
Additional Interest, if any) in this Debenture will be made at such
place and to such account as may be designated by PECO Energy
Capital.
The indebtedness evidenced by this Debenture is, to the
extent provided in the Indenture, subordinate and subject in right
of payment to the prior payment in full of all Senior Indebtedness,
and this Debenture is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Debenture, by
accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to acknowledge
or effectuate the subordination so provided and (c) appoints the
Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, hereby waives all notice
of the acceptance of the subordination provisions contained herein
and in the Indenture by each holder of Senior Indebtedness, whether
now outstanding or hereafter incurred, and waives reliance by each
such Holder upon said provisions.
This Debenture is one of a duly authorized series of
Debentures of the Company (herein sometimes referred to as the
"Series A Debentures"), specified in the Indenture, limited in
aggregate principal amount as specified in the Indenture, issued
under and pursuant to an Indenture dated as of ________, 1994 (the
"Indenture") executed and delivered between the Company and
Meridian Trust Company, as trustee (the "Trustee") to which
reference is made to the Indenture for a description of the rights,
limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the
Debentures. By the terms of the Indenture, debentures (the
"Debentures") are issuable in series which may vary as to amount,
date of maturity, rate of interest and in other respects as in the
Indenture provided.
The Series A Debentures are subject to mandatory
redemption prior to maturity at 100% of the principal amount
thereof plus accrued interest to the redemption date as follows:
(i) in whole upon the dissolution of PECO Energy
Capital; and
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(ii) in whole or in part upon a redemption of the
Series A Preferred Securities (as defined in the
Indenture), but if in part, in an aggregate
principal amount equal to the aggregate stated
liquidation preference of the Series A Preferred
Securities redeemed.
The Series A Debentures are subject to redemption prior
to maturity at any time on or after __________, 1999 at the option
of the Company, in whole or in part, at 100% of the principal
amount thereof plus accrued interest to the redemption date.
In the event of redemption of this Debenture in part
only, a new Debenture or Debentures of this series for the
unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the
Debentures may be declared, and upon such declaration shall become,
due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Debenture upon compliance
by the Company with certain conditions set forth therein.
Subject to certain exceptions in the Indenture which
require the consent of every Holder, (i) the Indenture or the
Series A Debentures may be amended with the written consent of the
Holders of a majority in aggregate principal amount of the Series
A Debentures at the time outstanding, and (ii) certain defaults or
noncompliance with certain provisions may be waived by the written
consent of the Holders of a majority in aggregate principal amount
of the Series A Debentures at the time outstanding. Subject to
certain exceptions in the Indenture, without the consent of any
Debentureholder, the Company and the Trustee may amend the
Indenture or the Debentures to cure any ambiguity, defect or
inconsistency, to bind a successor to the obligations of the
Indenture, to provide for uncertificated Debentures in addition to
certificated Debentures, to comply with any requirements of the
Debentures and Exchange Commission in connection with the
qualification of the Indenture under the TIA, or to make any change
that does not adversely affect the rights of any Debentureholder.
Amendments bind all Holders and subsequent Holders.
No reference herein to the Indenture and no provision of
this Debenture or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to
pay the principal of and premium, if any, and interest on this
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Debenture at the time and place and at the rate and in the money
herein prescribed.
The Company shall have the right at any time during the
term of the Series A Debentures, from time to time to extend the
interest payment period of such Debentures to up to 60 consecutive
months (the "Extended Interest Payment Period"), at the end of
which period the Company shall pay all interest then accrued and
unpaid (together with interest thereon at the rate specified for
the Series A Debentures to the extent that payment of such interest
is enforceable under applicable law); provided that, during such
Extended Interest Payment Period the Company shall not declare or
pay any dividend on, redeem or purchase any of its capital stock.
Prior to the termination of any such Extended Interest Payment
Period, the Company may further extend such Extended Interest
Payment Period, provided that such Period together with all such
further extensions thereof shall not exceed 60 consecutive months.
At the termination of any such Extended Interest Payment Period and
upon the payment of all accrued and unpaid interest and any
additional amounts then due, the Company may select a new Extended
Interest Payment period.
As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by
the registered holder hereof on the Debenture Register of the
Company, upon surrender of this Debenture for registration of
transfer at the office or agency of the Trustee accompanied by a
written instrument or instruments of transfer in form satisfactory
to the Company or the Trustee duly executed by the registered
holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations
and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service
charge will be made for any such transfer, but the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any
Debenture Registrar may deem and treat the registered holder hereof
as the absolute owner hereof (whether or not this Debenture shall
be overdue and notwithstanding any notice of ownership or writing
hereon made by anyone other than the Debenture Registrar) for the
purpose of receiving payment of or on account of the principal
hereof and premium, if any, and interest due hereon and for all
other purposes, and neither the Company nor the Trustee nor any
payment agent nor any Debenture Registrar shall be affected by any
notice to the contrary.
No recourse shall be had for the payment of the principal
of or the interest on this Debenture, or for any claim based
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hereon, or otherwise in respect hereof, or based on or in respect
of the Indenture, against any incorporator, stockholder, officer or
director, past, present or future, as such, of the Company or of
any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by
the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released. Debentures of this
series so issued are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations
therein set forth, Debentures of this series are exchangeable for
a like aggregate principal amount of Debentures of this series of
a different authorized denomination, as requested by the Holder
surrendering the same.
All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the
Indenture.
This Debenture shall not be valid until an authorized
officer of the Trustee manually signs the Trustee's Certificate of
Authentication below.
IN WITNESS WHEREOF, the Company has caused this Debenture
to be signed manually or by facsimile by its duly authorized
officers and a facsimile of its corporate seal to be affixed hereto
or imprinted hereon.
PECO ENERGY COMPANY
By: __________________________
Name: ________________________
Title: _______________________
Dated: _____________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE DEBENTURES REFERRED
TO IN THE WITHIN-MENTIONED INDENTURE.
MERIDIAN TRUST COMPANY
By: __________________________
Name
______________________________
Authorized Signatory
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ASSIGNMENT FORM
To assign this Debenture, fill in the form below: (I) or
(we) assign and transfer this Debenture to:
__________________________________________________________________
(Insert assignee's social security or tax I.D. number)
___________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ______________________________ agent to
transfer this Debenture on the books of the Company. The agent may
substitute another to act for him.
Dated: ________________ Signature: ________________________
(Sign exactly as your name appears
on the other side of this Debenture)
Signature Guaranty: ________________________
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