<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 3, 1997
333-______________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------
<TABLE>
<CAPTION>
COMMONWEALTH EDISON COMPANY ComEd FINANCING II
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS TRUST AGREEMENT)
<S> <C>
ILLINOIS DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
4911 6719
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
36-0938600 52-6839466
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
10 South Dearborn Street -- 37th Floor c/o Commonwealth Edison Company
Post Office Box 767 10 South Dearborn Street -- 37th Floor
Chicago, Illinois 60690-0767 Chicago, Illinois 60690-0767
(312) 394-4321 (312) 394-4321
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL
EXECUTIVE OFFICES)
John C. Bukovski WITH COPIES OF NOTICES TO
Vice President Richard W. Astle Susan E. Cremin
Commonwealth Edison Company Sidley & Austin Winston & Strawn
10 South Dearborn Street -- 37th Floor One First National Plaza 35 West Wacker Drive
Post Office Box 767 Chicago, Illinois 60603 Chicago, Illinois 60601
Chicago, Illinois 60690-0767 (312) 853-7270 (312) 558-5805
(312) 394-3117
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE OF EACH REGISTRANT)
</TABLE>
----------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement. If the
securities being registered on this Form are being offered in connection with
the formation of a holding company and there is compliance with General
Instruction G, please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Each Class of Securities Amount To Be Offering Price Per Aggregate Offering Amount Of
To be Registered Registered Per Unit (1) Price (1) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Series B Capital Securities of ComEd Financing II... $150,000,000 100% $150,000,000 $45,455
- ------------------------------------------------------------------------------------------------------------------------------------
Series B Subordinated Deferrable Interest Debentures
of Commonwealth Edison Company (2)................. -- -- -- N/A
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Commonwealth Edison Company Guarantee with
respect to Capital Securities (3) (4).............. -- -- -- N/A
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Total .............................................. $150,000,000(5) 100% $150,000,000(5) $45,455
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</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) The Series A Subordinated Deferrable Interest Debentures issued by
Commonwealth Edison Company on January 24, 1997 were originally purchased by
ComEd Financing II with the proceeds of the sale of the Series A Capital
Securities issued by ComEd Financing II on January 24, 1997. No separate
consideration will be received for the Series B Subordinated Deferrable
Interest Debentures of Commonwealth Edison Company covered hereby (the
"Subordinated Debentures") distributed upon any liquidation of ComEd
Financing II.
(3) No separate consideration will be received for the Commonwealth Edison
Company Guarantee.
(4) This Registration Statement is deemed to cover the Subordinated Debentures,
the rights of holders of Subordinated Debentures under the Indenture related
thereto, the rights of holders of Series B Capital Securities of ComEd
Financing II under a Trust Agreement, the rights of holders of the Series B
Capital Securities under the Guarantee and certain backup undertakings as
described herein.
(5) Such amount represents the initial public offering price of the ComEd
Financing II Series B Capital Securities to be exchanged hereunder and the
principal amount of Subordinated Debentures that may be distributed to
holders of Series B Capital Securities upon any liquidation of ComEd
Financing II.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JUNE 3, 1997
PROSPECTUS
COMED FINANCING II
OFFER TO EXCHANGE ITS 8.50% SERIES B CAPITAL SECURITIES
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING 8.50% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER SERIES B CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
COMMONWEALTH EDISON COMPANY
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON _________________, 1997, UNLESS EXTENDED.
ComEd Financing II, a trust created under the laws of the State of Delaware
(the "Trust"), hereby offers, upon the terms and subject to the conditions
set forth in this Prospectus (as the same may be amended or supplemented
from time to time, the "Prospectus") and in the accompanying Letter of
Transmittal (which together constitute the "Exchange Offer"), to exchange
up to $150,000,000 aggregate Liquidation Amount of its 8.50% Series B
Capital Securities (the "New Capital Securities") which have been
registered under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to a Registration Statement (as defined under "Available
Information") of which this Prospectus constitutes a part, for a like
aggregate Liquidation Amount of its outstanding 8.50% Series A Capital
Securities (the "Old Capital Securities"), of which $150,000,000 aggregate
Liquidation Amount is outstanding. Pursuant to the Exchange Offer,
Commonwealth Edison Company, an Illinois corporation (the "Company" or
"ComEd"), will exchange its guarantee of the payment of Distributions and
payments on liquidation or redemption of the Old Capital Securities (the
"Old Guarantee") for a like guarantee of the New Capital Securities (the
"New Guarantee") and all of its 8.50% Series A Subordinated Deferrable
Interest Debentures due January 15, 2027 (the "Old Subordinated
Debentures"), of which $154,640,000 aggregate principal amount is
outstanding, for a like aggregate principal amount of its 8.50% Series B
Subordinated Deferrable Interest Debentures due January 15, 2027 (the "New
Subordinated Debentures"), which New Guarantee and New Subordinated
Debentures also have been registered under the Securities Act. The Old
Capital Securities, the Old Guarantee and the Old Subordinated Debentures
are collectively referred to herein as the "Old Securities" and the New
Capital Securities, the New Guarantee and the New Subordinated Debentures
are collectively referred to herein as the "New Securities."
The forms and terms of the New Securities are identical in all material
respects to the respective forms and terms of the Old Securities, except
that the New Securities have been registered under the Securities Act and
therefore will not be subject to certain restrictions on transfer
applicable to the Old Securities. See "Description of Securities" and
"Description of Old Securities." The New Capital Securities are being
offered for exchange, and the New Guarantee and New Subordinated Debentures
will be exchanged, in order to satisfy certain obligations of the Company
and the Trust under a Registration Rights Agreement dated as of January 24,
1997 (the "Registration Rights Agreement"), among the Company, the Trust
and the Initial Purchasers (as defined herein). In the event that the
Exchange Offer is consummated, any Old Capital Securities that remain
outstanding and the New Capital Securities issued in the Exchange Offer
will vote together as a single class for purposes of determining whether
holders of the requisite percentage in outstanding Liquidation Amount
thereof have taken certain actions or exercised certain rights under the
Amended and Restated Trust Agreement of the Trust. In the event the
Exchange Offer is consummated, (i) the New Guarantee will apply to any Old
Capital Securities that remain outstanding and to any New Capital
Securities issued in the Exchange Offer, (ii) the Old Subordinated
Debentures will be retired and canceled and (iii) the
<PAGE>
New Subordinated Debentures will be issued to Wilmington Trust Company, as
Property Trustee under the Trust.
------------------------
SEE "RISK FACTORS" COMMENCING ON PAGE 17 FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED BY HOLDERS WHO TENDER OLD CAPITAL SECURITIES IN THE
EXCHANGE OFFER.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is _________________, 1997.
-2-
<PAGE>
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on _________________, 1997 (such time on such date
being hereinafter called the "Expiration Date"), unless the Exchange Offer is
extended by the Company and the Trust (in which case the term "Expiration Date"
shall mean the latest date and time to which the Exchange Offer is extended).
Tenders of Old Capital Securities may be withdrawn at any time on or prior to
the Expiration Date. The Exchange Offer is not conditioned upon any minimum
Liquidation Amount of Old Capital Securities being tendered for exchange.
However, the Exchange Offer is subject to certain conditions which may be waived
by the Company and the Trust in their reasonable discretion and to the terms and
provisions of the Registration Rights Agreement. Old Capital Securities may be
tendered for exchange in whole or in part having a Liquidation Amount of $1,000
(1 Old Capital Security) or any integral multiple in excess thereof, provided
that if any Old Capital Securities are tendered for exchange in part, the
untendered aggregate Liquidation Amount thereof must be $100,000 (100 Old
Capital Securities) or any integral multiple of $1,000 (1 Old Capital Security)
in excess thereof. The Company has agreed to pay all expenses of the Trust,
including expenses related to the Exchange Offer. See "The Exchange Offer--Fees
and Expenses." Each New Capital Security will accumulate Distributions from the
most recent Distribution Date (as defined in "Description of Securities--
Description of Capital Securities--Distributions") on the Old Capital Securities
surrendered in exchange for such New Capital Securities or, if no Distributions
have been paid or provided for on such Old Capital Securities, from January 24,
1997. As a result, holders of Old Capital Securities that are accepted for
exchange will not receive accumulated Distributions on such Old Capital
Securities for any period from and after the most recent Distribution Date on
such Old Capital Securities or, if no Distributions have been paid or provided
for on such Old Capital Securities, from and after January 24, 1997, and such
holders will be deemed to have waived the right to receive any Distributions on
such Old Capital Securities. This Prospectus, together with the Letter of
Transmittal, is being sent to all registered holders of Old Capital Securities
as of ______________, 1997.
Neither the Company nor the Trust will receive any cash or other proceeds
from the issuance of the New Capital Securities offered hereby. No dealer-
manager is being used in connection with this Exchange Offer. See "Use of
Proceeds From the Sale of the Old Capital Securities" and "Plan of
Distribution."
As the context may require, unless expressly stated otherwise, (i) the
Exchange Offer is consummated, the New Capital Securities, (ii) "Subordinated
Debentures" means the Old Subordinated Debentures and, in the event the Exchange
Offer is consummated, the New Subordinated Debentures, (iii) "Guarantee" means
the Old Guarantee and, in the event the Exchange Offer is consummated, the New
Guarantee and (iv) "Securities" means the Old Securities and, in the event the
Exchange Offer is consummated, the New Securities. In addition, as used herein,
(i) the "Indenture" means the Indenture dated as of September 1, 1995, as
amended and supplemented from time to time, between the Company and Wilmington
Trust Company, as trustee (the "Debenture Trustee"), (ii) the "Trust Agreement"
means the Amended and Restated Trust Agreement dated as of January 24, 1997
relating to the Trust among the Company, as Sponsor, Wilmington Trust Company,
as Property Trustee (the "Property Trustee") and as Delaware Trustee (the
"Delaware Trustee"), the Administrative Trustees named therein (the
"Administrative Trustees" and, collectively with the Property Trustee and
Delaware Trustee, the "ComEd Trustees") and the holders, from time to time, of
the Capital Securities, and (iii) the "Guarantee Agreement" means the Series A
Capital Securities Guarantee Agreement dated as of January 24, 1997 (the "Old
Guarantee Agreement") between the Company and Wilmington Trust Company, as
trustee (the "Guarantee Trustee"), and, in the event the Exchange Offer is
consummated, the Series B Capital Securities Guarantee Agreement to be entered
into between the Company and the Guarantee Trustee (the "New Guarantee
Agreement") relating to the Old Guarantee and the New Guarantee, respectively.
The Capital Securities represent undivided beneficial interests in the
assets of the Trust. The Company is the owner of all of the beneficial interests
represented by common securities of the Trust (the "Common Securities" and,
collectively with the Capital Securities, the "Trust Securities"). Wilmington
Trust Company is the Property Trustee. The Trust exists for the sole purpose of
issuing the Trust Securities and investing the proceeds thereof in the
Subordinated Debentures. The Subordinated Debentures mature on January 15, 2027
-3-
<PAGE>
(the "Stated Maturity Date"). The Capital Securities have a preference over the
Common Securities under certain circumstances with respect to cash distributions
and amounts payable on liquidation, redemption or otherwise. See "Description of
Securities--Description of Capital Securities--Subordination of Common
Securities."
Holders of the Capital Securities and the Common Securities are entitled to
receive preferential cumulative cash distributions arising from the payment of
interest on the Subordinated Debentures accumulating from January 24, 1997 and
payable semi-annually in arrears on the 15th day of January and July of each
year, commencing July 15, 1997, at the annual rate of 8.50% of the Liquidation
Amount of $1,000 per Capital Security and at the annual rate of 8.50% of the
Liquidation Amount of $1,000 per Trust Security ("Distributions"). The Company
has the right to defer payments of interest on the Subordinated Debentures at
any time or from time to time for a period not exceeding 10 consecutive semi-
annual periods with respect to each deferral period (each, an "Extension
Period"), provided that no Extension Period may extend beyond the Stated
Maturity Date. Upon the termination of any such Extension Period and the payment
of all amounts then due, the Company may elect to begin a new Extension Period,
subject to the requirements set forth herein. If and for so long as interest
payments on the Subordinated Debentures are so deferred, Distributions on the
Trust Securities will also be deferred and the Company will not be permitted,
subject to certain exceptions described herein, to declare or pay any cash
distributions with respect to the Company's capital stock (which includes
common, preference and preferred stock) or to make any payment with respect to
debt securities of the Company that rank pari passu with or junior to the
Subordinated Debentures. During an Extension Period, interest on the
Subordinated Debentures will continue to accrue (and the amount of Distributions
to which holders of the Capital Securities are entitled will continue to
accumulate) at the rate of 8.50% per annum, compounded semi-annually, and
holders of Trust Securities will be required to accrue interest income for
United States federal income tax purposes. See "Description of Securities--
Description of Subordinated Debentures--Option to Extend Interest Payment Date"
and "Certain Federal Income Tax Consequences--Interest Income and Original Issue
Discount."
The Company has, through the Guarantee, the Guarantee Agreement, the Trust
Agreement, the Subordinated Debentures and the Indenture, taken together, fully,
irrevocably and unconditionally guaranteed on a subordinated basis all of the
Trust's obligations under the Old Capital Securities and the New Capital
Securities. The combined operation of these documents provides a full,
irrevocable and unconditional guarantee of the Trust's obligations under the Old
Capital Securities and the New Capital Securities. See "Relationship Among the
Capital Securities, the Subordinated Debentures and the Guarantee--Full and
Unconditional Guarantee." The Guarantee of the Company guarantees the payment of
Distributions and payments on liquidation or redemption of the Capital
Securities, but in each case only to the extent that the Trust holds funds on
hand legally available therefor and has failed to make such payments, as
described herein. See "Description of Securities--Description of Guarantee." If
the Company fails to make a requested payment on the Subordinated Debentures,
the Trust will not have sufficient funds to make the related payments, including
Distributions, on the Capital Securities. The Guarantee does not cover any such
payment when the Trust does not have sufficient funds on hand legally available
therefor. In the event of a Debenture Event of Default (as defined in
"Description of Securities--Description of Subordinated Debentures--Debenture
Events of Default") under the Indenture, a holder of Capital Securities may
institute a legal proceeding directly against the Company to enforce its rights
in respect of such payment. See "Description of Securities--Description of
Subordinated Debentures--Enforcement of Certain Rights By Holders of Capital
Securities." The obligations of the Company under the Guarantee and the
Subordinated Debentures are subordinate and junior in right of payment to all
Senior Indebtedness (as defined in "Description of Securities--Description of
Subordinated Debentures--Subordination") of the Company, which was approximately
$7,072 million at March 31, 1997.
The Trust Securities are subject to mandatory redemption in a Like Amount
(as defined under "Description of Securities--Description of Capital
Securities--Redemption"), (i) in whole but not in part, on the Stated Maturity
Date upon repayment of the Subordinated Debentures at a redemption price equal
to the
-4-
<PAGE>
principal amount of, plus accrued interest on, the Subordinated Debentures (the
"Maturity Redemption Price"), (ii) in whole but not in part, at any time prior
to January 15, 2007, contemporaneously with the optional prepayment of the
Subordinated Debentures, upon the occurrence and continuation of a Tax Event (as
defined under "Description of Securities--Description of Subordinated
Debentures--Tax Event Prepayment") at a redemption price equal to the Tax Event
Prepayment Price (as defined below) (the "Tax Event Redemption Price"), and
(iii) in whole or in part, on or after January 15, 2007, contemporaneously with
the optional prepayment by the Company of the Subordinated Debentures, at a
redemption price equal to the Optional Prepayment Price (as defined below) (the
"Optional Redemption Price"). Any of the Maturity Redemption Price, the Tax
Event Redemption Price and the Optional Redemption Price may be referred to
herein as the "Redemption Price." See "Description of Securities--Description of
Capital Securities--Redemption." The Subordinated Debentures are prepayable
prior to the Stated Maturity Date at the option of the Company (i) on or after
January 15, 2007, in whole or in part, at a prepayment price (the "Optional
Prepayment Price") equal to 104.250% of the principal amount thereof on January
15, 2007, declining ratably on each January 15 thereafter to 100% on or after
January 15, 2017, plus accrued interest thereon to the date of prepayment, or
(ii) at any time prior to January 15, 2007, in whole but not in part, upon the
occurrence and continuation of a Tax Event, at a prepayment price (the "Tax
Event Prepayment Price") equal to the greater of (a) 100% of the principal
amount thereof or (b) the sum, as determined by a Quotation Agent (as defined
under "Description of Securities--Description of Subordinated Debentures--Tax
Event Prepayment") of the present values of the principal amount and premium
payable as part of the prepayment price with respect to an optional prepayment
of such Subordinated Debentures on January 15, 2007, together with scheduled
payments of interest accruing from the prepayment date to January 15, 2007, in
each case, discounted to the prepayment date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate
(as defined under "Description of Securities--Description of Subordinated
Debentures--Tax Event Prepayment") plus, in either case accrued interest thereon
to the date of prepayment. Either of the Optional Prepayment Price or the Tax
Event Prepayment Price may be referred to herein as the "Prepayment Price." See
"Description of Securities--Description of Subordinated Debentures--Optional
Prepayment" and "--Tax Event Prepayment."
The Company has the right at any time to terminate the Trust and cause the
Subordinated Debentures to be distributed to the holders of the Capital
Securities in liquidation of the Trust, subject to the Company having received
an opinion of counsel to the effect that holders of the Capital Securities will
not recognize gain or loss for United States federal income tax purposes as a
result of the dissolution of the Trust and the distribution of the Subordinated
Debentures. Unless the Subordinated Debentures are distributed to the holders of
the Trust Securities, in the event of a liquidation of the Trust as described
herein, after satisfaction of liabilities to creditors of the Trust as required
by applicable law, the holders of the Capital Securities generally will be
entitled to receive a Liquidation Amount of $1,000 per Capital Security plus
accumulated Distributions thereon to the date of payment. See ''Description of
Securities--Description of Capital Securities--Liquidation of the Trust and
Distribution of Subordinated Debentures'' and "Certain Federal Income Tax
Consequences--Distribution of Subordinated Debentures to Holders of Capital
Securities."
The Trust is making the Exchange Offer for the Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance of
the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other transactions.
Based on these interpretations by the staff of the Division of Corporation
Finance, and subject to the conditions described herein, the Company and the
Trust believe that a holder of Old Capital Securities (other than a holder who
is (a) a broker-dealer who purchased the Old Capital Securities directly from
the Trust to resell pursuant to Rule 144A or any other available exemption under
the Securities Act, (b) a person participating in the distribution of the Old
Capital Securities or (c) a person who is an "affiliate" of the Company or the
Trust) who exchanges Old Capital Securities in the Exchange Offer for New
Capital Securities and then resells such New Capital Securities will be viewed
by the staff no differently than a non-affiliated purchaser of registered
securities who purchases such securities in a registered primary offering of
securities and, after completion of such registered offering, may resell the New
Capital Securities without further compliance with the registration and
prospectus
-5-
<PAGE>
delivery requirements of the Securities Act, provided that such New Capital
Securities are acquired in the ordinary course of such holder's business and
that such holder is not participating, and has no arrangement or understanding
with any person to participate, in a distribution (within the meaning of the
Securities Act) of such New Capital Securities. Subject to the conditions
described herein, the Company and the Trust also believe that a broker-dealer
may participate in the Exchange Offer with respect to Old Capital Securities
acquired for its own account as a result of market-making activities or other
trading activities, provided that in connection with any resales of New Capital
Securities received in exchange for such Old Capital Securities, such broker-
dealer delivers a prospectus meeting the requirements of the Securities Act,
which may be this Prospectus. See "The Exchange Offer--Resales of New Capital
Securities" and "Plan of Distribution."
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Old Capital Securities. The New Capital Securities
will be a new issue of securities for which there currently is no market.
Although Merrill Lynch, Pierce, Fenner & Smith Incorporated, PaineWebber
Incorporated and Salomon Brothers Inc, the initial purchasers of the Old Capital
Securities (the "Initial Purchasers"), have advised the Company and the Trust
that they currently intend to make a market in the New Capital Securities, the
Initial Purchasers are not obligated to do so, and any market-making activity
with respect to the New Capital Securities may be interrupted or discontinued at
any time without notice. Accordingly, no assurance can be given that an active
public or other market will develop for the New Capital Securities or as to the
liquidity of or the trading market for the New Capital Securities. The Company
and the Trust will not apply for listing of the New Capital Securities on any
securities exchange or for quotation through the National Association of
Securities Dealers Automated Quotation System.
Any Old Capital Securities not tendered and accepted in the Exchange Offer
will remain outstanding and will be entitled to the same rights and will be
subject to the same limitations applicable thereto under the Trust Agreement
(except for those rights which terminate upon consummation of the Exchange
Offer). Following consummation of the Exchange Offer, the holders of any Old
Capital Securities that remain outstanding will continue to be subject to all of
the existing restrictions upon transfer thereof and neither the Company nor the
Trust will have any further obligation to such holders (other than under certain
limited circumstances) to provide for registration under the Securities Act of
the Old Capital Securities held by them. To the extent that Old Capital
Securities are tendered and accepted in the Exchange Offer, a holder's ability
to sell untendered Old Capital Securities could be adversely affected. See "Risk
Factors--Consequences of a Failure to Exchange Old Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS PROSPECTUS
AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO
TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
-------------------------
FOR NORTH CAROLINA INVESTORS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH
CAROLINA (THE "NORTH CAROLINA INSURANCE COMMISSIONER") NOR HAS THE NORTH
CAROLINA INSURANCE COMMISSIONER RULED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS.
-------------------------
-6-
<PAGE>
AVAILABLE INFORMATION
ComEd is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, information statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, information
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, and at the Commission's Regional Offices at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661,
and Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of
such material can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at
prescribed rates. Such reports, information statements and other information
concerning ComEd may also be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005, the Chicago Stock
Exchange, 440 South LaSalle Street, Chicago, Illinois 60604 and the Pacific
Stock Exchange, 301 Pine Street, San Francisco, California 94101, the securities
exchanges on which certain of ComEd's securities are listed. ComEd is also
subject to the electronic filing requirements of the Commission. Accordingly,
pursuant to the rules and regulations of the Commission, certain documents,
including annual and quarterly reports and information statements, filed by
ComEd with the Commission have been filed electronically. The Commission also
maintains a World Wide Web site that contains reports, proxy and information
statements and other information regarding registrants (including ComEd) that
file electronically with the Commission at (http://www.sec.gov.).
No separate financial statements of the Trust have been included herein.
ComEd and the Trust do not consider that such financial statements would be
material to holders of the Capital Securities because the Trust is a newly
formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any activity
other than holding as trust assets the Subordinated Debentures and issuing the
Trust Securities. See "ComEd Financing II" and "Description of Securities." In
addition, the Company does not expect that the Trust will file reports under the
Exchange Act with the Commission.
In connection therewith, ComEd represents the following:
(i) the Capital Securities will be presented on the consolidated
financial statements, along with the 8.48% Trust Originated Preferred
Securities issued by ComEd Financing I, as "Company-Obligated Mandatorily
Redeemable Preferred Securities of Subsidiary Trusts";
(ii) a footnote to the financial statements will disclose that the
sole assets of the Trust are the Company's $154,640,000 aggregate principal
amount of 8.50% Subordinated Deferrable Interest Debentures due January 15,
2027; and
(iii) it will include in an audited footnote to the consolidated
financial statements disclosure that (i) the Trust is wholly owned; (ii)
the sole assets of the Trust are the Company's $154,640,000 aggregate
principal amount of 8.50% Subordinated Deferrable Interest Debentures due
January 15, 2027; and (iii) the back-up guarantees, in the aggregate,
provide a full and unconditional guarantee of the Trust's obligations under
the Capital Securities.
This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by ComEd and the Trust with the Commission
under the Securities Act. This Prospectus does not contain all the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and reference is
hereby made to the
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<PAGE>
Registration Statement and to the exhibits relating thereto for further
information with respect to ComEd and the New Securities. Any statements
contained herein concerning the provisions of any document are not necessarily
complete, and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by ComEd with the Commission (File No. 1-
1839) are incorporated into this Prospectus by reference and made a part hereof:
(i) ComEd's Annual Report on Form 10-K for the year ended December
31, 1996 (the "1996 Form 10-K Report");
(ii) ComEd's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1997 (the "March 31, 1997 Form 10-Q Report"); and
(iii) ComEd's Current Reports on Form 8-K dated January 29, 1997,
January 31, 1997 (the "January 31, 1997 Form 8-K Report") and May 30, 1997
(the "May 30, 1997 Form 8-K Report").
All documents subsequently filed by ComEd pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering or offerings made by this Prospectus, shall be
deemed to be incorporated in this Prospectus by reference and to be a part
hereof from the respective dates of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
in this Prospectus shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained in this Prospectus or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference in this Prospectus modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. These documents are available upon request from
David A. Scholz, Secretary, Commonwealth Edison Company, 37th Floor, 10 South
Dearborn Street, Post Office Box 767, Chicago, IL 60690-0767 (telephone number
312/394-3126). In order to ensure timely delivery of the documents, any request
should be made by ____________, 1997.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein do not purport to be complete, and
where reference is made to the particular provisions of such contract or other
document, such provisions are qualified in all respects by reference to all of
the provisions of such contract or other document.
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<PAGE>
SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus or incorporated by reference
herein.
Commonwealth Edison Company
ComEd is engaged principally in the production, purchase, transmission,
distribution and sale of electricity to a diverse base of residential,
commercial, industrial and wholesale customers. ComEd's electric service
territory has an area of approximately 11,300 square miles and an estimated
population of approximately eight million as of March 31, 1997. It includes the
city of Chicago, an area of about 225 square miles with an estimated population
of approximately three million from which ComEd derived approximately one-third
of its ultimate consumer revenues in the twelve months ended March 31, 1997.
ComEd had approximately 3.4 million electric customers as of March 31, 1997.
ComEd's principal executive offices are located at 37th Floor, 10 South Dearborn
Street, Post Office Box 767, Chicago, IL 60690-0767, and its telephone number is
312/394-4321.
ComEd Financing II
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the Trust Agreement executed by ComEd, as Sponsor, Wilmington Trust
Company, as Property Trustee and as Delaware Trustee, and the two individual
Administrative Trustees named therein, and (ii) the filing of a certificate of
trust with the Delaware Secretary of State on November 20, 1996. The Trust's
business and affairs are conducted by the ComEd Trustees: the Property Trustee,
the Delaware Trustee, and the two individual Administrative Trustees who are
employees or officers of or affiliated with ComEd. The Trust exists for the
exclusive purposes of (i) issuing and selling the Trust Securities, (ii) using
the proceeds from the sale of the Common Securities and the Old Capital
Securities to acquire the Old Subordinated Debentures issued by ComEd, (iii)
exchanging the Old Subordinated Debentures for the New Subordinated Debentures
in the Exchange Offer pursuant to the Indenture and (iv) engaging in only those
other activities necessary, advisable or incidental thereto. Accordingly, the
Subordinated Debentures will be the sole assets of the Trust, and payments under
the Subordinated Debentures will be the sole revenue of the Trust. All of the
Common Securities are owned by ComEd.
The Exchange Offer
The Exchange Offer Up to $150,000,000 aggregate Liquidation Amount of New
Capital Securities are being offered in exchange for a
like aggregate Liquidation Amount of Old Capital
Securities. Old Capital Securities may be tendered for
exchange in whole or in part having a Liquidation
Amount of $1,000 (1 Old Capital Security) or any
integral multiple in excess thereof. ComEd and the
Trust are making the Exchange Offer in order to satisfy
their obligations under the Registration Rights
Agreement relating to the Old Securities. For a
description of the procedures for tendering Old Capital
Securities, see "The Exchange Offer--Procedures for
Tendering Old Capital Securities."
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<PAGE>
Expiration Date 5:00 p.m., New York City time, on
_____________, 1997 (such time on
such date being hereinafter called
the "Expiration Date") unless the
Exchange Offer is extended by ComEd
and the Trust (in which case the term
"Expiration Date" shall mean the
latest date and time to which the
Exchange Offer is extended). See
"The Exchange Offer--Expiration Date;
Extensions; Amendments."
Conditions to the The Exchange Offer is subject to
Exchange Offer certain conditions which may be
waived by ComEd and the Trust in
their reasonable discretion and to
the terms and conditions of the
Registration Rights Agreement. The
Exchange Offer is not conditioned
upon any minimum Liquidation Amount
of Old Capital Securities being
tendered for exchange. See "The
Exchange Offer--Conditions to the
Exchange Offer."
ComEd and the Trust expressly reserve
the right in their sole and absolute
discretion, subject to applicable
law, at any time and from time to
time, (i) to delay the acceptance of
the Old Capital Securities for
exchange, (ii) to terminate the
Exchange Offer (whether or not any
Old Capital Securities have been
accepted for exchange) if ComEd or
the Trust determines, in its
reasonable discretion, that any of
the conditions referred to under "The
Exchange Offer--Conditions to the
Exchange Offer" have occurred or
exist or have not been satisfied,
(iii) to extend the Expiration Date
and retain all Old Capital Securities
tendered pursuant to the Exchange
Offer, subject, however, to the right
of holders of Old Capital Securities
to withdraw their tendered Old
Capital Securities, and (iv) to waive
any condition or otherwise amend the
terms of the Exchange Offer in any
respect. See "The Exchange
Offer--Expiration Date; Extensions;
Amendments."
Procedures for Tendering Brokers, dealers, commercial banks,
Old Capital Securities trust companies and other nominees
who hold Old Capital Securities
through The Depository Trust Company
("DTC") may effect tenders by
book-entry transfer in accordance
with DTC's Automated Tender Offer
Program ("ATOP"). Holders of such
Old Capital Securities registered in
the name of a broker, dealer,
commercial bank, trust company or
other nominee are urged to contact
such person promptly if they wish to
tender Old Capital Securities. In
order for Old Capital Securities to
be tendered by a means other than by
book-entry transfer, a Letter of
Transmittal must be completed and
signed in accordance with the
instructions contained therein. The
Letter of Transmittal and any other
documents required by the Letter of
Transmittal must be delivered to
Wilmington Trust Company (the
"Exchange Agent") by mail, facsimile,
hand delivery or overnight carrier
and either such Old Capital
Securities must be delivered to the
Exchange Agent or specified
procedures for guaranteed delivery
must be complied with. See "The
Exchange Offer--Procedures for
Tendering Old Capital Securities."
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<PAGE>
Letters of Transmittal, certificates
for Old Capital Securities and any
other documents required by the
Letter of Transmittal should not be
delivered to ComEd or the Trust.
Such documents should only be
delivered to the Exchange Agent.
Questions regarding how to tender and
requests for information should be
directed to the Exchange Agent. See
"The Exchange Offer--Exchange Agent."
Withdrawal Rights Tenders of Old Capital Securities may
be withdrawn at any time on or prior
to the Expiration Date by delivering
a written notice of such withdrawal
to the Exchange Agent in conformity
with certain procedures set forth
below under "The Exchange
Offer--Withdrawal Rights."
Resales of New Based on certain interpretations by
Capital Securities the staff of the Division of
Corporation Finance of the
Commission, and subject to the
conditions described below, the
Company and the Trust believe that a
holder of Old Capital Securities
(other than a holder who is (a) a
broker-dealer who purchased the Old
Capital Securities directly from the
Trust to resell pursuant to Rule 144A
or any other available exemption
under the Securities Act, (b) a
person participating in the
distribution of the Old Capital
Securities or (c) a person who is an
"affiliate" of the Company or the
Trust) who exchanges Old Capital
Securities in the Exchange Offer for
New Capital Securities and then
resells such New Capital Securities
will be viewed by the staff no
differently than a non-affiliated
purchaser of registered securities
who purchases such securities in a
registered primary offering of
securities and, after completion of
such registered offering, may resell
the New Capital Securities without
further compliance with the
registration and prospectus delivery
requirements of the Securities Act,
provided that such New Capital
Securities are acquired in the
ordinary course of such holder's
business and that such holder is not
participating, and has no arrangement
or understanding with any person to
participate, in a distribution
(within the meaning of the Securities
Act) of such New Capital Securities.
Any holder of Old Capital Securities
who uses the Exchange Offer to
participate in a distribution of the
New Capital Securities to be acquired
in the Exchange Offer, any
broker-dealer who receives New
Capital Securities in exchange for
Old Capital Securities that were
purchased directly from the Trust to
resell pursuant to Rule 144A or any
other available exemption under the
Securities Act, any person
participating in the distribution of
the Old Capital Securities who
receives New Capital Securities in
the Exchange Offer and any
"affiliate" of the Company or the
Trust who receives New Capital
Securities in the Exchange Offer (a)
will not be able to rely on the
interpretations of the staff of the
Division of Corporation Finance set
forth in the above-described
interpretive letters and (b) must
comply with the registration and
prospectus delivery requirements of
the Securities Act in connection with
any sale or other transfer of such
New Capital Securities, unless such
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<PAGE>
sale is made pursuant to an exemption
from such requirements. Any such sale
or other transfer must be made by
delivery of a prospectus containing
the selling securityholder
information required by the rules of
the Commission under the Securities
Act. See "The Exchange Offer--Resales
of New Capital Securities."
Each holder (including any broker-
dealer) of Old Capital Securities who
wishes to exchange Old Capital
Securities for New Capital Securities
in the Exchange Offer will be
required to represent that (i) it is
not an "affiliate" of the Company or
the Trust, (ii) any New Capital
Securities to be received by it are
being acquired in the ordinary course
of its business, (iii) it has no
arrangement or understanding with any
person to participate in a
distribution (within the meaning of
the Securities Act) of such New
Capital Securities, and (iv) such
holder is not engaged in, and does
not intend to engage in, a
distribution (within the meaning of
the Securities Act) of such New
Capital Securities. The Letter of
Transmittal contains the foregoing
representations.
A broker-dealer who holds Old Capital
Securities for its own account as a
result of market-making activities or
other trading activities and who
receives New Capital Securities in
exchange for such Old Capital
Securities pursuant to the Exchange
Offer will be required to deliver a
prospectus meeting the requirements
of the Securities Act in connection
with any resale of such New Capital
Securities. Based upon the position
taken by the staff of the Division of
Corporation Finance of the Commission
in the interpretive letters referred
to above, the Company and the Trust
believe that a broker-dealer may
participate in the Exchange Offer
with respect to Old Capital
Securities acquired for its own
account as a result of market-making
activities or other trading
activities (a "Participating Broker-
Dealer"), provided that in connection
with any resales of New Capital
Securities received in exchange for
such Old Capital Securities, such
broker-dealer delivers a prospectus
meeting the requirements of the
Securities Act, which may be the
prospectus prepared for an exchange
offer so long as it contains a
description of the plan of
distribution with respect to the
resale of such New Capital
Securities. Accordingly, the Company
and the Trust will require each
broker-dealer who tenders, pursuant
to the Exchange Offer, Old Capital
Securities that were acquired for its
own account as the result of market-
making activities or other trading
activities to acknowledge that it
will deliver a prospectus meeting the
requirements of the Securities Act in
connection with any resale of New
Capital Securities received in
exchange for such Old Capital
Securities pursuant to the Exchange
Offer. The Letter of Transmittal
contains the foregoing acknowledgment
but states that by such
acknowledgment a broker-dealer will
not be deemed to admit that it is an
"underwriter" within the meaning of
the Securities Act. A Participating
Broker-Dealer may fulfill its
prospectus
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<PAGE>
delivery requirement in connection with
resales of New Capital Securities
received in exchange for Old Capital
Securities that were acquired by such
Participating Broker-Dealer for its own
account as a result of market-making
activities or other trading activities
with this Prospectus, as it may be
amended or supplemented from time to
time, during the 90-day period referred
to below. Subject to certain provisions
set forth in the Registration Rights
Agreement and to the limitations
described under "The Exchange Offer--
Resale of New Capital Securities,"
ComEd and the Trust have agreed that
this Prospectus, as it may be amended
or supplemented from time to time, may
be used by a Participating Broker-
Dealer in connection with resales of
such New Capital Securities for a
period ending 90 days after the
Expiration Date or, if earlier, when
all such New Capital Securities have
been disposed of by such Participating
Broker-Dealer. See "The Exchange
Offer--Resales of New Capital
Securities."
In that regard, each Participating
Broker-Dealer who surrenders Old
Capital Securities pursuant to the
Exchange Offer will be deemed to have
agreed, by execution of the Letter of
Transmittal or delivery of an Agent's
Message (as defined under "The Exchange
Offer--Acceptance for Exchange and
Issuance of New Capital Securities") in
lieu thereof, that, upon receipt of
notice from ComEd or the Trust of the
occurrence of any event or the
discovery of any fact which makes any
statement contained or incorporated by
reference in this Prospectus untrue in
any material respect or which causes
this Prospectus to omit to state a
material fact necessary in order to
make the statements contained or
incorporated by reference herein, in
light of the circumstances under which
they were made, not misleading or of
the occurrence of certain other events
specified in the Registration Rights
Agreement, such Participating Broker-
Dealer will suspend the sale of New
Capital Securities (or the New
Guarantee or the New Subordinated
Debentures, as applicable) pursuant to
this Prospectus until ComEd or the
Trust has amended or supplemented this
Prospectus to correct such misstatement
or omission and has furnished copies of
the amended or supplemented Prospectus
to such Participating Broker-Dealer or
ComEd or the Trust has given notice
that the sale of the New Capital
Securities (or the New Guarantee or the
New Subordinated Debentures, as
applicable) may be resumed, as the case
may be. See "The Exchange Offer--
Resales of New Capital Securities."
Exchange Agent The Exchange Agent is Wilmington Trust
Company. The addresses and telephone
and facsimile numbers of the Exchange
Agent are set forth in "The Exchange
Offer--Exchange Agent" and in the
Letter of Transmittal.
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<PAGE>
Use of Proceeds Neither ComEd nor the Trust will
receive any cash or other proceeds
from the issuance of the New Capital
Securities offered hereby. See "Use
of Proceeds From the Sale of the Old
Capital Securities."
Certain Federal Income Holders of Old Capital Securities
Tax Consequences; should review the information set
ERISA Considerations forth under "Certain Federal Income
Tax Consequences" and "ERISA
Considerations" prior to tendering
Old Capital Securities in the
Exchange Offer.
The Capital Securities
Securities Offered Up to $150,000,000 aggregate
Liquidation Amount of the Trust's
8.50% Capital Securities which have
been registered under the Securities
Act (Liquidation Amount $1,000 per
Capital Security). The New Capital
Securities will be issued and the Old
Capital Securities were issued under
the Trust Agreement. The New Capital
Securities and any Old Capital
Securities that remain outstanding
after consummation of the Exchange
Offer will constitute a single series
of Capital Securities under the Trust
Agreement and, accordingly, will vote
together as a single class for
purposes of determining whether
holders of the requisite percentage
in outstanding Liquidation Amount
thereof have taken certain actions or
exercised certain rights under the
Trust Agreement. See "Description of
Securities--Description of Capital
Securities--General." The forms and
terms of the New Securities are
identical in all material respects to
the respective forms and terms of the
Old Securities, except that the New
Securities have been registered under
the Securities Act and therefore are
not subject to certain restrictions
on transfer applicable to the Old
Securities. Accordingly, as the
context may require, unless expressly
stated otherwise, (i) "Capital
Securities" means the Old Capital
Securities and, in the event the
Exchange Offer is consummated, the
New Capital Securities, (ii)
"Subordinated Debentures" means the
Old Subordinated Debentures and, in
the event the Exchange Offer is
consummated, the New Subordinated
Debentures, (iii) "Guarantee" means
the Old Guarantee and, in the event
the Exchange Offer is consummated,
the New Guarantee and (iv)
"Securities" means the Old Securities
and, in the event the Exchange Offer
is consummated, the New Capital
Securities. See "The Exchange
Offer--Purpose and Effect of the
Exchange Offer," "Description of
Securities" and "Description of Old
Securities."
Distribution Dates January 15 and July 15 of each year,
commencing July 15, 1997.
Extension Periods Distributions on Capital Securities
will be deferred for the duration of
any Extension Period elected by ComEd
with respect to the payment of
interest on the Subordinated
Debentures. No Extension Period will
exceed 10 consecutive semi-annual
periods or extend
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<PAGE>
beyond the Stated Maturity Date. See
"Description of Securities--
Description of Subordinated
Debentures--Option to Extend Interest
Payment Date" and "Certain Federal
Income Tax Consequences--Interest
Income and Original Issue Discount."
Ranking The Capital Securities rank pari
passu, and payments thereon will be
made pro rata, with the Common
Securities except as described under
"Description of Securities--
Description of Capital Securities--
Subordination of Common Securities."
The Subordinated Debentures rank pari
passu with all other subordinated
indebtedness ("Other Indebtedness")
which has been or will be issued and
sold to other trusts which have been
or will be established by ComEd, in
each case similar to the Trust
("Other Trusts"), including the
$206.2 million principal amount of
the Company's 8.48% Subordinated
Deferrable Interest Notes due
September 30, 2035 (the "8.48%
Debentures") issued to ComEd
Financing I in connection with the
sale of the 8.48% Trust Originated
Preferred Securities issued by ComEd
Financing I (the "8.48% Preferred
Securities"), and are unsecured and
subordinate and junior in right of
payment to all Senior Indebtedness to
the extent and in the manner set
forth in the Indenture. See
"Description of Securities--
Description of Subordinated
Debentures." The Guarantee ranks pari
passu with all other guarantees
issued by the Company with respect to
capital or preferred securities
issued by Other Trusts ("Other
Guarantees") including the Company's
guarantee of the 8.48% Preferred
Securities, and constitutes an
unsecured obligation of the Company
and ranks subordinate and junior in
right of payment to all Senior
Indebtedness to the extent and in the
manner set forth in the Guarantee
Agreement. See "Description of
Securities--Description of
Guarantee."
Redemption The Trust Securities are subject to
mandatory redemption in a Like
Amount, (i) in whole but not in part,
on the Stated Maturity Date upon
repayment of the Subordinated
Debentures, (ii) in whole but not in
part, at any time prior to January
15, 2007, contemporaneously with the
optional prepayment of the
Subordinated Debentures by the
Company upon the occurrence and
continuation of a Tax Event and (iii)
in whole or in part, on or after
January 15, 2007 contemporaneously
with the optional prepayment by the
Company of the Subordinated
Debentures, in each case at the
applicable Redemption Price. See
"Description of Securities--
Description of Capital Securities--
Redemption."
Rating The Capital Securities have been
rated BBB- by Standard & Poor's
Ratings Services ("S&P") and baa3
by Moody's Investors Services, Inc.
("Moody's").
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<PAGE>
Absence of Market for The New Capital Securities will be a
the Capital Securities new issue of securities for which
there currently is no market.
Although the Initial Purchasers have
advised ComEd and the Trust that
they currently intend to make a
market in the New Capital
Securities, the Initial Purchasers
are not obligated to do so, and any
market-making activity with respect
to the New Capital Securities may be
interrupted or discontinued at any
time without notice. Accordingly, no
assurance can be given that an
active public or other market will
develop for the New Capital
Securities or as to the liquidity of
or the trading market for the New
Capital Securities. ComEd and the
Trust will not apply for listing of
the New Capital Securities on any
securities exchange or for quotation
through the National Association of
Securities Dealers Automated
Quotation System.
For additional information regarding the New Securities, see "Description
of Securities" and "Certain Federal Income Tax Consequences" below.
Risk Factors
Holders tendering Old Capital Securities in the Exchange Offer should
carefully consider the matters set forth under "Risk Factors" beginning on
page 17.
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<PAGE>
RISK FACTORS
Holders tendering Old Capital Securities in the Exchange Offer should
carefully review the information contained elsewhere in this Prospectus and
should particularly consider the matters set forth below. The forms and
terms of the New Securities are identical in all material respects to the
respective forms and terms of the Old Securities, except that the New
Securities have been registered under the Securities Act and therefore will
not be subject to certain restrictions on transfer applicable to the Old
Securities. Accordingly, as the context may require, unless expressly
stated otherwise, (i) "Capital Securities" means the Old Capital Securities
and, in the event the Exchange Offer is consummated, the New Capital
Securities, (ii) "Subordinated Debentures" means the Old Subordinated
Debentures and, in the event the Exchange Offer is consummated, the New
Subordinated Debentures, (iii) "Guarantee" means the Old Guarantee and, in
the event the Exchange Offer is consummated, the New Guarantee and (iv)
"Securities" means the Old Securities and, in the event the Exchange Offer
is consummated, the New Securities.
Ranking of Guarantee and the Subordinated Debentures
The Company's obligations under the Guarantee are subordinate and
junior in right of payment to all liabilities of the Company other than the
Company's guarantee of the 8.48% Preferred Securities and pari passu with
the most senior preferred stock now or hereafter issued by the Company and
with any guarantee now or hereafter entered into by the Company in respect
of any preferred stock of any affiliate of the Company. The obligations of
the Company under the Subordinated Debentures are subordinate and junior in
right of payment to all present and future Senior Indebtedness of the
Company. No payment of principal of (including redemption payments, if
any), premium, if any, or interest on, the Subordinated Debentures may be
made if (i) any Senior Indebtedness of the Company is not paid when due and
any applicable grace period with respect to such default has ended with
such default not being cured or waived or ceasing to exist, or (ii) the
maturity of any Senior Indebtedness has been accelerated because of a
default. At March 31, 1997 Senior Indebtedness of the Company aggregated
approximately $7,072 million. There are no terms in the Capital
Securities, the Subordinated Debentures or the Guarantee that limit the
Company's ability to incur additional indebtedness, including indebtedness
that ranks senior to the Subordinated Debentures or the Guarantee. See
"Description of Securities--Description of Guarantee" and "Description of
Securities--Description of Subordinated Debentures--Subordination."
Rights Under the Guarantee
The Guarantee guarantees to the holders of the Capital Securities the
payment of (i) any accrued and unpaid Distributions which are required to
be paid on the Capital Securities, to the extent the Trust shall have funds
on hand legally available therefor, (ii) the Redemption Price, including
all accrued and unpaid Distributions to the date of the redemption, to the
extent the Trust shall have funds on hand legally available therefor, with
respect to any Capital Securities called for redemption by the Trust and
(iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Trust (other than in connection with the distribution of
Subordinated Debentures to the holders of Capital Securities) the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Capital Securities to the date of payment therefor and
(b) the amount of assets of the Trust remaining available for distribution
to holders of Securities in liquidation of the Trust. The holders of a
majority in liquidation amount of the Capital Securities have the right to
direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee or to direct the exercise of any
trust or power conferred upon the Guarantee Trustee under the Guarantee.
Any holder of Capital Securities may institute a legal proceeding directly
against the Company to enforce the Guarantee Trustee's rights under the
Guarantee, without first instituting a legal proceeding against the Trust,
the Guarantee Trustee or any other person or entity. If the Company were
to default in its
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<PAGE>
obligation to pay amounts payable on the Subordinated Debentures, the Trust
would lack available funds for the payment of Distributions or amounts
payable on redemption of the Capital Securities or otherwise, and in such
event holders of the Capital Securities would not be able to rely upon the
Guarantee for payment of such amounts. Instead, in the event a Debenture
Event of Default shall have occurred and be continuing and such event is
attributable to the failure of the Company to pay principal of or premium,
if any, or interest on the Subordinated Debentures on the payment date on
which such payment is due and payable, then a holder of Capital Securities
may institute a legal proceeding directly against the Company for
enforcement of payment to such holder of the principal of or premium, if
any, or interest on such Subordinated Debentures having a principal amount
equal to the Liquidation Amount of the Capital Securities of such holder (a
"Direct Action"). Notwithstanding any payments made to a holder of Capital
Securities by the Company in connection with a Direct Action, the Company
shall remain obligated to pay the principal of and premium, if any, and
interest on the Subordinated Debentures, and the Company shall be
subrogated to the rights of the holder of such Capital Securities with
respect to payments on the Capital Securities to the extent of any payments
made by the Company to such holder in any Direct Action. Except as
described herein, holders of Capital Securities will not be able to
exercise directly any other remedy available to the holders of the
Subordinated Debentures or to assert directly any other rights in respect
of the Subordinated Debentures. See "Description of Securities--
Description of Guarantee--Status of the Guarantee" and "Description of
Securities--Description of Subordinated Debentures--Subordination." The
Trust Agreement provides that each holder of Capital Securities by
acceptance thereof agrees to the provisions of the Guarantee and the
Indenture.
Option to Extend Interest Payment Period
The Company has the right under the Indenture to defer payments of
interest on the Subordinated Debentures by extending the interest payment
period at any time, and from time to time, on the Subordinated Debentures.
As a consequence of such an extension, semi-annual distributions on the
Capital Securities would be deferred (but despite such deferral would
continue to accrue with interest thereon compounded semi-annually) by the
Trust during any such extended interest payment period. Such right to
extend the interest payment period for the Subordinated Debentures is
limited to a period not exceeding ten consecutive semi-annual periods for
any such extension. In the event that the Company exercises this right to
defer payments of interest, then (i) the Company shall not declare or pay
any dividend on, make any distributions with respect to, or redeem,
purchase or make a liquidation payment with respect to, any of its capital
stock and (ii) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees) issued by the Company which rank pari
passu with or junior to the Subordinated Debentures, including the 8.48%
Debentures and the guarantee of the 8.48% Preferred Securities. Prior to
the termination of any such Extension Period, the Company may further defer
payments of interest by further extending the interest payment period,
provided that such Extension Period, together with all such previous and
further extensions thereof, may not exceed 10 consecutive semi-annual
periods or extend beyond the Stated Maturity Date of the Subordinated
Debentures. Upon the termination of any Extension Period and the payment
of all amounts then due, the Company may select a new Extension Period, as
if no Extension Period had previously been declared, subject to the above
requirements. See "Description of Securities--Description of Capital
Securities--Distributions" and "--Voting Rights; Amendment of the Trust
Agreement" and "Description of Securities--Description of Subordinated
Debentures--Option to Extend Interest Payment Date."
In September 1995, ComEd Financing I issued 8,000,000 8.48% Preferred
Securities to the public. The proceeds of such issuance, together with the
proceeds of the issuance of common securities to the Company, were used by
ComEd Financing I to purchase the 8.48% Debentures from the Company. The
Subordinated Debentures are pari passu in right of payment with the 8.48%
Debentures. As a result, in the event the Company exercises its right to
defer interest on the Subordinated Debentures, the Company will be
-18-
<PAGE>
prohibited from making payments on the 8.48% Debentures or on its guarantee
of the 8.48% Preferred Securities, and in the event the Company exercises
its right to defer interest on the 8.48% Debentures, it will be prohibited
from making payments on the Subordinated Debentures and the Guarantee.
Should the Company exercise its rights to defer payments of interest
by extending the interest payment period, each holder of Capital Securities
will be required to accrue income (as original issue discount) for United
States federal income tax purposes in respect of the deferred interest
allocable to its Capital Securities. As a result, holders of Capital
Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash and will not receive cash from
the Trust related to such income if such holder disposes of its Capital
Securities prior to the record date for the date on which distributions of
such amounts are made. The Company has no current intention of exercising
its right to defer payments of interest by extending the interest payment
period on the Subordinated Debentures. However, should the Company
determine to exercise such right in the future, the market price of the
Capital Securities is likely to be affected. A holder that disposes of its
Capital Securities during an Extension Period, therefore, might not receive
the same return on its investment as a holder that continues to hold its
Capital Securities. In addition, as a result of the existence of the
Company's right to defer interest payments, the market price of the Capital
Securities (which represent an undivided beneficial interest in the
Subordinated Debentures) may be more volatile than other securities that do
not contain such rights. See "Certain Federal Income Tax Consequences--
Interest Income and Original Issue Discount."
Tax Event Redemption; Possible Tax Law Changes Affecting the Capital
Securities
Upon the occurrence and continuation of a Tax Event (as defined under
"Description of Securities--Description of Subordinated Debentures--Tax
Event Prepayment"), the Company will have the right to prepay the
Subordinated Debentures in whole (but not in part) at the Tax Event
Prepayment Price prior to January 15, 2007 and within 90 days following the
occurrence of such Tax Event and therefore cause a mandatory redemption of
the Capital Securities at the Tax Event Redemption Price. See "Description
of Securities--Description of Capital Securities--Redemption."
On February 6, 1997, President Clinton's budget proposal for fiscal
year 1998 was released. Included in the budget proposal is a provision
which, if enacted, would generally treat instruments such as the
Subordinated Debentures as equity for United States federal income tax
purposes if the instruments (i) have a maximum term of more than 15 years
and (ii) are not shown as indebtedness on the separate balance sheet of the
issuer. The provision is proposed to be effective generally for
instruments issued on or after the date of first committee action by
Congress. As of the date hereof, no such action has been taken. If the
provision applied to the Subordinated Debentures, among other things, the
Company would be unable to deduct interest on the Subordinated Debentures
for United States federal income tax purposes. A similar provision was
included in President Clinton's budget proposal for fiscal year 1997, but
the 104th Congress adjourned without taking action on such provision.
There can be no assurance that the current budget provision or future
legislative proposals will not affect the ability of the Company to deduct
interest on the Subordinated Debentures. Such a change could give rise to
a Tax Event, which may permit the Company to redeem the Capital Securities
at the Tax Event Redemption Price by electing to prepay the Subordinated
Debentures at the Tax Event Prepayment Price. See "Description of
Securities--Description of Capital Securities--Redemption" and "Description
of Securities--Description of Subordinated Debentures--Tax Event
Prepayment." See also "Certain Federal Income Tax Consequences--Possible
Tax Law Changes."
-19-
<PAGE>
Sufficiency of Payments
As long as payments of interest and other payments are made when due
on the Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Capital Securities, primarily
because (i) the aggregate principal amount of the Subordinated Debentures
will be equal to the sum of the Liquidation Amount or Redemption Price, as
applicable, of the Capital Securities and Common Securities; (ii) the
interest rate and interest and other payment dates on the Subordinated
Debentures will match the Distribution rate and Distribution and other
payment dates for the Trust Securities; (iii) under the Trust Agreement,
the Company shall pay for all and any costs, expenses and liabilities of
the Trust except the Trust's obligations to holders of Trust Securities
under such Trust Securities; and (iv) the Trust Agreement further provides
that the Trust will not engage in any activity that is not consistent with
the limited purposes thereof. If and to the extent that the Company does
not make payments on the Subordinated Debentures or as required by the
Trust Agreement, the Trust will not pay Distributions or other amounts due
on the Capital Securities. The Guarantee does not cover payment of
Distributions when the Trust does not have sufficient funds to pay such
Distributions.
Possible Adverse Effect on Market Prices
There can be no assurance as to the market prices for the Capital
Securities or the Subordinated Debentures that may be distributed in
exchange for Capital Securities if a dissolution or liquidation of the
Trust were to occur. Accordingly, the Capital Securities or the
Subordinated Debentures may trade at a discount to the price that the
investor paid to purchase the Capital Securities offered hereby. Because
holders of Capital Securities may receive Subordinated Debentures upon the
dissolution or liquidation of the Trust, prospective purchasers of Capital
Securities are also making an investment decision with regard to the
Subordinated Debentures and should carefully review all the information
regarding the Subordinated Debentures and the Company contained herein.
See "Description of Securities--Description of Capital Securities--
Liquidation of the Trust and Distribution of Subordinated Debentures" and
"Description of Securities--Description of Subordinated Debentures."
Limited Voting Rights
Holders of Capital Securities will have limited voting rights and will
not be entitled to vote to appoint, remove or replace, or to increase or
decrease the number of, ComEd Trustees, which voting rights are vested
exclusively in the Company as the holder of the Common Securities. See
"Description of Securities--Description of Capital Securities--Voting
Rights; Amendment of the Trust Agreement."
Absence of Public Market
The Old Capital Securities were issued to, and ComEd believes are
currently owned by, a relatively small number of beneficial owners. The
Old Capital Securities have not been registered under the Securities Act
and will continue to be subject to restrictions on transferability to the
extent that they are not exchanged for New Capital Securities. Although
the New Capital Securities will generally be permitted to be resold or
otherwise transferred by the holders (who are not affiliates of ComEd or
the Trust) without compliance with the registration requirements under the
Securities Act, they will constitute a new issue of securities with no
established trading market. ComEd and the Trust have been advised by the
Initial Purchasers that the Initial Purchasers currently intend to make a
market in the New Capital Securities. However, the Initial Purchasers are
not obligated to do so and any market-making activity with respect to the
New Capital Securities may be interrupted or discontinued at any time
without notice. In addition, such market-making activity will be subject
-20-
<PAGE>
to the limits imposed by the Securities Act and the Exchange Act and may be
limited during the Exchange Offer. Accordingly, no assurance can be given
that an active public or other market will develop for the New Capital
Securities or the Old Capital Securities or as to the liquidity of or the
trading market for the New Capital Securities or the Old Capital
Securities. If an active public market does not develop, the market price
and liquidity of the New Capital Securities may be adversely affected.
If a public trading market develops for the New Capital Securities,
future trading prices of such securities will depend on many factors,
including, among other things, prevailing interest rates, results of
operations and the market for similar securities. Depending on prevailing
interest rates, the market for similar securities and other factors,
including the financial condition of ComEd, the New Capital Securities may
trade at a discount.
Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of
the Securities Act) of ComEd or the Trust may publicly offer for sale or
resell the New Capital Securities only in compliance with the provisions of
Rule 144 under the Securities Act.
Each broker-dealer that receives New Capital Securities for its own
account in exchange for Old Capital Securities, where such Old Capital
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of such New Capital
Securities. See "Plan of Distribution."
Consequences of a Failure to Exchange Old Capital Securities
The Old Capital Securities have not been registered under the
Securities Act or any state securities laws and therefore may not be
offered, sold or otherwise transferred except in compliance with the
registration requirements of the Securities Act and any other applicable
securities laws, or pursuant to an exemption therefrom or in a transaction
not subject thereto, and in each case in compliance with certain other
conditions and restrictions. Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will continue to bear
a legend reflecting such restrictions on transfer. In addition, upon
consummation of the Exchange Offer, holders of Old Capital Securities which
remain outstanding will not be entitled to any rights to have such Old
Capital Securities registered under the Securities Act or to any similar
rights under the Registration Rights Agreement (subject to certain limited
exceptions). ComEd and the Trust do not intend to register under the
Securities Act any Old Capital Securities which remain outstanding after
consummation of the Exchange Offer (subject to such limited exceptions, if
applicable).
To the extent that Old Capital Securities are tendered and accepted in
the Exchange Offer, a holder's ability to sell untendered Old Capital
Securities could be adversely affected. In addition, although the Old
Capital Securities have been designated for trading in the Private
Offerings, Resale and Trading through Automatic Linkages ("PORTAL") market,
to the extent that Old Capital Securities are tendered and accepted in
connection with the Exchange Offer, any trading market for Old Capital
Securities which remain outstanding after the Exchange Offer could be
adversely affected.
The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will constitute a
single series of Capital Securities under the Trust Agreement and,
accordingly, will vote together as a single class for purposes of
determining whether holders of the requisite percentage in outstanding
Liquidation Amount thereof have taken certain actions or exercised certain
rights under the Trust Agreement.
-21-
<PAGE>
Exchange Offer Procedures
Subject to the conditions set forth under "The Exchange Offer--
Conditions to the Exchange Offer," delivery of New Capital Securities in
exchange for Old Capital Securities tendered and accepted for exchange
pursuant to the Exchange Offer will be made only after timely receipt by
the Exchange Agent of (i) certificates for Old Capital Securities or a
book-entry confirmation of a book-entry transfer of Old Capital Securities
into the Exchange Agent's account at DTC, including an Agent's Message (as
defined under "The Exchange Offer--Acceptance for Exchange and Issuance of
New Capital Securities") if the tendering holder does not deliver a Letter
of Transmittal, (ii) a completed and signed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or, in the case
of a book-entry transfer, an Agent's Message in lieu of the Letter of
Transmittal, and (iii) any other documents required by the Letter of
Transmittal. Therefore, holders of Old Capital Securities desiring to
tender such Old Capital Securities in exchange for New Capital Securities
should allow sufficient time to ensure timely delivery. The Trust is under
no duty to give notification of defects or irregularities with respect to
the tenders of Old Capital Securities for exchange.
USE OF PROCEEDS FROM THE SALE OF THE OLD CAPITAL SECURITIES
Neither ComEd nor the Trust will receive any cash or other proceeds
from the issuance of the New Capital Securities offered hereby. In
consideration for issuing the New Capital Securities in exchange for Old
Capital Securities as described in this Prospectus, the Trust will receive
Old Capital Securities in like Liquidation Amount. The Old Capital
Securities surrendered in exchange for the New Capital Securities will be
retired and cancelled.
The proceeds to the Trust from the offering of the Old Capital
Securities was approximately $150,000,000. All of the proceeds from the
sale of Old Capital Securities were invested by the Trust in Old
Subordinated Debentures. The proceeds were used by ComEd to discharge or
refund by redemption outstanding long-term debt. For information
concerning the Company's outstanding long-term debt, see Statements of
Consolidated Capitalization and Note 9 of Notes to Financial Statements in
the March 31, 1997 Form 10-Q Report. ComEd paid or reimbursed the Trust
for the expenses associated with the offering of the Old Capital Securities
and the compensation to the Initial Purchasers.
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<PAGE>
SUMMARY INFORMATION
The following summary information is qualified in its entirety by the
information and financial statements appearing in the documents incorporated in
this Prospectus by reference.
Commonwealth Edison Company
<TABLE>
<CAPTION>
<S> <C>
Estimated Population of Service Area.............................................................. 8,000,000
Customers (as of March 31, 1997).................................................................. 3,421,000
Sales (thousands of kilowatthours-12 months ended March 31, 1997)................................. 92,850,000
Net Electric Generating Capability, net of summer limitations (kilowatts)......................... 21,954,000
Fuel Sources of Kilowatthour Generation (12 months ended March 31, 1997):
Nuclear............................................................................................... 64%
Coal.................................................................................................. 33
Oil................................................................................................... 1
Natural gas........................................................................................... 2
---
100%
===
</TABLE>
Financial Information
<TABLE>
<CAPTION>
Twelve Months
Year Ended December 31 Ended
1992 1993 1994 1995 1996 March 31, 1997
---------- ---------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Electric Operating Revenues
(thousands of dollars) $6,026,321 $5,260,440 $6,277,521 $6,909,786 $6,934,547 $7,000,143
Net Income (thousands of
dollars) $ 513,981 $ 112,440 $ 423,946 $ 717,154 $ 743,368 $ 714,152
Net Income on Common Stock
(thousands of dollars) $ 443,442 $ 46,388 $ 359,019 $ 647,193 $ 678,944 $ 650,715
Earnings per Common Share $ 2.08 $ 0.22 $ 1.68 $ 3.02 $ 3.17 $ 3.04
Ratios of Earnings to-
Fixed Charges 2.06 1.19 1.99 2.79 2.90 2.84
Fixed Charges and Preferred
and Preference Stock
Dividend Requirements 1.78 1.03 1.73 2.39 2.48 2.43
- -------------------------
</TABLE>
See Notes (A) through (G) on pages 24 through 26.
-23-
<PAGE>
Notes to Financial Information:
(A) As a result of an April 1992 Illinois Supreme Court decision and a
Circuit Court of Cook County, Illinois decision, ComEd recorded in
1992 additional provisions for refunds and related interest related to
a prior disallowance of Byron Unit 1 costs which reduced net income by
approximately $50 million or $0.24 per common share.
(B) In January 1993, ComEd adopted an accounting standard which requires
an asset and liability approach for financial accounting and reporting
for income taxes as opposed to the deferred method that ComEd had
previously used. ComEd adopted the standard as a cumulative effect of
a change in an accounting principle, which increased net income and
net income on common stock for the year ended December 31, 1993 by
$9.7 million or $0.05 per common share.
In November 1993, two settlements (the "Settlements") related to various
proceedings and matters concerning ComEd's rates (the "Rate Matters
Settlement") and its fuel adjustment clause (the "Fuel Matters Settlement")
became final. The recording of the effects of the Settlements in October
1993 reduced 1993 net income by approximately $354 million or $1.66 per
common share, in addition to the approximately $160 million or $0.75 per
common share effect of the deferred recognition of revenues and after the
partially offsetting effect of recording approximately $269 million or
$1.26 per common share in deferred carrying charges, net of income taxes,
authorized in the Illinois Commerce Commission ("ICC") rate order issued in
January 1993. Refunds related to the Rate Matters Settlement, and reduced
fuel adjustment clause collections related to the Fuel Matters Settlement,
have been completed.
(C) The Illinois Public Utilities Act requires the ICC to hold annual
public hearings to determine whether each utility's fuel adjustment
clause reflects actual costs of fuel and power prudently purchased and
to reconcile amounts collected with actual costs. Through its fuel
adjustment clause, ComEd recovers from its customers the cost of the
fuel used to generate electricity and of purchased power as compared
to fuel costs included in base rates.
Final ICC orders have been issued in fuel reconciliation proceedings
for years prior to 1994 and for the year 1995. In 1996, an intervenor
filed testimony in the fuel reconciliation proceeding for 1994 seeking
a refund of approximately $90 million relating to nuclear station
performance. Under the Fuel Matters Settlement, parties to that
settlement agreed not to challenge the prudence of ComEd's western
coal costs for the period from 1989 through 1992. ComEd's western
coal contracts and its rail contracts for delivery of the western coal
provide for the purchase of certain coal at prices substantially above
currently prevailing market prices and ComEd has significant purchase
commitments under its contracts. For additional information relating
to ComEd's commitments for the purchase of coal, see "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," subcaption "Liquidity and Capital Resources," and Note 1
of Notes to Financial Statements under "Deferred Unrecovered Energy Costs"
in the March 31, 1997 Form 10-Q Report.
-24-
<PAGE>
(D) In 1994, ComEd recorded a reduction in the carrying value of its
investments in uranium related properties after completing a review of
various alternatives and reassessing the long-term recoverability of
those investments. The effects of the reduction reduced 1994 net
income by $34 million or $0.16 per common share.
Operation and maintenance expenses in 1994 reflect $34 million of
pension expense related to the 1994 early retirement program. The
effect of this increase to pension expense reduced 1994 net income by
$20 million or $0.09 per common share.
(E) In January 1995, the ICC issued its rate order (the "Rate Order") in the
proceedings relating to ComEd's February 1994 rate increase request. The
rates provided in the Rate Order became effective on January 14, 1995;
however, they are being collected subject to refund as a result of
subsequent judicial action. The Rate Order was appealed by intervenors and
ComEd to the Illinois Appellate Court, which issued a decision on May 30,
1997 affirming the Rate Order in all respects with the exception of two
issues which it remanded to the ICC for the purpose of providing further
analysis. Those issues relate to: (i) the manner in which certain costs are
recovered and which customers should pay these costs, and (ii) the proper
rate of return on equity for ComEd. ComEd believes that the ICC can satisfy
the Appellate Court's remand directions on the basis of the existing record
from the ICC proceedings which led to the Rate Order. The Appellate Court's
decision does not have any immediate effect on ComEd's rates or require
any refunds. In connection with the initiation of the appeal, ComEd
committed to make refunds "in the event that a final, non-appealable order
is entered reversing the ICC's Rate Order." As of March 31, 1997, electric
operating revenues of approximately $754 million (excluding revenue taxes)
were subject to refund. As noted, the Appellate Court's decision did not
reverse the Rate Order. Therefore, no refunds are required by the Appellate
Court's decision. It is expected that the Appellate Court's decision will
be appealed by the intervenors to the Illinois Supreme Court. For
additional information regarding the decision and the rate of return issue,
see the May 30, 1997 Form 8-K Report.
See Note 2 of Notes to Financial Statements in the March 31, 1997 Form 10-Q
Report for information regarding certain customer initiatives, including a
five-year cap on base electric rates, that ComEd announced in December 1995
and expects to have fully implemented in 1997. Also see Note 1 of Notes
to Financial Statements under "Depreciation and Decommissioning" in the
March 31, 1997 Form 10-Q Report for information concerning additional
depreciation charges related to ComEd's steam generators at Byron Unit 1
and Braidwood Unit 1 and ComEd's ongoing evaluation of the impact of the
expected early retirement of Zion.
As discussed under "Changes in the Electric Utility Industry" in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the March 31, 1997 Form 10-Q Report, various legislative
proposals have been pending in the Illinois legislature for the purpose of,
among other things, introducing price-based competition into the supply of
electric energy in Illinois under a less regulated structure. That process
will continue into the Fall of 1997. On May 30, 1997, the Illinois House of
Representatives approved, on a vote of 85 to 12, a bill that would have
provided for a 10% residential rate reduction commencing in 1998, customer
access to other electric suppliers in a phased-process over several years,
the recovery by utilities of a portion of their invested costs that might
not otherwise be recoverable in charges in a less regulated market, and a
leveling of certain regulatory and tax provisions as applied to various
electric service providers. The Illinois Senate, however, deferred final
consideration of the bill until the Fall veto session scheduled for October
1997. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations," subcaption "Changes in the Electric Utility
Industry" in the March 31, 1997 Form 10-Q Report for additional information
regarding deregulation, competition and their possible effects on the
recovery of investment costs and proposed legislation in Illinois.
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations," subcaption "Regulation--Nuclear Matters" in
the March 31, 1997 Form 10-Q Report for additional information
regarding ComEd's nuclear operations.
-25-
<PAGE>
(F) ComEd recorded an extraordinary loss of $33 million in the fourth
quarter of 1995 related to the early redemption of $645 million of
long-term debt, which loss reduced net income by $20 million (after
reflecting income tax effects of $13 million) or $0.09 per common
share.
Operation and maintenance expenses include $97 million, $12 million
and $18 million for the twelve months ended December 31, 1995,
December 31, 1996 and March 31, 1997, respectively, related to a
voluntary separation offer for union employees who accepted and left
ComEd's employ combined with separation plans offered to selected
groups of non-union employees. These employee separation plans
reduced net income by $59 million or $0.27 per common share, $7
million or $0.03 per common share and $11 million or $0.05 per common
share for the twelve months ended December 31, 1995, December 31, 1996
and March 31, 1997, respectively.
The effects of an income tax refund related to prior years increased
net income by $26 million or $0.12 per common share for the twelve
months ended December 31, 1996 and March 31, 1997.
The effects of a reduction in real estate taxes (approximately half of
which was related to the year 1995) increased net income by $28
million or $0.13 per common share and $30 million or $0.14 per common
share for the twelve months ended December 31, 1996 and March 31,
1997, respectively.
ComEd recorded additional depreciation charges on its nuclear
generating units of $30 million and $45 million for the twelve months
ended December 31, 1996 and March 31, 1997, respectively.
(G) For purposes of computing the ratios of earnings to fixed charges and
the ratios of earnings to fixed charges and preferred and preference
stock dividend requirements: (i) earnings consist of net income before
deducting net provisions for income taxes (including deferred taxes
and current income taxes applicable to nonoperating activities),
investment tax credits deferred and fixed charges; (ii) fixed charges
consist of interest on debt, amortization of debt discount, premium
and expense, preferred securities dividend requirements of subsidiary
trusts and the estimated interest component of nuclear fuel and other
lease payments and rentals; and (iii) preferred and preference stock
dividend requirements represent an amount equal to income, before
income taxes, which would be required to meet the dividends on
preferred and preference stocks.
-26-
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization
including short-term borrowings and current maturities of the Company at
March 31, 1997. The table should be read in conjunction with the Company's
consolidated financial statements and notes thereto included in the
documents incorporated by reference herein. See "Available Information."
<TABLE>
<CAPTION>
March 31, 1997
--------------
(in millions)
<S> <C>
Short-term borrowings............................... $ 130
Long-term borrowings including current maturities... 6,292
Company-obligated mandatorily redeemable
preferred securities of ComEd Financing I (1)..... 200
Company-obligated mandatorily redeemable
capital securities of ComEd Financing II (2)...... 150
Preferred and preference stocks without mandatory
redemption requirements........................... 507
Preference stock subject to mandatory redemption
requirements including current maturities......... 249
Common stock equity................................. 6,069
-------
Total capitalization including
short-term borrowings and current maturities...... $13,597
=======
</TABLE>
- ---------------------
(1) The sole asset of ComEd Financing I is $206.2 million principal amount
of the Company's 8.48% Subordinated Deferrable Interest Notes due
September 30, 2035.
(2) As described in this Prospectus, the sole asset of the Trust will be
$154.6 million principal amount of the Company's 8.50% Subordinated
Deferrable Interest Debentures due January 15, 2027.
The financial statements of the Trust will be consolidated with the
Company's financial statements, with the Capital Securities shown on the
Company's consolidated financial statements, along with the 8.48% Preferred
Securities issued by ComEd Financing I, as Company-obligated mandatorily
redeemable preferred securities of subsidiary trusts.
-27-
<PAGE>
ACCOUNTING TREATMENT FOR THE TRUST
For financial reporting purposes, the Trust is treated as a subsidiary of
ComEd and, accordingly, the accounts of the Trust are included in the
consolidated financial statements of ComEd. The Capital Securities will be
presented, along with the 8.48% Preferred Securities issued by ComEd Financing
I, as "Company-Obligated Mandatorily Redeemable Preferred Securities of
Subsidiary Trusts" in the consolidated financial statements of ComEd and
appropriate disclosures about the Capital Securities, the Guarantee and the
Subordinated Debentures will be included in the notes to the consolidated
financial statements. For financial reporting purposes, ComEd will record
Distributions payable on the Capital Securities as a charge in the consolidated
statement of income.
COMED FINANCING II
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the Trust Agreement executed by ComEd, as Sponsor, Wilmington Trust
Company, as Property Trustee and as Delaware Trustee, and the Administrative
Trustees named therein, and (ii) the filing of a certificate of trust with the
Delaware Secretary of State on November 20, 1996. The Trust exists for the
exclusive purposes of (i) issuing and selling the Trust Securities, (ii) using
the proceeds from the sale of Trust Securities to acquire the Subordinated
Debentures and (iii) engaging in only those other activities necessary,
advisable or incidental thereto. Accordingly, the Subordinated Debentures will
be the sole assets of the Trust, and payments under the Subordinated Debentures
will be the sole revenues of the Trust. All of the Common Securities are owned
by ComEd. The Common Securities rank pari passu, and payments will be made
thereon pro rata, with the Capital Securities, except that upon the occurrence
and continuance of an event of default under the Trust Agreement, the rights of
ComEd as holder of the Common Securities to payments in respect of Distributions
and payments upon liquidation, redemption or otherwise will be subordinated to
the rights of the holders of the Capital Securities. See "Description of
Securities--Description of Capital Securities--Subordination of Common
Securities." ComEd owns Common Securities in a Liquidation Amount equal to 3% of
the total capital of the Trust. The Trust has a term expiring on December 31,
2030, but may terminate earlier as provided in the Trust Agreement. The Trust's
business and affairs are conducted by its trustees, each appointed by ComEd as
holder of the Common Securities. The trustees for the Trust are Wilmington Trust
Company, as the Property Trustee (the "Property Trustee") and as the Delaware
Trustee (the "Delaware Trustee"), and two individual trustees (the
"Administrative Trustees") who are employees or officers of or affiliated with
ComEd (collectively, the "ComEd Trustees"). Wilmington Trust Company, as
Property Trustee, acts as sole indenture trustee under the Trust Agreement.
Wilmington Trust Company also acts as indenture trustee under the Guarantee and
is the indenture trustee under the Indenture. See "Description of Securities--
Description of Guarantee" and "Description of Securities--Description of
Subordinated Debentures." The holder of the Common Securities of the Trust or,
if an Event of Default under the Trust Agreement has occurred and is continuing,
the holders of a majority in Liquidation Amount of the Capital Securities, is
entitled to appoint, remove or replace the Property Trustee and/or the Delaware
Trustee. In no event do the holders of the Capital Securities have the right to
vote to appoint, remove or replace the Administrative Trustees; such voting
rights will be vested exclusively in the holder of the Common Securities. The
duties and obligations of each ComEd Trustee are governed by the Trust
Agreement. ComEd will pay all fees, expenses, debts and obligations (other than
the Trust Securities) related to the Trust and the offering of the Capital
Securities and will pay, directly or indirectly, all ongoing costs, expenses and
liabilities of the Trust. The principal executive office of the Trust is 37th
Floor, 10 South Dearborn Street, Chicago, IL 60690-0767 (telephone number
312/394-4321).
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THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
In connection with the sale of the Old Capital Securities, ComEd
and the Trust entered into the Registration Rights Agreement with the
Initial Purchasers, pursuant to which ComEd and the Trust agreed to file
and to use their reasonable best efforts to cause to become effective with
the Commission a registration statement with respect to the exchange of the
Old Capital Securities for capital securities with terms identical in all
material respects to the terms of the Old Capital Securities. A copy of
the Registration Rights Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual
obligations of ComEd and the Trust under the Registration Rights Agreement.
The forms and terms of the New Capital Securities are identical in all
material respect to the forms and terms of the Old Capital Securities,
except that the New Capital Securities have been registered under the
Securities Act and therefore will not be subject to certain restrictions on
transfer applicable to the Old Capital Securities. See "Risk Factors--
Consequences of a Failure to Exchange Old Capital Securities" and
"Description of Old Securities."
The Exchange Offer is not being made to, nor will the Trust or
ComEd accept tenders for exchange from, holders of Old Capital Securities
in any jurisdiction in which the Exchange Offer or the acceptance thereof
would not be in compliance with the securities or blue sky laws of such
jurisdiction.
Unless the context requires otherwise, the term "holder" with
respect to the Exchange Offer means any person in whose name the Old
Capital Securities are registered on the books of ComEd or any other person
who has obtained a properly completed bond power from the registered
holder, or any person who beneficially owns Old Capital Securities which
are held of record by DTC who desires to deliver such Old Capital
Securities by book-entry transfer into the Exchange Agent's account at DTC,
or any person who beneficially owns Old Capital Securities which are held
of record by a nominee other than DTC (or its nominee).
Pursuant to the Exchange Offer, ComEd will exchange as soon as
practicable after the date hereof, the Old Guarantee for the New Guarantee
and all of the Old Subordinated Debentures, of which $154,640,000 aggregate
principal amount is outstanding, for a like aggregate principal amount of
the New Subordinated Debentures. The New Guarantee and New Subordinated
Debentures have been registered under the Securities Act.
Terms of the Exchange
The Trust hereby offers, upon the terms and subject to the
conditions set forth in this Prospectus and in the accompanying Letter of
Transmittal, to exchange up to $150,000,000 aggregate Liquidation Amount of
New Capital Securities for a like aggregate Liquidation Amount of Old
Capital Securities properly tendered on or prior to the Expiration Date and
not properly withdrawn in accordance with the procedures described below.
The Trust will issue, promptly after the Expiration Date, an aggregate
Liquidation Amount of up to $150,000,000 of New Capital Securities in
exchange for a like aggregate Liquidation Amount of outstanding Old Capital
Securities tendered and accepted in connection with the Exchange Offer.
Holders may tender their Old Capital Securities for exchange in whole or in
part having a Liquidation Amount of $1,000 (1 Old Capital Security) or any
integral multiple in excess thereof, provided that if any Old Capital
Securities are tendered for exchange in part, the untendered aggregate
Liquidation Amount thereof must be $100,000 (100 Old Capital Securities) or
any integral multiple of $1,000 (1 Old Capital Security) in excess thereof.
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The Exchange Offer is not conditioned upon any minimum
Liquidation Amount of Old Capital Securities being tendered. As of the
date of this Prospectus, $150,000,000 aggregate Liquidation Amount of Old
Capital Securities is outstanding.
Holders of Old Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Old Capital
Securities which are not tendered for or are tendered but not accepted in
connection with the Exchange Offer will remain outstanding and remain
entitled to the benefits of the Trust Agreement, but will not be entitled
to any further registration rights under the Registration Rights Agreement,
except under limited circumstances. See "Risk Factors--Consequences of a
Failure to Exchange Old Capital Securities" and "Description of Old
Securities."
If any tendered Old Capital Securities are not accepted for
exchange because of an invalid tender, the occurrence of certain other
events set forth herein or otherwise, certificates for any such unaccepted
Old Capital Securities will be returned, without expense, to the tendering
holder thereof promptly after the Expiration Date. Holders who tender Old
Capital Securities in connection with the Exchange Offer will not be
required to pay brokerage commissions or fees or transfer taxes with
respect to the exchange of Old Capital Securities in connection with the
Exchange Offer, except under those circumstances described in the Letter of
Transmittal. ComEd will pay all charges and expenses, other than certain
applicable taxes described below, in connection with the Exchange Offer.
See "--Fees and Expenses."
NEITHER THE BOARD OF DIRECTORS OF COMED NOR THE COMED TRUSTEES MAKES
ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO WHETHER TO TENDER
OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD CAPITAL SECURITIES
PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE
ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL SECURITIES MUST MAKE THEIR OWN
DECISION WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER AND, IF SO, THE
AGGREGATE LIQUIDATION AMOUNT OF OLD CAPITAL SECURITIES TO TENDER AFTER READING
THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR
ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION AND REQUIREMENTS.
Expiration Date; Extensions; Amendments
The term "Expiration Date" means 5:00 p.m., New York City time,
on ______________, 1997 unless the Exchange Offer is extended by ComEd and
the Trust (in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended).
ComEd and the Trust expressly reserve the right, subject to
applicable law, at any time and from time to time, (i) to delay the
acceptance of the Old Capital Securities for exchange, (ii) to terminate
the Exchange Offer (whether or not any Old Capital Securities have been
accepted for exchange) if ComEd or the Trust determines, in its reasonable
discretion, that any of the conditions referred to under "--Conditions to
the Exchange Offer" have occurred or exist or have not been satisfied,
(iii) to extend the Expiration Date and retain all Old Capital Securities
tendered pursuant to the Exchange Offer, subject, however, to the right of
holders of Old Capital Securities to withdraw their tendered Old Capital
Securities as described under "--Withdrawal Rights," and (iv) to waive any
condition or otherwise amend the terms of the Exchange Offer in any
respect. If the Exchange Offer is amended in a manner determined by ComEd
and the Trust to constitute a material change, or if ComEd and the Trust
waive a material condition of the Exchange Offer, ComEd and the Trust will
promptly disclose such amendment by means of a prospectus supplement that
will be distributed to the registered holders of the Old Capital
Securities, and ComEd and the Trust will extend the Exchange Offer to the
extent required by Rule 14e-1 under the Exchange Act. If ComEd or the
Trust becomes
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aware of any material information with respect to the plan of distribution
not previously disclosed in the Prospectus or any material change to such
information in this Prospectus, ComEd and the Trust will promptly file a
post-effective amendment to the Registration Statement. In such event,
ComEd and the Trust will extend the Exchange Offer to the extent required
by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment
will be followed promptly by oral or written notice thereof to the Exchange
Agent and by making a public announcement thereof, and such announcement in
the case of an extension will be made no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled
Expiration Date. Without limiting the manner in which ComEd and the Trust
may choose to make any public announcement and subject to applicable law,
ComEd and the Trust shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a
release to an appropriate news agency.
Acceptance for Exchange and Issuance of New Capital Securities
Upon the terms and subject to the conditions of the Exchange
Offer, the Trust will exchange New Capital Securities for Old Capital
Securities validly tendered and not withdrawn (pursuant to the withdrawal
rights described under "--Withdrawal Rights") promptly after the Expiration
Date.
Subject to the conditions set forth under "--Conditions to the
Exchange Offer," delivery of New Capital Securities in exchange for Old Capital
Securities tendered and accepted for exchange pursuant to the Exchange Offer
will be made only after timely receipt by the Exchange Agent of (i) certificates
for Old Capital Securities or a book-entry confirmation of a book-entry transfer
of Old Capital Securities into the Exchange Agent's account at DTC, including an
Agent's Message if the tendering holder does not deliver a Letter of
Transmittal, (ii) a completed and signed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or, in the case of a book-
entry transfer, an Agent's Message in lieu of the Letter of Transmittal, and
(iii) any other documents required by the Letter of Transmittal. Accordingly,
the delivery of New Capital Securities might not be made to all tendering
holders at the same time, and will depend upon when Old Capital Securities,
book-entry confirmations with respect to Old Capital Securities and other
required documents are received by the Exchange Agent.
The term "book-entry confirmation" means a timely confirmation of
a book-entry transfer of Old Capital Securities into the Exchange Agent's
account at DTC. See "--Procedures for Tendering Old Capital Securities--
Book-Entry Transfer." The term "Agent's Message" means a message,
transmitted by DTC to and received by the Exchange Agent and forming a part
of a book-entry confirmation, which states that DTC has received an express
acknowledgment from the tendering participant, which acknowledgment states
that such participant has received and agrees to be bound by the Letter of
Transmittal and that the Trust and ComEd may enforce such Letter of
Transmittal against such participant.
Subject to the terms and conditions of the Exchange Offer, ComEd
and the Trust will be deemed to have accepted for exchange, and thereby
exchanged, Old Capital Securities validly tendered and not withdrawn as, if
and when the Trust gives oral or written notice to the Exchange Agent of
ComEd's and the Trust's acceptance of such Old Capital Securities for
exchange pursuant to the Exchange Offer. The Exchange Agent will act as
agent for ComEd and the Trust for the purpose of receiving tenders of Old
Capital Securities, Letters of Transmittal and related documents, and as
agent for tendering holders for the purpose of receiving Old Capital
Securities, Letters of Transmittal and related documents and transmitting
New Capital Securities which will not be held in global form by DTC or a
nominee of DTC to validly tendering holders. Such exchange will be made
promptly after the Expiration Date. If for any reason whatsoever,
acceptance for exchange or the exchange of any Old Capital Securities
tendered pursuant to the Exchange Offer is delayed (whether before or after
ComEd's and the Trust's acceptance for exchange of Old Capital Securities)
or
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ComEd and the Trust extend the Exchange Offer or are unable to accept for
exchange or exchange Old Capital Securities tendered pursuant to the
Exchange Offer, then, without prejudice to ComEd's and the Trust's rights
set forth herein, the Exchange Agent may, nevertheless, on behalf of ComEd
and the Trust and subject to Rule 14e-1(c) under the Exchange Act, retain
tendered Old Capital Securities and such Old Capital Securities may not be
withdrawn except to the extent tendering holders are entitled to withdrawal
rights as described under "--Withdrawal Rights."
Pursuant to an Agent's Message or a Letter of Transmittal, a
holder of Old Capital Securities will represent, warrant and agree in the
Letter of Transmittal that it has full power and authority to tender,
exchange, sell, assign and transfer Old Capital Securities, that the Trust
will acquire good, marketable and unencumbered title to the tendered Old
Capital Securities, free and clear of all liens, restrictions, charges and
encumbrances, and the Old Capital Securities tendered for exchange are not
subject to any adverse claims or proxies. The holder also will warrant and
agree that it will, upon request, execute and deliver any additional
documents deemed by the Trust or the Exchange Agent to be necessary or
desirable to complete the exchange, sale, assignment, and transfer of the
Old Capital Securities tendered pursuant to the Exchange Offer.
Procedures for Tendering Old Capital Securities
Valid Tender. Except as set forth below, in order for Old
Capital Securities to be validly tendered by book-entry transfer, an
Agent's Message or a completed and signed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, and in either
case any other documents required by the Letter of Transmittal, must be
delivered to the Exchange Agent by mail, facsimile, hand delivery or
overnight carrier at one of the Exchange Agent's addresses set forth under
"-Exchange Agent" on or prior to the Expiration Date and either (i) such
Old Capital Securities must be tendered pursuant to the procedures for
book-entry transfer set forth below or (ii) the guaranteed delivery
procedures set forth below must be complied with.
Except as set forth below, in order for Old Capital Securities to
be validly tendered by a means other than by book-entry transfer, a
completed and signed Letter of Transmittal (or facsimile thereof), with any
required signature guarantees, and any other documents required by the
Letter of Transmittal, must be delivered to the Exchange Agent by mail,
facsimile, hand delivery or overnight carrier at one of the Exchange
Agent's addresses set forth under "-Exchange Agent" on or prior to the
Expiration Date and either (i) such Old Capital Securities must be
delivered to the Exchange Agent on or prior to the Expiration Date or (ii)
the guaranteed delivery procedures set forth below must be complied with.
If less than all Old Capital Securities are tendered, a tendering
holder should fill in the amount of Old Capital Securities being tendered
in the appropriate box on the Letter of Transmittal. The entire amount of
Old Capital Securities delivered to the Exchange Agent will be deemed to
have been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS TO BE BY MAIL, THE USE OF REGISTERED MAIL, RETURN
RECEIPT REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer. The Exchange Agent and DTC have confirmed
that any Participant (as defined in "Description of Securities--Description
of Capital Securities--Form, Denomination, Book-Entry Procedures and
Transfer" and "--Depositary Procedures") in DTC's book-entry transfer
facility system may utilize DTC's
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ATOP procedures to tender Old Capital Securities. The Exchange Agent will
establish an account with respect to the Old Capital Securities at DTC for
purposes of the Exchange Offer within two business days after the date of
this Prospectus. Any Participant may make a book-entry delivery of the Old
Capital Securities by causing DTC to transfer such Old Capital Securities
into the Exchange Agent's account at DTC in accordance with DTC's ATOP
procedures for transfer. However, although delivery of Old Capital
Securities may be effected through book-entry transfer into the Exchange
Agent's account at DTC, an Agent's Message or a completed and signed Letter
of Transmittal (or facsimile thereof), with any required signature
guarantees and any other documents required by the Letter of Transmittal,
must in any case be delivered to and received by the Exchange Agent at one
of its addresses set forth under "--Exchange Agent" on or prior to the
Expiration Date, or the guaranteed delivery procedure set forth below must
be complied with. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Signature Guarantees. Certificates for Old Capital Securities
need not be endorsed and signature guarantees on a Letter of Transmittal
are unnecessary unless (a) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the
certificate or (b) such registered holder completes the box entitled
"Special Issuance Instructions" or "Special Delivery Instructions" in the
Letter of Transmittal. In the case of (a) or (b) above, such certificates
for Old Capital Securities must be duly endorsed or accompanied by a
properly executed bond power, with the endorsement or signature on the bond
power and on the Letter of Transmittal guaranteed by a firm or other entity
identified in Rule 17Ad-15 under the Exchange Act as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank;
(ii) a broker, dealer, municipal securities broker or dealer or government
securities broker or dealer; (iii) a credit union; (iv) a national
securities exchange, registered securities association or clearing agency;
or (v) a savings association that is a participant in a Securities Transfer
Association (an "Eligible Institution"), unless surrendered on behalf of
such Eligible Institution. See Instructions 4 and 7 to the Letter of
Transmittal.
Guaranteed Delivery. If a holder desires to tender Old Capital
Securities pursuant to the Exchange Offer and the certificates for such Old
Capital Securities are not immediately available or time will not permit
all required documents to reach the Exchange Agent on or before the
Expiration Date, or the procedures for book-entry transfer cannot be
completed on a timely basis, such Old Capital Securities may nevertheless
be tendered, provided that all of the following guaranteed delivery
procedures are complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a completed and signed Notice of Guaranteed Delivery,
substantially in the form accompanying the Letter of Transmittal, is
delivered to the Exchange Agent, as provided below, on or prior to
Expiration Date; and
(iii) the certificates (or a book-entry confirmation)
representing all tendered Old Capital Securities, in proper form for
transfer, together with a completed and signed Letter of Transmittal
(or facsimile thereof) or, in the case of a book-entry transfer, an
Agent's Message in lieu of the Letter of Transmittal), with any
required signature guarantees and any other documents required by the
Letter of Transmittal, are received by the Exchange Agent within five
New York Stock Exchange trading days after the date of execution of
such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or
transmitted by facsimile or mail to the Exchange Agent and must include a
guarantee by an Eligible Institution in the form set forth in such notice.
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ComEd's and the Trust's acceptance for exchange of Old Capital Securities
tendered pursuant to any of the procedures described above will constitute a
binding agreement between the tendering holder, ComEd and the Trust upon the
terms and subject to the conditions of the Exchange Offer.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Old Capital Securities will be determined by ComEd and the Trust,
in their sole discretion, whose determination shall be final and binding on all
parties. ComEd and the Trust reserve the absolute right, in their sole and
absolute discretion, to reject any and all tenders determined by them not to be
in proper form or the acceptance of which, or exchange for, may, in the view of
counsel to ComEd and the Trust, be unlawful. ComEd and the Trust also reserve
the right, in their reasonable discretion and subject to applicable law, to
waive any of the conditions of the Exchange Offer as set forth under "--
Conditions to the Exchange Offer" or any condition, defect or irregularity in
any tender of Old Capital Securities of any particular holder whether or not
similar conditions, defects or irregularities are waived in the case of other
holders.
ComEd's and the Trust's interpretation of the terms and conditions of the
Exchange Offer (including the Letter of Transmittal and the instructions
thereto) will be final and binding on all parties. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Neither ComEd, the Trust,
any affiliates or assigns of ComEd or the Trust, the Exchange Agent nor any
other person shall be under any duty to give any notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney,
or any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing and, unless waived by ComEd and the
Trust, proper evidence satisfactory to ComEd and the Trust, in their sole
discretion, of such person's authority to so act must be submitted.
A beneficial owner of Old Capital Securities that are held by or registered
in the name of a broker, dealer, commercial bank, trust company or other nominee
or custodian is urged to contact such entity promptly if such beneficial holder
wishes to participate in the Exchange Offer.
Resales of New Capital Securities
The Trust is making the Exchange Offer for the Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance of
the Commission as set forth in certain interpretive letters addressed to third
parties in other transactions. However, neither ComEd nor the Trust sought its
own interpretive letter and there can be no assurance that the staff of the
Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such interpretive
letters to third parties. Based on these interpretations by the staff of the
Division of Corporation Finance, and subject to the conditions described below,
the Company and the Trust believe that a holder of Old Capital Securities (other
than a holder who is (a) a broker-dealer who purchased the Old Capital
Securities directly from the Trust to resell pursuant to Rule 144A or any other
available exemption under the Securities Act, (b) a person participating in the
distribution of the Old Capital Securities or (c) a person who is an "affiliate"
of the Company or the Trust) who exchanges Old Capital Securities in the
Exchange Offer for New Capital Securities and then resells such New Capital
Securities will be viewed by the staff no differently than a non-affiliated
purchaser of registered securities who purchases such securities in a registered
primary offering of securities and, after completion of such registered
offering, may resell the New Capital Securities without further compliance with
the registration and prospectus delivery requirements of the Securities Act,
provided that such New Capital Securities are acquired in the ordinary course of
such holder's business and
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that such holder is not participating, and has no arrangement or understanding
with any person to participate, in a distribution (within the meaning of the
Securities Act) of such New Capital Securities. Any holder of Old Capital
Securities who uses the Exchange Offer to participate in a distribution of the
New Capital Securities to be acquired in the Exchange Offer, any broker-dealer
who receives New Capital Securities in exchange for Old Capital Securities that
were purchased directly from the Trust to resell pursuant to Rule 144A or any
other available exemption under the Securities Act, any person participating in
the distribution of the Old Capital Securities who receives New Capital
Securities in the Exchange Offer and any "affiliate" of the Company or the Trust
who receives New Capital Securities in the Exchange Offer (a) will not be able
to rely on the interpretations of the staff of the Division of Corporation
Finance set forth in the above-described interpretive letters and (b) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or other transfer of such New Capital
Securities, unless such sale is made pursuant to an exemption from such
requirements. Any such resale transaction must be made by delivery of a
prospectus containing the selling securityholder information required by the
rules of the Commission under the Securities Act.
Each holder (including any broker-dealer) of Old Capital Securities who
wishes to exchange Old Capital Securities for New Capital Securities in the
Exchange Offer will be required to represent that (i) it is not an "affiliate"
of ComEd or the Trust, (ii) any New Capital Securities to be received by it are
being acquired in the ordinary course of its business, (iii) it has no
arrangement or understanding with any person to participate in a distribution
(within the meaning of the Securities Act) of such New Capital Securities, and
(iv) such holder is not engaged in, and does not intend to engage in, a
distribution (within the meaning of the Securities Act) of such New Capital
Securities. The Letter of Transmittal contains the foregoing representations. In
addition, ComEd and the Trust may require a holder, as a condition to such
holder's eligibility to participate in the Exchange Offer, to furnish to ComEd
and the Trust (or an agent thereof) in writing information as to the number of
"beneficial owners" (within the meaning of Rule 13d-3 under the Exchange Act) on
behalf of whom such holder holds the Capital Securities to be exchanged in the
Exchange Offer.
A broker-dealer who holds Old Capital Securities for its own account as a
result of market-making activities or other trading activities and who receives
New Capital Securities in exchange for such Old Capital Securities pursuant to
the Exchange Offer may be deemed to be an "underwriter" within the meaning of
the Securities Act and will be required to deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Capital Securities. Based upon the position taken by the staff of the Division
of Corporation Finance of the Commission in the interpretive letters referred to
above, the Company and the Trust believe that a broker-dealer may participate in
the Exchange Offer with respect to Old Capital Securities acquired for its own
account as a result of market-making activities or other trading activities (a
"Participating Broker-Dealer"), provided that in connection with any resales of
New Capital Securities received in exchange for such Old Capital Securities,
such broker-dealer delivers a prospectus meeting the requirements of the
Securities Act, which may be the prospectus prepared for an exchange offer so
long as it contains a description of the plan of distribution with respect to
the resale of such New Capital Securities. Accordingly, the Company and the
Trust will require each broker-dealer who tenders, pursuant to the Exchange
Offer, Old Capital Securities that were acquired for its own account as the
result of market-making activities or other trading activities to acknowledge
that it will deliver a prospectus meeting the requirements of the Securities Act
in connection with any resale of New Capital Securities received in exchange for
such Old Capital Securities pursuant to the Exchange Offer. However, the Letter
of Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. Also based upon the position taken by the staff
of the Division of Corporation Finance of the Commission in the interpretive
letters referred to above, the Company and the Trust believe that a
Participating Broker-Dealer may fulfill its prospectus delivery requirement in
connection with resales of New Capital Securities received in exchange for Old
Capital Securities that were
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acquired by such Participating Broker-Dealer for its own account as a result of
market-making activities or other trading activities with this Prospectus, as it
may be amended or supplemented from time to time, during the 90-day period
referred to below. Subject to certain provisions set forth in the Registration
Rights Agreement and to the limitations described herein, ComEd and the Trust
have agreed that this Prospectus, as it may be amended or supplemented from time
to time, may be used by a Participating Broker-Dealer in connection with resales
of such New Capital Securities for a period ending 90 days after the Expiration
Date or, if earlier, when all such New Capital Securities have been disposed of
by such Participating Broker-Dealer. See "Plan of Distribution." However, a
Participating Broker-Dealer who intends to use this Prospectus in connection
with the resale of New Capital Securities received in exchange for Old Capital
Securities pursuant to the Exchange Offer must notify ComEd or the Trust, or
cause ComEd or the Trust to be notified, on or prior to the Expiration Date,
that it is a Participating Broker-Dealer. Such notice may be given in the space
provided for that purpose in the Letter of Transmittal or may be delivered to
the Exchange Agent at one of the addresses set forth herein under "--Exchange
Agent."
In that regard, each Participating Broker-Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal or delivery of any Agent's Message in
lieu thereof, that, upon receipt of notice from ComEd or the Trust of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in any material
respect or which causes this Prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by reference
herein, in light of the circumstances under which they were made, not misleading
or of the occurrence of certain other events specified in the Registration
Rights Agreement, such Participating Broker-Dealer will suspend the sale of New
Capital Securities (or the New Guarantee or the New Subordinated Debentures, as
applicable) pursuant to this Prospectus until ComEd or the Trust has amended or
supplemented this Prospectus to correct such misstatement or omission and has
furnished copies of the amended or supplemented Prospectus to such Participating
Broker-Dealer or ComEd or the Trust has given notice that the sale of the New
Capital Securities (or the New Guarantee or the New Subordinated Debentures, as
applicable) may be resumed, as the case may be.
Withdrawal Rights
As set forth below, tenders of Old Capital Securities may be withdrawn at
any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written or facsimile
transmission of such notice of withdrawal must be received by the Exchange Agent
at one of its addresses set forth under "--Exchange Agent" on or prior to the
Expiration Date. Any such notice of withdrawal must specify the name of the
person who tendered the Old Capital Securities to be withdrawn, the aggregate
Liquidation Amount of Old Capital Securities to be withdrawn, and (if
certificates for such Old Capital Securities have been tendered) the name of the
registered holder of the Old Capital Securities as set forth on the certificate
for the Old Capital Securities, if different from that of the person who
tendered such Old Capital Securities. If certificates for the Old Capital
Securities have been delivered or otherwise identified to the Exchange Agent,
then prior to the physical release of such certificates for the Old Capital
Securities, the tendering holder must submit the serial numbers shown on the
particular certificates for the Old Capital Securities to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Old Capital Securities tendered for the
account of an Eligible Institution. If Old Capital Securities have been tendered
pursuant to the procedures for book-entry transfer set forth in "--Procedures
for Tendering Old Capital Securities," the notice of withdrawal must specify the
name and number of the account at DTC to be credited with the withdrawn Old
Capital Securities. Withdrawals of tenders of Old Capital Securities may not be
rescinded. Old Capital Securities properly withdrawn will not be deemed validly
tendered for purposes of the
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Exchange Offer, but may be retendered at any subsequent time on or prior to the
Expiration Date by following any of the procedures described above under
"--Procedures for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by ComEd and the Trust,
in their sole discretion, whose determination shall be final and binding on all
parties. Neither ComEd, the Trust, any affiliates or assigns of ComEd or the
Trust, the Exchange Agent nor any other person shall be under any duty to give
any notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any Old Capital Securities
which have been tendered but which are withdrawn will be returned to the holder
thereof promptly after withdrawal.
Distributions on New Capital Securities
Each New Capital Security will accumulate Distributions from the most
recent Distribution Date on the Old Capital Securities surrendered in exchange
for such New Capital Securities or, if no Distributions have been paid or
provided for on such Old Capital Securities, from January 24, 1997. As a result,
holders of Old Capital Securities that are accepted for exchange will not
receive accumulated Distributions on such Old Capital Securities for any period
from and after the most recent Distribution Date on such Old Capital Securities
or, if no Distributions have been paid or provided for on such Old Capital
Securities, from and after January 24, 1997, and such holders will be deemed to
have waived the right to receive any Distributions on such Old Capital
Securities.
Conditions to the Exchange Offer
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, ComEd and the Trust will not be required to
accept for exchange, or to exchange, any New Capital Securities for any Old
Capital Securities, and, as described below, may terminate the Exchange Offer
(whether or not any Old Capital Securities have been accepted for exchange) or
may waive any conditions to or amend the Exchange Offer, if any of the following
conditions have occurred or exists or have not been satisfied:
(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the New Capital Securities issued
pursuant to the Exchange Offer in exchange for Old Capital Securities to be
offered for resale, resold and otherwise transferred by holders thereof
(other than broker-dealers and any such holder which is an "affiliate" of
ComEd or the Trust within the meaning of Rule 405 under the Securities Act)
without compliance with the registration and prospectus delivery provisions
of the Securities Act provided that such New Capital Securities are
acquired in the ordinary course of such holders' business and such holders
have no arrangement or understanding with any person to participate in the
distribution of such New Capital Securities;
(b) any action or proceeding shall have been instituted or threatened
in any court or by or before any governmental agency or body with respect
to the Exchange Offer which, in ComEd's and the Trust's judgment, would
reasonably be expected to impair the ability of ComEd or the Trust to
proceed with the Exchange Offer;
(c) any law, statute, rule or regulation shall have been adopted or
enacted which, in ComEd's and the Trust's judgment, would reasonably be
expected to impair the ability of ComEd or the Trust to proceed with the
Exchange Offer;
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(d) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by order of the
Commission or any other governmental authority which, in ComEd's and the
Trust's judgment, would reasonably be expected to impair the ability of
ComEd or the Trust to proceed with the Exchange Offer;
(e) a stop order shall have been issued by the Commission or any
state securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
ComEd or the Trust, threatened for that purpose, or any governmental
approval has not been obtained, which approval ComEd and the Trust shall,
in their reasonable discretion, deem necessary for the consummation of the
Exchange Offer as contemplated hereby; or
(f) any change, or any development involving a prospective change, in
the business or financial affairs of ComEd or any of its subsidiaries has
occurred which, in the reasonable judgment of ComEd and the Trust, might
materially impair the ability of ComEd or the Trust to proceed with the
Exchange Offer.
If ComEd and the Trust determine in their reasonable discretion that any of
the foregoing events or conditions has occurred or exists or has not been
satisfied, ComEd and the Trust may, subject to applicable law, terminate the
Exchange Offer (whether or not any Old Capital Securities have theretofore been
accepted for exchange) or may waive any such condition or otherwise amend the
terms of the Exchange Offer in any respect. If such waiver or amendment
constitutes a material change to the Exchange Offer, ComEd and the Trust will
promptly disclose such waiver by means of a prospectus supplement that will be
distributed to the registered holders of the Old Capital Securities, and ComEd
and the Trust will extend the Exchange Offer to the extent required by Rule 14e-
1 under the Exchange Act.
Exchange Agent
Wilmington Trust Company has been appointed as Exchange Agent for the
Exchange Offer. Delivery of a Letter of Transmittal and any other documents
required by the Letter of Transmittal, questions, requests for assistance, and
requests for additional copies of this Prospectus or of a Letter of Transmittal
should be directed to the Exchange Agent as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
By Registered or Certified Mail: By Facsimile: By Hand/Overnight Carrier:
Wilmington Trust Company Wilmington Trust Company Wilmington Trust Company
1100 North Market Street Attn: Corporate Trust 1100 North Market Street
Rodney Square North Administration Rodney Square North
Wilmington, Delaware 19890 (302) 651-8882 Wilmington, Delaware 19890
Attn: Corporate Trust Attn: Corporate Trust
Administration (For Eligible Institutions Only) Administration
Confirm by Telephone
(302) 651-1428
For Information Call:
(302) 651-1428
</TABLE>
Delivery to other than the above addresses or facsimile number will
not constitute a valid delivery.
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Fees and Expenses
ComEd has agreed to pay all expenses of the Trust, including expenses
related to the Exchange Offer. ComEd has agreed to pay the Exchange Agent
reasonable and customary fees for its services and will reimburse it for its
reasonable out-of-pocket expenses in connection therewith. ComEd will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to the beneficial owners of Old Capital Securities, and in
handling or tendering for their customers.
Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however, New
Capital Securities are to be delivered to, or are to be issued in the name of,
any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the exchange
of Old Capital Securities in connection with the Exchange Offer, then the amount
of any such transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted with the Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder.
Neither ComEd nor the Trust will make any payment to brokers, dealers or
others soliciting acceptances of the Exchange Offer.
DESCRIPTION OF SECURITIES
Description of Capital Securities
Pursuant to the terms of the Trust Agreement, the Trust has issued Old
Capital Securities and Common Securities and, in the event the Exchange Offer is
consummated, will issue New Capital Securities. New Capital Securities will
represent undivided beneficial interests in the assets of the Trust and the
holders thereof will be entitled to a preference in certain circumstances with
respect to Distributions and amounts payable on redemption of the Trust
Securities or liquidation of the Trust over the Common Securities. See
"--Subordination of Common Securities." The Trust Agreement has been qualified
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
The forms and terms of the New Capital Securities are identical in all material
respects to the forms and terms of the Old Capital Securities, except that the
New Capital Securities have been registered under the Securities Act and
therefore are not subject to certain restrictions on transfer applicable to the
Old Capital Securities. See"--Removal of Certain Restrictions on Transfer."
Accordingly, as the context may require, unless expressly stated otherwise,
"Capital Securities" means the Old Capital Securities and, in the event the
Exchange Offer is consummated, the New Capital Securities. The following is a
summary of all material provisions of the Capital Securities, the Common
Securities and the Trust Agreement; however, the summary does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the Trust Agreement, including the definitions therein of
certain terms.
General
The Capital Securities (including the Old Capital Securities and the New
Capital Securities) are limited to $150,000,000 aggregate Liquidation Amount at
any one time outstanding. The Capital Securities rank on a parity, and payments
are made thereon pro rata, with the Common Securities except as described under
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"--Subordination of Common Securities." The New Capital Securities and any Old
Capital Securities that remain outstanding after consummation of the Exchange
Offer will constitute a single series of Capital Securities under the Trust
Agreement and, accordingly, will vote together as a single class for purposes of
determining whether holders of the requisite percentage in outstanding
Liquidation Amount thereof have taken certain actions or exercised certain
rights under the Trust Agreement. Legal title to the Old Subordinated Debentures
is (and legal title to the New Subordinated Debentures will be) held by the
Property Trustee in trust for the benefit of the holders of Capital Securities
and Common Securities. The New Guarantee to be executed by ComEd for the benefit
of the holders of Capital Securities will be a guarantee on a subordinated basis
but will not guarantee payment of Distributions or amounts payable on redemption
of Capital Securities or on liquidation of the Trust when the Trust does not
have funds on hand available to make such payments. See "Description of
Guarantee."
Distributions
Distributions on the Capital Securities are cumulative, accumulate from
January 24, 1997 and are payable semi-annually in arrears on January 15 and July
15 of each year, commencing July 15, 1997, at the annual rate of 8.50% of the
Liquidation Amount to the holders of record of the Capital Securities on the
January 1 or July 1 immediately preceding such date. The amount of Distributions
payable for any period is computed on the basis of a 360-day year consisting of
twelve 30-day months and for any period less than a full calendar month on the
basis of the actual number of days elapsed in such month. In the event that any
date on which Distributions are payable on the Capital Securities is not a
Business Day (as defined below), payment of the Distributions payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect to any such delay), in each case with
the same force and effect as if made on such date (each date on which
Distributions are payable in accordance with the foregoing, a "Distribution
Date"). A "Business Day" shall mean any day other than a Saturday or a Sunday,
or a day on which banking institutions in Wilmington, Delaware or New York, New
York are authorized or required by law or executive order to remain closed.
So long as no Debenture Event of Default has occurred and is continuing,
the Company has the right under the Indenture to defer the payment of interest
on the Subordinated Debentures by extending the interest payment period at any
time and from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period, provided that no Extension Period
may extend beyond the Stated Maturity Date. Upon any such election, semi-annual
Distributions on the Capital Securities will be deferred by the Trust during any
such Extension Period. Distributions to which holders of the Capital Securities
are entitled during any such Extension Period will accumulate additional
Distributions thereon at the rate per annum of 8.50% thereof, compounded semi-
annually from the relevant Distribution Date. The term "Distributions," as used
herein, shall include any such additional Distributions.
Prior to the termination of any such Extension Period, the Company may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or to
extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due, and subject to the
foregoing limitations, the Company may elect to begin a new Extension Period.
The Company must give the Property Trustee, the Administrative Trustees and the
Debenture Trustee notice of its election of any such Extension Period at least
10 days prior to the earlier of (i) the date the Distributions on the Capital
Securities would have been payable except for the election to begin such
Extension Period or (ii) the date the Administrative Trustees are required to
give notice to any securities exchange or to holders of such Capital Securities
of the record date or the date such Distributions are payable but in any event
not less than 10 days prior to such record date. There is no limitation on the
number of times that the Company may elect to begin an Extension Period. See
"Description
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of Subordinated Debentures--Option to Extend Interest Payment Date" and "Certain
Federal Income Tax Consequences--Interest Income and Original Issue Discount."
During any such Extension Period, the Company may not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common, preference and preferred stock) or (ii) make any payment of
principal of or premium, if any, or interest on or repay, repurchase or redeem
any debt securities of the Company (including Other Indebtedness) that rank pari
passu with or junior in right of payment to the Subordinated Debentures,
including the 8.48% Debentures, or (iii) make any guarantee payments with
respect to the foregoing.
Although the Company may in the future exercise its option to defer
payments of interest on the Subordinated Debentures, the Company has no such
current intention.
The revenue of the Trust available for distribution to holders of the
Capital Securities will be limited to payments under the Subordinated Debentures
in which the Trust will invest the proceeds from the issuance and sale of the
Trust Securities. See "Description of Subordinated Debentures--General." If the
Company does not make interest payments on the Subordinated Debentures, the
Property Trustee will not have funds available to pay Distributions on the
Capital Securities. The payment of Distributions (if and to the extent the Trust
has funds on hand legally available for the payment of such Distributions) is
guaranteed by the Company on a limited basis as set forth herein under
"Description of Guarantee."
Redemption
Upon the repayment on the Stated Maturity Date or prepayment prior to the
Stated Maturity Date of the Subordinated Debentures, the proceeds from such
repayment or prepayment shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the Trust Securities, upon not less than 30
nor more than 60 days' notice of a date of redemption (the "Redemption Date"),
at the applicable Redemption Price, which shall be equal to (i) in the case of
the repayment of the Subordinated Debentures on the Stated Maturity Date, the
Maturity Redemption Price (equal to the principal of, and accrued interest on,
the Subordinated Debentures), (ii) in the case of the optional prepayment of the
Subordinated Debentures prior to January 15, 2007 upon the occurrence and
continuation of a Tax Event, the Tax Event Redemption Price (equal to the Tax
Event Prepayment Price in respect of the Subordinated Debentures) and (iii) in
the case of the optional prepayment of the Subordinated Debentures on or after
January 15, 2007, the Optional Redemption Price (equal to the Optional
Prepayment Price in respect of the Subordinated Debentures). See "Description of
Subordinated Debentures--Optional Prepayment" and "--Tax Event Prepayment."
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Subordinated Debentures to be paid in accordance with their terms and
(ii) with respect to a distribution of Subordinated Debentures upon the
liquidation of the Trust, Subordinated Debentures having a principal amount
equal to the Liquidation Amount of the Trust Securities of the holder to whom
such Subordinated Debentures are distributed.
Liquidation of the Trust and Distribution of Subordinated Debentures
The Company has the right at any time to terminate the Trust and cause the
Subordinated Debentures to be distributed to the holders of the Trust Securities
in liquidation of the Trust. Such right is subject to the Company having
received an opinion of counsel to the effect that holders of the Capital
Securities will not
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recognize any gain or loss for United States federal income tax purposes as a
result of the dissolution of the Trust and the distribution of the Subordinated
Debentures.
The Trust shall automatically terminate upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Company; (ii)
the distribution of a Like Amount of the Subordinated Debentures to the holders
of the Trust Securities, if the Company, as Sponsor, has given written direction
to the Property Trustee to terminate the Trust (which direction is optional and,
except as described above, wholly within the discretion of the Company, as
Sponsor); (iii) redemption of all of the Trust Securities as described under
"--Redemption"; (iv) expiration of the term of the Trust; and (v) the entry of
an order for the dissolution of the Trust by a court of competent jurisdiction.
If a termination occurs as described in clause (i), (ii), (iv), or (v)
above, the Trust shall be liquidated by the ComEd Trustees as expeditiously as
the ComEd Trustees determine to be possible by distributing, after satisfaction
of liabilities to creditors of the Trust as provided by applicable law, to the
holders of the Trust Securities a Like Amount of the Subordinated Debentures,
unless such distribution is determined by the Property Trustee not to be
practicable, in which event such holders will be entitled to receive out of the
assets of the Trust legally available for distribution to holders, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, an amount equal to the aggregate of the Liquidation Amount plus accumulated
and unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because the Trust has insufficient assets on hand legally available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Capital Securities and the Common Securities shall
be paid on a pro rata basis, except that if a Debenture Event of Default has
occurred and is continuing, the Capital Securities shall have a priority over
the Common Securities. See "--Subordination of Common Securities."
After the liquidation date is fixed for any distribution of Subordinated
Debentures to holders of the Trust Securities, (i) the Trust Securities will no
longer be deemed to be outstanding, (ii) each registered global certificate, if
any, representing Trust Securities and held by DTC or its nominee will receive a
registered global certificate or certificates representing the Subordinated
Debentures to be delivered upon such distribution and (iii) any certificates
representing Trust Securities not held by DTC or its nominee will be deemed to
represent Subordinated Debentures having a principal amount equal to the
Liquidation Amount of such Trust Securities, and bearing accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on such
Trust Securities until such certificates are presented to the Administrative
Trustees or their agent for cancellation, whereupon the Company will issue to
such holder, and the Debenture Trustee will authenticate, a certificate
representing such Subordinated Debentures.
There can be no assurance as to the market prices for the Capital
Securities or the Subordinated Debentures that may be distributed in exchange
for the Trust Securities if a dissolution and liquidation of the Trust were to
occur. Accordingly, the Capital Securities that an investor may purchase, or the
Subordinated Debentures that the investor may receive on dissolution and
liquidation of the Trust, may trade at a discount to the price that the investor
paid to purchase the Capital Securities offered hereby.
Redemption Procedures
If applicable, Trust Securities shall be redeemed at the applicable
Redemption Price with the proceeds from the contemporaneous repayment or
prepayment of the Subordinated Debentures. Any redemption of Trust Securities
shall be made and the applicable Redemption Price shall be payable on the
Redemption Date only to the extent that the Trust has funds legally available
for the payment of such applicable Redemption Price.
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If the Trust gives a notice of redemption in respect of the Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are legally available, with respect to the Capital Securities
held by DTC or its nominees, the Property Trustee will deposit irrevocably with
DTC funds sufficient to pay the applicable Redemption Price. See "--Form,
Denomination, Book-Entry Procedures and Transfer." With respect to the Capital
Securities held in certificated form, the Property Trustee, to the extent funds
are legally available, will pay the applicable Redemption Price to holders of
Capital Securities by check mailed to the address of the relevant holder. See
"--Payment and Paying Agency." Notwithstanding the foregoing, Distributions
payable on or prior to the Redemption Date shall be payable to the holders of
such Capital Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of the
holders of the Capital Securities will cease, except the right of the holders of
the Capital Securities to receive the applicable Redemption Price, but without
interest on such Redemption Price, and the Capital Securities will cease to be
outstanding. In the event that any Redemption Date of Capital Securities is not
a Business Day, then the applicable Redemption Price payable on such date will
be paid on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay). In the event that
payment of the Redemption Price in respect of any Capital Securities is
improperly withheld or refused and not paid either by the Trust or by the
Company pursuant to the Guarantee as described under "Description of Guarantee,"
Distributions on such Capital Securities will continue to accumulate at the then
applicable rate, from the Redemption Date originally established by the Trust to
the date such Redemption Price is actually paid, in which case the actual
payment date will be the Redemption Date for purposes of calculating the
Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), provided the acquirer is not the holder of Common
Securities or an obligor under the Indenture, the Company or its subsidiaries
may at any time and from time to time purchase outstanding Capital Securities by
tender, in the open market or by private agreement.
Notice of any redemption will be mailed at least 30 days but not more than
60 days prior to the Redemption Date to each holder of Trust Securities at its
registered address. Unless the Company defaults in payment of the applicable
Prepayment Price on, or in the repayment of, the Subordinated Debentures, on and
after the Redemption Date Distributions will cease to accrue on the Trust
Securities called for redemption.
Subordination of Common Securities
Payment of Distributions on, and the Redemption Price of, the Capital
Securities and Common Securities, as applicable, shall be made pro rata based on
the Liquidation Amount of the Capital Securities and Common Securities;
provided, however, that if on any Distribution Date or Redemption Date an Event
of Default under the Trust Agreement shall have occurred and be continuing, no
payment of any Distribution on, or applicable Redemption Price of, any of the
Common Securities, and no other payment on account of the redemption,
liquidation or other acquisition of the Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions on all of
the outstanding Capital Securities for all Distribution periods terminating on
or prior thereto, or in the case of payment of the applicable Redemption Price
the full amount of such Redemption Price, shall have been made or provided for,
and all funds available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions on, or Redemption Price of, the
Capital Securities then due and payable.
In the case of any Event of Default under the Trust Agreement, the Company
as holder of the Common Securities will be deemed to have waived any right to
act with respect to such Event of Default until
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the effect of such Event of Default shall have been cured, waived or otherwise
eliminated. Until any such Event of Default has been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
holders of the Capital Securities and not on behalf of the Company as holder of
the Common Securities, and only the holders of the Capital Securities will have
the right to direct the Property Trustee to act on their behalf.
Events of Default; Notice
The occurrence of a Debenture Event of Default (see "Description of
Subordinated Debentures--Debenture Events of Default") constitutes an "Event of
Default" under the Trust Agreement.
Within five Business Days after the occurrence of any Event of Default
under the Trust Agreement actually known to the Property Trustee, the Property
Trustee shall transmit notice of such Event of Default to the holders of the
Capital Securities, the Administrative Trustees and the Company, as Sponsor,
unless such Event of Default shall have been cured or waived. The Company, as
Sponsor, and the Administrative Trustees are required to file annually with the
Property Trustee a certificate as to whether or not they are in compliance with
all the conditions and covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities as described under
"--Liquidation of the Trust and Distribution of Subordinated Debentures" and
"--Subordination of Common Securities."
Removal of ComEd Trustees
Unless a Debenture Event of Default shall have occurred and be continuing,
any ComEd Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed during such time by the
holders of a majority in Liquidation Amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Company as the holder of the Common
Securities. No resignation or removal of the Property Trustee or the Delaware
Trustee and no appointment of a successor trustee thereto shall be effective
until the acceptance of appointment by the successor trustee in accordance with
the provisions of the Trust Agreement.
Merger or Consolidation of ComEd Trustees
Any corporation into which the Property Trustee, the Delaware Trustee or
any Administrative Trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Property Trustee or
the Delaware Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Property Trustee or the
Delaware Trustee, shall be the successor of such ComEd Trustee under the Trust
Agreement, provided such corporation shall be otherwise qualified and eligible.
Mergers, Consolidations, Amalgamations or Replacements of the Trust
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any Person, except as described
below. The Trust may, at the request of the Company, as Sponsor, with the
consent of the Administrative Trustees but without the consent of the holders of
the Capital Securities, the Property Trustee
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or the Delaware Trustee, merge with or into, consolidate, amalgamate, or be
replaced by or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to a trust organized as such under the
laws of any State; provided, that (i) such successor entity either (a) expressly
assumes all of the obligations of the Trust with respect to the Capital
Securities or (b) substitutes for the Capital Securities other securities having
substantially the same terms as the Capital Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the Capital
Securities rank in priority with respect to Distributions and payments upon
liquidation, redemption and otherwise, (ii) the Company expressly appoints a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee with respect to the Subordinated Debentures, (iii) the
Successor Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Capital Securities are then listed, if any, (iv) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not cause the Capital Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the Capital Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of such holders'
interest in the new entity), (vi) such successor entity has a purpose
substantially identical to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Company has received an opinion from independent counsel to the Trust
experienced in such matters to the effect that (a) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Capital
Securities (including any Successor Securities) in any material respect (other
than with respect to any dilution of such holders' interest in the new entity),
and (b) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Trust nor such successor entity will
be required to register as an investment company under the Investment Company
Act of 1940, as amended (the "Investment Company Act"), and (viii) the Company
or any permitted successor or assignee owns all of the common securities of such
successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
holders of 100% in Liquidation Amount of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity not
to be classified as a grantor trust for United States federal income tax
purposes.
Voting Rights; Amendment of the Trust Agreement
Except as provided below and under "--Mergers, Consolidations,
Amalgamations or Replacements of the Trust" and "Description of Guarantee--
Amendments and Assignment" and as otherwise required by law and the Trust
Agreement, the holders of the Capital Securities will have no voting rights.
The Trust Agreement may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities (i) to cure any ambiguity, correct or supplement
any provisions in the Trust Agreement that may be inconsistent with any other
provision, or to make any other provisions with respect to matters or questions
arising under the Trust Agreement which shall not be inconsistent with the other
provisions of the Trust Agreement, or (ii) to modify, eliminate or add to any
provisions of the Trust Agreement to such extent as shall be necessary to ensure
that the Trust will be classified for United States federal income tax purposes
as a grantor trust at all times that any Trust Securities are outstanding or to
ensure that the Trust will not be required to register as an "investment
company" under the Investment Company Act; provided, however, that such action
shall not adversely affect
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in any material respect the interests of the holders of the Trust Securities,
and any amendments of the Trust Agreement shall become effective when notice
thereof is given to the holders of the Trust Securities. The Trust Agreement may
be amended by the Administrative Trustees and the Company (i) with the consent
of holders representing a majority (based upon Liquidation Amount) of the
outstanding Trust Securities, and (ii) upon receipt by the Administrative
Trustees of an opinion of counsel to the effect that such amendment or the
exercise of any power granted to the Administrative Trustees in accordance with
such amendment will not affect the Trust's status as a grantor trust for United
States federal income tax purposes or the Trust's exemption from status as an
"investment company" under the Investment Company Act, provided that, without
the consent of each holder of Trust Securities, the Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the Trust Securities as of a specified date or (ii)
restrict the right of a holder of Trust Securities to institute suit for the
enforcement of any such payment on or after such date.
So long as any Subordinated Debentures are held by the Property Trustee,
the ComEd Trustees shall not (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee, or executing
any trust or power conferred on such Property Trustee with respect to the
Subordinated Debentures, (ii) waive certain past defaults under the Indenture,
(iii) exercise any right to rescind or annul a declaration of acceleration of
the maturity of the principal of the Subordinated Debentures or (iv) consent to
any amendment, modification or termination of the Indenture or the Subordinated
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the holders of a majority in Liquidation Amount
of all outstanding Capital Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Subordinated
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior approval of each holder of the Capital Securities. The
ComEd Trustees shall not revoke any action previously authorized or approved by
a vote of the holders of the Capital Securities except by subsequent vote of
such holders. The Property Trustee shall notify each holder of Capital
Securities of any notice of default with respect to the Subordinated Debentures.
In addition to obtaining the foregoing approvals of such holders of the Capital
Securities, prior to taking any of the foregoing actions, the ComEd Trustees
shall obtain an opinion of counsel experienced in such matters to the effect
that the Trust will not cease to be classified as a grantor trust for United
States federal income tax purposes on account of such action.
Any required approval of holders of Capital Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon which
action by written consent of such holders is to be taken, to be given to each
holder of record of Capital Securities in the manner set forth in the Trust
Agreement.
No vote or consent of the holders of Capital Securities will be required
for the Trust to redeem and cancel or distribute the Capital Securities in
accordance with the Trust Agreement.
Notwithstanding that holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Company, the ComEd Trustees or any affiliate of
the Company or any ComEd Trustees, shall, for purposes of such vote or consent,
be treated as if they were not outstanding.
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Form, Denomination, Book-Entry Procedures and Transfer
In the event that New Capital Securities are issued in certificated form,
such New Capital Securities will be in a Liquidation Amount of $1,000 (1 New
Capital Security) or any integral multiple in excess thereof and may be
transferred or exchanged in such amounts in the manner and at the offices
described below.
In the event that New Capital Securities are issued in registered, global
form (collectively, the "Global Capital Securities"), the Global Capital
Securities will be deposited upon issuance with the Property Trustee as
custodian for DTC, in New York, New York, and registered in the name of DTC or
its nominee, in each case for credit to an account of a direct or indirect
participant in DTC as described below.
Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the Global Capital
Securities may not be exchanged for New Capital Securities in certificated form
except in the limited circumstances described below. See "--Exchange of Book-
Entry New Capital Securities for Certificated New Capital Securities."
Depositary Procedures
DTC has advised the Trust and the Company that DTC is a limited-purpose
trust company created to hold securities for its participating organizations
(collectively, the "Participants") and to facilitate the clearance and
settlement of transactions in those securities between Participants through
electronic book-entry changes in accounts of its Participants. The Participants
include securities brokers and dealers (including the Initial Purchasers),
banks, trust companies, clearing companies and certain other organizations.
Access to DTC's system is also available to other entities such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (collectively,
the "Indirect Participants"). Persons who are not Participants may beneficially
own securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interest and transfer of ownership interest
of each actual purchaser of each security held by or on behalf of DTC are
recorded on the records of the Participants and Indirect Participants.
DTC has also advised the Trust and the Company that, pursuant to procedures
established by it, (i) upon deposit of the Global Capital Securities, DTC will
credit the accounts of Participants designated by the Initial Purchasers with
portions of the Liquidation Amount of the Global Capital Securities and (ii)
ownership of such interests in the Global Capital Securities will be shown on,
and the transfer of ownership thereof will be effected only through, records
maintained by DTC (with respect to the Participants) or by the Participants and
the Indirect Participants (with respect to other owners of beneficial interests
in the Global Capital Securities).
Investors in the Global Capital Securities may hold their interests
therein directly through DTC if they are Participants in such system, or
indirectly through organizations which are Participants in such system.
All interests in a Global Capital Security may be subject to the procedures
and requirements of DTC. The laws of some states require that certain
persons take physical delivery in certificated form of securities that they
own. Consequently, the ability to transfer beneficial interests in a
Global Capital Security to such persons will be limited to that extent.
Because DTC can act only on behalf of Participants, which in turn act on
behalf of Indirect Participants and certain banks, the ability of a person
having beneficial interests in a Global Capital Security to pledge such
interests to persons or entities that do not participate in the DTC system,
or otherwise
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take actions in respect of such interests, may be affected by the lack of a
physical certificate evidencing such interests.
Except as described below, owners of interests in the Global Capital
Securities will not have New Capital Securities registered in their name, will
not receive physical delivery of New Capital Securities in certificated form and
will not be considered the registered owners or holders thereof under the Trust
Agreement for any purpose.
Payments in respect of the Global Capital Security registered in the name
of DTC or its nominee will be payable by the Property Trustee to DTC in its
capacity as the registered holder under the Trust Agreement. Under the terms of
the Trust Agreement, the Property Trustee will treat the persons in whose names
the New Capital Securities, including the Global Capital Securities, are
registered as the owners thereof for the purpose of receiving such payments and
for any and all other purposes whatsoever. Consequently, neither the Property
Trustee nor any agent thereof has or will have any responsibility or liability
for (i) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
ownership interests in the Global Capital Securities, or for maintaining,
supervising or reviewing any of DTC's records or any Participant's or Indirect
Participant's records relating to the beneficial ownership interests in the
Global Capital Securities or (ii) any other matter relating to the actions and
practices of DTC or any of its Participants or Indirect Participants. DTC has
advised the Trust and the Company that its current practice, upon receipt of any
payment in respect of securities such as the New Capital Securities, is to
credit the accounts of the relevant Participants with the payment on the payment
date, in amounts proportionate to their respective holdings in Liquidation
Amount of beneficial interests in the relevant security as shown on the records
of DTC unless DTC has reason to believe it will not receive payment on such
payment date. Payments by the Participants and the Indirect Participants to the
beneficial owners of New Capital Securities will be governed by standing
instructions and customary practices and will be the responsibility of the
Participants or the Indirect Participants and will not be the responsibility of
DTC, the Property Trustee, the Trust or the Company. Neither the Trust or the
Company nor the Property Trustee will be liable for any delay by DTC or any of
its Participants in identifying the beneficial owners of the New Capital
Securities, and the Trust or the Company and the Property Trustee may
conclusively rely on and will be protected in relying on instructions from DTC
or its nominee for all purposes.
Secondary market trading activity in interests in the Global Capital
Securities will settle in immediately available funds, subject in all cases to
the rules and procedures of DTC and its participants. Transfers between
Participants in DTC will be effected in accordance with DTC's procedures, and
will be settled in same-day funds.
DTC has advised the Trust and the Company that it will take any action
permitted to be taken by a holder of New Capital Securities only at the
direction of one or more Participants to whose account with DTC interests in the
Global Capital Securities are credited and only in respect of such portion of
the Liquidation Amount of the New Capital Securities as to which such
Participant or Participants has or have given such direction. However, if there
is an Event of Default under the Trust Agreement, DTC reserves the right to
exchange the Global Capital Securities for legended New Capital Securities in
certificated form and to distribute such New Capital Securities to its
Participants.
The information in this section concerning DTC and its book-entry systems
has been obtained from sources that the Trust and the Company believe to be
reliable, but neither the Trust nor the Company takes responsibility for the
accuracy thereof.
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Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the Global Capital Securities among participants in DTC, DTC is
under no obligation to perform or to continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Trust or the
Company nor the Property Trustee will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations.
Exchange of Book-Entry New Capital Securities for Certificated New Capital
Securities
A Global Capital Security is exchangeable for New Capital Securities in
registered certificated form if (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as Depositary for the Global Capital Security
and the Trust thereupon fails to appoint a successor Depositary within 90 days
or (y) has ceased to be a clearing agency registered under the Exchange Act,
(ii) the Company in its sole discretion elects to cause the issuance of the New
Capital Securities in certificated form or (iii) there shall have occurred and
be continuing an Event of Default or any event which after notice or lapse of
time or both would be an Event of Default under the Trust Agreement. In
addition, beneficial interests in a Global Capital Security may be exchanged for
certificated New Capital Securities upon request but only upon at least 20 days
prior written notice given to the Property Trustee by or on behalf of DTC in
accordance with customary procedures. In all cases, certificated New Capital
Securities delivered in exchange for any Global Capital Security or beneficial
interests therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the Depositary (in accordance with
its customary procedures).
Payment and Paying Agency
Payments in respect of the New Capital Securities held in global form shall
be made to the Depositary, which shall credit the relevant accounts at the
Depositary on the applicable Distribution Dates or in respect of the New Capital
Securities that are not held by the Depositary, such payments shall be made by
check mailed to the address of the holder entitled thereto as such address shall
appear on the register. The paying agent (the "Paying Agent") shall initially be
the Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees and the Company. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee and the Company. In the event that the Property Trustee shall
no longer be the Paying Agent, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Company) to act as Paying Agent.
Removal of Certain Restrictions on Transfer
The Old Capital Securities may be transferred only in blocks having a
Liquidation Amount of not less than $100,000 (100 Old Capital Securities). New
Capital Securities acquired in accordance with the Exchange Offer will not
contain such a restriction on transfer.
The Old Capital Securities have not been registered under the Securities
Act or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements of
the Securities Act and any other applicable securities laws, or pursuant to an
exemption therefrom or in a transaction not subject thereto, and in each case in
compliance with certain other conditions and restrictions. Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on transfer. New
Capital Securities acquired in accordance with the Exchange Offer will not bear
a legend reflecting such restrictions on transfer.
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Rating
The Capital Securities have been rated BBB- by S&P and baa3 by
Moody's.
Registrar and Transfer Agent
The Property Trustee will act as registrar and transfer agent for the New
Capital Securities. The Property Trustee also acts as registrar and transfer
agent for the Old Capital Securities.
Registration of transfers of the Capital Securities will be effected
without charge by or on behalf of the Trust, but upon payment of any tax or
other governmental charges that may be imposed in connection with any transfer
or exchange. The Trust will not be required to register or cause to be
registered the transfer of the Capital Securities after they have been called
for redemption.
Information Concerning the Property Trustee
The Property Trustee, other than during the occurrence and continuance of
an Event of Default under the Trust Agreement, undertakes to perform only such
duties as are specifically set forth in the Trust Agreement and, after such
Event of Default, must exercise the same degree of care and skill as a prudent
person would exercise or use in the conduct of his or her own affairs. Subject
to this provision, the Property Trustee is under no obligation to exercise any
of the powers vested in it by the Trust Agreement at the request of any holder
of Trust Securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby. The Property Trustee
will have no liability except for its own bad faith, negligence or willful
misconduct.
Miscellaneous
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as other than a grantor trust for United
States federal income tax purposes and so that the Subordinated Debentures will
be treated as indebtedness of the Company for United States federal income tax
purposes. In this connection, the Company and the Administrative Trustees are
authorized to take any action, not inconsistent with applicable law, the
certificate of trust of the Trust or the Trust Agreement, that the Company and
the Administrative Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the Trust Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or
pledge any of its assets.
Description of Subordinated Debentures
The Old Subordinated Debentures were issued and the New Subordinated
Debentures will be issued as a separate series under the Indenture. The
Indenture has been qualified under the Trust Indenture Act. In the event the
Exchange Offer is consummated, ComEd will exchange the New Subordinated
Debentures for the Old Subordinated Debentures. The forms and terms of the New
Subordinated Debentures are identical in all material respects to the forms and
terms of the Old Subordinated Debentures, except that the New Subordinated
Debentures have been registered under the Securities Act and therefore are not
subject to certain
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restrictions on transfer applicable to the Old Subordinated Debentures.
Accordingly, as the context may require, unless expressly stated otherwise,
"Subordinated Debentures" means the Old Subordinated Debentures and, in the
event the Exchange Offer is consummated, the New Subordinated Debentures. The
following is a summary of all material terms and provisions of the Subordinated
Debentures and the Indenture; however, the summary does not purport to be
complete, and where reference is made to particular provisions of the Indenture,
such provisions, including the definitions of certain terms, some of which are
not otherwise defined herein, are qualified in their entirety by reference to
all of the provisions of the Indenture and those terms made a part of the
Indenture by the Trust Indenture Act.
General
Concurrently with the issuance of the Old Capital Securities, the Trust
invested the proceeds thereof, together with the consideration paid by ComEd for
the Common Securities, in the Old Subordinated Debentures. Pursuant to the
Exchange Offer, ComEd will exchange the Old Subordinated Debentures as soon as
practicable after the consummation of the Exchange Offer and the Old
Subordinated Debentures will be retired and cancelled.
The Subordinated Debentures bear interest at the annual rate of 8.50% of
the principal amount thereof, payable semi-annually in arrears on January 15 and
July 15 of each year (each, an "Interest Payment Date"), commencing July 15,
1997, to the person in whose name each Subordinated Debenture is registered,
subject to certain exceptions, at the close of business on the first day of the
month in which the relevant payment date falls (the "Regular Record Date"). It
is anticipated that, until the liquidation, if any, of the Trust, each
Subordinated Debenture will be held in the name of the Property Trustee in trust
for the benefit of the holders of the Trust Securities. The amount of interest
payable for any period will be computed on the basis of a 360-day year
consisting of twelve 30-day months. In the event that any date on which interest
is payable on the Subordinated Debentures is not a Business Day, then payment of
the interest payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) with the same force and effect as if made on the date such payment
was originally payable. The amount of interest payable for any period shorter
than a full month shall be computed on the basis of the actual number of days
elapsed in such period. Accrued interest that is not paid on the applicable
Interest Payment Date will bear additional interest on the amount thereof (to
the extent permitted by law) at the rate per annum of 8.50% thereof, compounded
semi-annually. The term "interest," as used herein, shall include semi-annual
interest payments, interest on semi-annual interest payments not paid on the
applicable Interest Payment Date and Additional Sums (as defined below), as
applicable.
The New Subordinated Debentures will be issued in denominations of $1,000
and integral multiples thereof. The Subordinated Debentures mature on January
15, 2027 (the "Stated Maturity Date"). The Subordinated Debentures are not
subject to a sinking fund provision.
The Subordinated Debentures rank pari passu with all Other Indebtedness,
including the 8.48% Debentures, and are unsecured and subordinate and junior in
right of payment to the extent and in the manner set forth in the Indenture to
all Senior Indebtedness. See "--Subordination." The Indenture does not limit the
incurrence or issuance of other secured or unsecured debt of the Company,
including Senior Indebtedness. See "--Subordination."
Form, Registration and Transfer
If the Subordinated Debentures are distributed to the holders of the Trust
Securities, the Subordinated Debentures may be represented by one or more global
certificates registered in the name of Cede & Co. as
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the nominee of DTC. The depositary arrangements for such Subordinated
Debentures are expected to be substantially similar to those in effect for
the Capital Securities. For a description of DTC and the terms of the
depositary arrangements relating to payments, transfers, voting rights,
redemptions and other notices and other matters, see "Description of
Capital Securities--Form, Denomination, Book-Entry Procedures and
Transfer."
Payment and Paying Agents
Payment of principal of and premium (if any) on the Subordinated
Debentures will be made only against surrender to the Paying Agent of the
Subordinated Debentures. Principal of and any premium and interest, if
any, on Subordinated Debentures will be payable, subject to any applicable
laws and regulations, at the office of such Paying Agent or Paying Agents
as ComEd may designate from time to time, except that at the option of
ComEd, payment of any interest may be made by check mailed to the address
of the person entitled thereto as such address shall appear in the
Debenture register with respect to the Subordinated Debentures. Payment of
interest on the Subordinated Debentures on any Interest Payment Date will
be made to the person in whose name the Subordinated Debenture (or
predecessor security) is registered at the close of business on the Regular
Record Date for such interest payment.
The Debenture Trustee will act as Paying Agent with respect to the
Subordinated Debentures. ComEd may at any time designate additional Paying
Agents or rescind the designation of any Paying Agents or approve a change
in the office through which any Paying Agent acts, except that ComEd will
be required to maintain a Paying Agent at the place of payment.
All moneys paid by ComEd to a Paying Agent for the payment of the
principal of or premium or interest, if any, on the Subordinated Debentures
which remain unclaimed at the end of two years after such principal,
premium, if any, or interest shall have become due and payable will be
repaid to ComEd and the holder of such Subordinated Debentures will
thereafter look only to ComEd for payment thereof.
Option to Extend Interest Payment Date
So long as no Debenture Event of Default has occurred and is
continuing, the Company has the right under the Indenture at any time
during the term of the Subordinated Debentures to defer the payment of
interest by extending the interest payment period at any time and from time
to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period, provided that no Extension Period may
extend beyond the Stated Maturity Date. At the end of such Extension
Period, the Company must pay all interest then accrued and unpaid (together
with interest thereon at the annual rate of 8.50%, compounded semi-
annually, to the extent permitted by applicable law). During an Extension
Period, interest will continue to accrue and holders of Subordinated
Debentures (and holders of the Trust Securities while Trust Securities are
outstanding) will be required to accrue interest income for United States
federal income tax purposes prior to the receipt of cash attributable to
such income. See "Certain Federal Income Tax Consequences--Interest Income
and Original Issue Discount."
During any such Extension Period, the Company may not (i) declare or
pay any dividends on, make any distributions with respect to, or redeem,
purchase or make a liquidation payment with respect to, any of the
Company's capital stock (which includes common, preference and preferred
stock) or (ii) make any payment of principal, interest or premium, if any,
on or repay, repurchase or redeem any debt securities (including
guarantees) issued by the Company that rank pari passu with or junior in
right of payment to the Subordinated Debentures, including the 8.48%
Debentures, or (iii) make any guarantee payments with respect to the
foregoing.
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Prior to the termination of any such Extension Period, the Company may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or to
extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due on any Interest Payment
Date, the Company may elect to begin a new Extension Period, subject to the
above requirements. No interest shall be due and payable during an Extension
Period, except at the end thereof. As long as the Property Trustee is the only
holder of the Subordinated Debentures, the Company must give the Property
Trustee, the Administrative Trustees and the Debenture Trustee notice of its
election of any Extension Period (or an extension thereof) at least ten days
prior to the earlier of (i) the date Distributions on the Trust Securities would
have been payable except for the election to begin or extend such Extension
Period or (ii) the date the Trust or the Administrative Trustees are required to
give notice to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of Capital Securities of the record date or the date
such Distributions are payable, but in any event not less than 10 days prior to
such record date. The Property Trustee shall give notice of the Company's
election to begin or extend a new Extension Period to the holders of the Capital
Securities. There is no limitation on the number of times that the Company may
elect to begin an Extension Period.
Optional Prepayment
The Subordinated Debentures will be prepayable, in whole or in part, at the
option of the Company on or after January 15, 2007, at a prepayment price (the
"Optional Prepayment Price") equal to the percentage of the outstanding
principal amount of the Subordinated Debentures specified below, plus, in each
case, accrued and unpaid interest thereon to the date of prepayment if redeemed
during the 12-month period beginning January 15 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2007.................... 104.250
2008.................... 103.825
2009.................... 103.400
2010.................... 102.975
2011.................... 102.550
2012.................... 102.125
2013.................... 101.700
2014.................... 101.275
2015.................... 100.850
2016.................... 100.425
2017 and thereafter..... 100.000
</TABLE>
Tax Event Prepayment
If a Tax Event shall occur and be continuing, the Company may, at its
option, prepay the Subordinated Debentures in whole (but not in part) at any
time prior to January 15, 2007 and within 90 days of the occurrence of such Tax
Event, at a prepayment price (the "Tax Event Prepayment Price") equal to the
greater of (i) 100% of the principal amount of such Subordinated Debentures or
(ii) the sum, as determined by a Quotation Agent, of the present values of the
principal amount and premium payable with respect to an optional redemption of
Subordinated Debentures on January 15, 2007, together with scheduled payments of
interest on the Subordinated Debentures accruing from the prepayment date to and
including January 15, 2007, in each case discounted to the prepayment date on a
semi-annual basis (assuming a 360-day year consisting
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of twelve 30-day months) at the Adjusted Treasury Rate, plus, in each case,
accrued interest thereon to the date of prepayment.
Notice of any prepayment will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Subordinated Debentures to
be prepaid at its registered address. Unless the Company defaults in payment of
the prepayment price, on and after the prepayment date interest ceases to accrue
on such Subordinated Debentures called for prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges, the Company will pay as additional amounts on the
Subordinated Debentures the Additional Sums.
A "Tax Event" means the receipt by the Company and the Trust of an opinion
of nationally recognized independent tax counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws or any regulations thereunder of the
United States or any political subdivision or taxing authority thereof or
therein, or (b) any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement or decision is announced on or after January 24,
1997, there is more than an insubstantial risk that (i) the Trust is, or will be
within 90 days of the date of such opinion, subject to United States federal
income tax with respect to income received or accrued on the Subordinated
Debentures, (ii) interest payable by the Company on the Subordinated Debentures
is not, or within 90 days of the date of such opinion will not be, deductible by
the Company, in whole or in part, for United States federal income tax purposes,
or (iii) the Trust is, or will be within 90 days of the date of such opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
"Adjusted Treasury Rate" means, with respect to any prepayment date, the
rate per annum equal to (i) the yield, under the heading which represents the
average for the immediately prior week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which is
published weekly by the Federal Reserve and which establishes yields on actively
traded United States Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities," for the maturity date corresponding to
the Initial Optional Prepayment Date (if no maturity date is within three months
before or after the Initial Optional Prepayment Date, yields for the first two
published maturities most closely corresponding to the Initial Optional
Prepayment Date shall be determined and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis, rounding
to the nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such prepayment date plus, in either case (A)
1.25% if such prepayment date occurs on or prior to January 15, 1998 and (B)
0.50% in all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity date corresponding to the
Initial Optional Prepayment Date that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities with a maturity date corresponding to the
Initial Optional Prepayment Date. If no United States Treasury security has a
maturity date which is within three months before or after the Initial Optional
Prepayment Date, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the calculation
of the Adjusted Treasury Rate pursuant to clause (ii) of the definition thereof
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month.
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"Comparable Treasury Price" means, with respect to any prepayment date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of three Reference Treasury Dealer Quotations for such prepayment date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Debenture Trustee obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such Quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Trustee after consultation with the Company.
"Reference Treasury Dealer" means: (i) Merrill Lynch Government Securities,
Inc. and its successors; provided, however, that if the foregoing shall cease to
be a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by the
Trustee after consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such prepayment date.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by the Trust on the
outstanding Capital Securities and Common Securities shall not be reduced as a
result of any additional taxes, duties, assessments and other governmental
charges to which the Trust has become subject as a result of a Tax Event.
Restrictions on Certain Payments
If (i) there shall have occurred any event that would constitute a
Debenture Event of Default or (ii) ComEd shall be in default with respect to its
payment of any obligations under the Guarantee or the Common Securities
Guarantee (as defined under "Description of Guarantee--General"), then (a) ComEd
shall not declare or pay any dividend on, make any distributions with respect
to, or redeem, purchase or make a liquidation payment with respect to, any of
its capital stock, (b) ComEd shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by ComEd which rank pari passu with or junior to
the Subordinated Debentures, including the 8.48% Debentures, and (c) ComEd shall
not make any guarantee payments with respect to the foregoing (other than
pursuant to the Guarantee).
If ComEd shall have given notice of its election of an Extension Period as
provided in the Indenture and such period, or any extension thereof, shall be
continuing, then (a) ComEd shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase or make a liquidation payment
with respect to, any of its capital stock, (b) ComEd shall not make any payment
of interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by ComEd which rank pari passu
with or junior to the Subordinated Debentures, including the 8.48% Debentures,
and (c)
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ComEd shall not make any guarantee payments with respect to the foregoing (other
than pursuant to the Guarantee).
For so long as the Trust Securities remain outstanding, ComEd has
covenanted (i) to directly or indirectly maintain 100% direct or indirect
ownership of the Common Securities of the Trust; provided, however, that any
permitted successor of ComEd under the Indenture may succeed to ComEd's
ownership of such Common Securities, (ii) not to cause, as sponsor of the Trust,
or to permit, as holder of the Common Securities, the dissolution, winding-up or
termination of the Trust, except in connection with a distribution of the
Subordinated Debentures as provided in the Trust Agreement and in connection
with certain mergers, consolidations or amalgamations and (iii) to use its
reasonable efforts to cause the Trust (a) to remain a business trust, except in
connection with the distribution of Subordinated Debentures to the holders of
Trust Securities in liquidation of the Trust, the redemption of all of the Trust
Securities of the Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the Trust Agreement, and (b) to otherwise continue to be
classified as a grantor trust for United States federal income tax purposes.
Modification of Indenture
The Indenture contains provisions permitting ComEd and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Subordinated Debentures, to modify the Indenture or any
supplemental indenture affecting that series or the rights of the holders of the
Subordinated Debentures; provided that no such modification may, without the
consent of the holder of each outstanding Subordinated Debenture affected
thereby, (i) extend the Stated Maturity Date of the Subordinated Debentures, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof, without the consent of the holders of the Subordinated Debentures so
affected or (ii) reduce the percentage of Subordinated Debentures, the holders
of which are required to consent to any such supplemental indenture, without the
consent of the holders of each Subordinated Debenture then outstanding and
affected thereby.
In addition, ComEd and the Debenture Trustee may execute, without the
consent of holders of the Subordinated Debentures, any supplemental indenture
for certain other usual purposes including the creation of any new series of
subordinated debt securities.
Debenture Events of Default
In case any Debenture Event of Default shall occur and be continuing, the
Property Trustee, as the holder of the Subordinated Debentures, will have the
right to declare the principal of and the interest on the Subordinated
Debentures (including any Additional Interest, if any) and any other amounts
payable under the Indenture to be forthwith due and payable and to enforce its
other rights as a creditor with respect to the Subordinated Debentures.
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Event of Default"
with respect to the Subordinated Debentures (a "Debenture Event of Default"):
(a) failure for 30 days to pay interest on the Subordinated
Debentures, including any Additional Interest in respect thereof, when due;
provided, however, that a valid extension of the interest payment period by
ComEd shall not constitute a default in the payment of interest for this
purpose; or
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(b) failure to pay principal or premium, if any, on the
Subordinated Debentures when due whether at maturity, upon earlier
redemption or otherwise; or
(c) failure to observe or perform any other covenant (other than
those specifically relating to another series of subordinated debt
securities) contained in the Indenture for 90 days after written
notice to ComEd from the Debenture Trustee or the holders of at least
25% in principal amount of the outstanding Subordinated Debentures; or
(d) certain events of bankruptcy, insolvency or reorganization of
ComEd; or
(e) the voluntary or involuntary dissolution, winding-up or
termination of the Trust, except in connection with the distribution
of Subordinated Debentures to the holders of Capital Securities in
liquidation of the Trust, the redemption of all outstanding Trust
Securities of the Trust and certain mergers, consolidations or
amalgamations permitted by the Trust Agreement.
The holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee. The
Debenture Trustee or the holders of not less than 25% in aggregate outstanding
principal amount of the Subordinated Debentures may declare the principal due
and payable immediately on default, but the holders of a majority in aggregate
outstanding principal amount may annul such declaration and waive the default if
the default has been cured and a sum sufficient to pay all matured installments
of interest and principal due otherwise than by acceleration and any applicable
premium has been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures affected thereby may, on behalf of the holders of all
the Subordinated Debentures, waive any past default, except (i) a default in the
payment of principal, premium, if any, or interest (unless such default has been
cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration and any applicable premium has been
deposited with the Debenture Trustee) or (ii) a default in the covenant of ComEd
not to declare or pay dividends on, or make distributions with respect to, or
redeem, purchase or acquire any of its capital stock during an Extension Period.
A Debenture Event of Default also constitutes an Event of Default under the
Trust Agreement. The holders of Capital Securities in certain circumstances have
the right to direct the Property Trustee to exercise its rights as the holder of
the Subordinated Debentures. See "Description of Capital Securities -- Events of
Default; Notice" and "-- Voting Rights; Amendment of the Trust Agreement."
Enforcement of Certain Rights by Holders of Capital Securities
If a Debenture Event of Default shall have occurred and be continuing and
shall be attributable to the failure of the Company to pay interest (or premium,
if any) on, or principal of, the Subordinated Debentures on the due date, a
holder of Capital Securities may institute a Direct Action. The Company may not
amend the Indenture to remove the foregoing right to bring a Direct Action
without the prior written consent of the holders of all of the Capital
Securities. If the right to bring a Direct Action is removed following the
Exchange Offer, the Trust may become subject to the reporting obligations under
the Exchange Act. Notwithstanding any payments made to a holder of Capital
Securities by the Company in connection with a Direct Action, the Company shall
remain obligated to pay the principal of (or premium, if any) or interest on the
Subordinated Debentures, and the Company shall be subrogated to the rights of
the holder of such Capital Securities with
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respect to payments on the Capital Securities to the extent of any payments
made by the Company to such holder in any Direct Action.
The holders of the Capital Securities will not be able to exercise directly
any remedies, other than those set forth in the preceding paragraph, available
to the holders of the Subordinated Debentures unless there shall have been an
Event of Default under the Trust Agreement. See "Description of Capital
Securities--Events of Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture does not contain any covenant which restricts the Trust's or
ComEd's ability to merge or consolidate with or into any other corporation, sell
or convey all or substantially all of its assets to any person, firm or
corporation or otherwise engage in restructuring transactions.
The general provisions of the Indenture do not afford holders of the
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving ComEd that may adversely affect holders of the
Subordinated Debentures.
Satisfaction and Discharge
Under the terms of the Indenture, ComEd will be discharged from any and all
obligations in respect of the Subordinated Debentures (except in each case for
certain obligations with respect to denominations and provisions for payment of
the Subordinated Debentures and obligations to register the transfer or exchange
of Subordinated Debentures, replace stolen, lost or mutilated Subordinated
Debentures, maintain paying agencies and hold moneys for payment in trust) if
ComEd (i) deposits with the Debenture Trustee, in trust, moneys or governmental
obligations, in an amount sufficient to pay all the principal of, and interest
on, the Subordinated Debentures on the dates such payments are due in accordance
with the terms of such Subordinated Debentures and (ii) delivers to the
Debenture Trustee an opinion of counsel to the effect that, based upon ComEd's
receipt from, or the publication by, the Internal Revenue Service of a ruling or
a change in law, the holders of the Subordinated Debentures will not recognize
income, gain or loss for United States federal income tax purposes as a result
of the deposit, defeasance and discharge and will be subject to United States
federal income tax on the same amount and in the same manner and at the same
times as would have been the case if such deposit, defeasance or discharge had
not occurred.
Subordination
The Indenture provides that the Subordinated Debentures are subordinated
and junior in right of payment to all Senior Indebtedness of ComEd, whether now
existing or hereafter incurred. No payment of principal of (including redemption
payments, if any), premium, if any, or interest on, the Subordinated Debentures
may be made if (a) any Senior Indebtedness of ComEd is not paid when due and any
applicable grace period with respect to such default has ended with such default
not being cured or waived or ceasing to exist, or (b) the maturity of any Senior
Indebtedness has been accelerated because of a default. Upon any distribution of
assets of ComEd to creditors upon any dissolution, winding-up, liquidation or
reorganization, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all principal of, premium, if any, and
interest due or to become due on, all Senior Indebtedness must be paid in full
before the holders of the Subordinated Debentures are entitled to receive or
retain any payment. The rights of the holders of the Subordinated Debentures
will be subrogated to the rights of the holders of Senior Indebtedness to
receive payments or distributions applicable to such Senior Indebtedness until
all amounts owing on the Subordinated Debentures are paid in full.
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The term "Senior Indebtedness" means (i) any payment in respect of (a)
indebtedness of ComEd for money borrowed and (b) indebtedness evidenced by
securities, debentures, bonds, notes or other similar instruments issued by
ComEd including, without limitation, indebtedness evidenced by securities issued
pursuant to its Mortgage dated July 1, 1923, as supplemented, and indentures
with various trustees (other than the Indenture); (ii) all capital lease
obligations of ComEd; (iii) all obligations of ComEd issued or assumed as the
deferred purchase price of property, all conditional sale obligations of ComEd
and all obligations of ComEd under any title retention agreement (but excluding
trade accounts payable arising in the ordinary course of business); (iv) all
obligations of ComEd for the reimbursement on any letter of credit, banker's
acceptance, security purchase facility or similar credit transaction; (v) all
obligations of the type referred to in clauses (i) through (iv) above of other
persons for the payment of which ComEd is responsible or liable as obligor,
guarantor or otherwise; and (vi) all obligations of the type referred to in
clauses (i) through (v) above of other persons secured by any lien on any
property or asset of ComEd (whether or not such obligation is assumed by ComEd),
except for (1) any such indebtedness that is by its terms subordinated to or
pari passu with the Subordinated Debentures, as the case may be, including all
other debt securities and guarantees in respect of those debt securities, issued
to any other trusts, partnerships or other entities affiliated with ComEd which
act as a financing vehicle of ComEd in connection with the issuance of preferred
securities by such entity or other securities which rank pari passu with, or
junior to, the Capital Securities, and (2) any indebtedness between or among
ComEd and its affiliates. Such Senior Indebtedness shall continue to be Senior
Indebtedness and be entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness.
The Indenture does not limit the aggregate amount of Senior Indebtedness
which may be issued by ComEd. As of March 31, 1997, Senior Indebtedness of ComEd
aggregated approximately $7,072 million. The Company expects from time to time
to incur additional indebtedness constituting Senior Indebtedness.
Removal of Restrictions on Transfer
The Old Subordinated Debentures may be transferred only in blocks having an
aggregate principal amount of not lees than $100,000. New Subordinated
Debentures will not contain such a restriction on transfer.
Governing Law
The Indenture and the New Subordinated Debentures will be governed by and
construed in accordance with the laws of the State of New York.
Information Concerning the Debenture Trustee
Following the Exchange Offer and the qualification of the Indenture under
the Trust Indenture Act, the Debenture Trustee shall have and be subject to all
the duties and responsibilities specified with respect to an indenture trustee
under the Trust Indenture Act. The Debenture Trustee, prior to default,
undertakes to perform only such duties as are specifically set forth in the
Indenture and, after default, shall exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provision, the Debenture Trustee is under no obligation to
exercise any of the powers vested in it by the Indenture at the request of any
holder of Subordinated Debentures, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby; but the foregoing shall not relieve the Debenture Trustee, upon the
occurrence of a Debenture Event of Default, from exercising the rights and
powers vested in it by the Indenture. The Debenture Trustee is not required to
expand or risk its
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own funds or otherwise incur personal financial liability in the performance of
its duties if the Debenture Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.
Description of Guarantee
The Old Guarantee was executed and delivered by ComEd concurrently with the
issuance by the Trust of the Old Capital Securities for the benefit of the
holders from time to time of the Old Capital Securities. In the event the
Exchange Offer is consummated, ComEd will exchange the New Guarantee for the Old
Guarantee. The New Guarantee Agreement has been qualified under the Trust
Indenture Act. The form and terms of the New Guarantee are identical in all
material respects to the form and terms of the Old Guarantee, except that the
New Guarantee has been registered under the Securities Act. Accordingly, as the
context may require, unless expressly stated otherwise, "Guarantee" means the
Old Guarantee and, in the event the Exchange Offer is consummated, the New
Guarantee. The following is a summary of all material terms and provisions of
the Old Guarantee Agreement and the New Guarantee Agreement; however, the
summary does not purport to be complete and is subject to, and qualified in its
entirety by reference to, all of the provisions of the Old Guarantee Agreement
and the New Guarantee Agreement, including the definitions therein of certain
terms, and the Trust Indenture Act. Wilmington Trust Company will act as
Guarantee Trustee and will hold the New Guarantee for the benefit of the holders
of all Capital Securities.
General
Under the New Guarantee ComEd will irrevocably agree (and under the Old
Guarantee has agreed) to pay in full on a subordinated basis, to the extent set
forth herein, the Guarantee Payments (as defined below) (without duplication of
amounts theretofore paid by the Trust) to the holders of the Capital Securities,
as and when due, regardless of any defense, right of set-off or counterclaim
that the Trust may have or assert other than the defense of payment. The
following payments with respect to the Capital Securities, to the extent not
paid by or on behalf of the Trust (the "Guarantee Payments"), will be subject to
the Guarantee: (i) any accumulated and unpaid Distributions required to be paid
on Capital Securities, to the extent that the Trust has funds on hand legally
available therefor at such time, (ii) the applicable Redemption Price with
respect to Capital Securities called for redemption, to the extent that the
Trust has funds on hand legally available therefor at such time, or (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Trust
(other than in connection with the distribution of Subordinated Debentures to
the holders of Capital Securities), the lesser of (a) the Liquidation
Distribution and (b) the amount of assets of the Trust remaining available for
distribution to holders of Capital Securities. The Company's obligation to make
a Guarantee Payment may be satisfied by direct payment of the required amounts
by the Company to the holders of the Capital Securities or by causing the Trust
to pay such amounts to such holders.
The Guarantee ranks subordinate and junior in right of payment to all
Senior Indebtedness to the extent provided therein. See "--Status of the
Guarantee." The Guarantee does not limit the incurrence or issuance of other
secured or unsecured debt of the Company, including Senior Indebtedness, whether
under the Indenture, any other indenture that the Company may enter into in the
future or otherwise.
The Company has, through the Guarantee, the Trust Agreement, the
Subordinated Debentures and the Indenture, taken together, fully, irrevocably
and unconditionally guaranteed all of the Trust's obligations under the Capital
Securities.
ComEd has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Trust with respect to the Common Securities
(the "Common Securities Guarantee") to the same extent as the
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Guarantee, except that upon the occurrence and during the continuation of a
Debenture Event of Default, holders of Capital Securities shall have priority
over holders of Common Securities with respect to distributions and payments on
liquidation, redemption or otherwise.
Status of the Guarantee
The Guarantee constitutes an unsecured obligation of the Company and ranks
subordinate and junior in right of payment to all Senior Indebtedness in the
same manner as Subordinated Debentures. The Guarantee is also subordinate and
junior in right of payment to the Subordinated Debentures and any Other
Indebtedness issued by the Company, including its 8.48% Debentures.
The Guarantee ranks pari passu with all Other Guarantees issued by the
Company, including its guarantee of the 8.48% Preferred Securities. The
Guarantee constitutes a guarantee of payment and not of collection (i.e., the
guaranteed party may institute a legal proceeding directly against the Company
to enforce its rights under the Guarantee without first instituting a legal
proceeding against any other person or entity). The Guarantee is held for the
benefit of the holders of the Capital Securities. The Guarantee will not be
discharged except by payment of the Guarantee Payments in full to the extent not
paid by the Trust or upon distribution to the holders of the Capital Securities
of the Subordinated Debentures. The Guarantee does not place a limitation on the
amount of additional Senior Indebtedness that may be incurred by the Company.
The Company expects from time to time to incur additional indebtedness
constituting Senior Indebtedness.
Amendments and Assignment
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Capital Securities (in which case no vote will be
required), the Guarantee may not be amended without the prior approval of the
holders of a majority of the Liquidation Amount of such outstanding Capital
Securities. The manner of obtaining any such approval will be as set forth under
"Description of Capital Securities--Voting Rights; Amendment of the Trust
Agreement." All guarantees and agreements contained in the Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Company and shall inure to the benefit of the holders of the Capital
Securities then outstanding.
Events of Default
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of a majority in Liquidation Amount of the Capital Securities will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Guarantee Trustee in respect of the Guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under the Guarantee provided, however, that the Guarantee Trustee shall have the
right to decline to follow any such direction in certain circumstances,
including in a circumstance where the Guarantee Trustee shall determine that
such direction would be unjustly prejudicial to holders not taking part in such
direction.
If the Guarantee Trustee fails to enforce the Guarantee, any holder of the
Capital Securities may institute a legal proceeding directly against the Company
to enforce its rights under the Guarantee without first instituting a legal
proceeding against the Trust, the Guarantee Trustee or any other person or
entity.
The Company, as guarantor, will be required to file annually with the
Guarantee Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
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Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the Guarantee, must exercise the same degree of care and
skill as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs. Subject to this provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by the
Guarantee at the request of any holder of the Capital Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
Termination of the Guarantee
The Guarantee will terminate and be of no further force and effect upon
full payment of the applicable Redemption Price of the Capital Securities, upon
full payment of the Liquidation Amount payable upon liquidation of the Trust or
upon distribution of the Subordinated Debentures to the holders of the Capital
Securities. The Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any holder of the Capital Securities must
restore payment of any sums paid under the Capital Securities or the Guarantee.
Governing Law
The Old Guarantee is and the New Guarantee will be governed by and
construed in accordance with the laws of the State of New York.
DESCRIPTION OF OLD SECURITIES
The forms and terms of the Old Securities are identical in all material
respects to the forms and terms of the New Securities, except that the Old
Securities have not been registered under the Securities Act, are subject to
certain restrictions on transfer and are entitled to certain rights under the
Registration Rights Agreement (which rights will terminate upon consummation of
the Exchange Offer, except under limited circumstances). Holders of Old Capital
Securities should review the information set forth under "Risk Factors--
Consequences of a Failure to Exchange Old Capital Securities" and "Description
of Securities."
RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE
SUBORDINATED DEBENTURES AND THE GUARANTEE
Full and Unconditional Guarantee
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Trust has funds on hand legally available for the payment of
such Distributions) will be irrevocably guaranteed by the Company as and to the
extent set forth under "Description of Securities--Description of Guarantee."
Taken together, the Company's obligations under the Subordinated Debentures, the
Indenture, the Trust Agreement and the Guarantee will provide, in the aggregate,
a full, irrevocable and unconditional guarantee of payments of Distributions and
other amounts due on the Capital Securities. No single document standing alone
or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that provides a full, irrevocable and unconditional guarantee of the
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Trust's obligations under the Capital Securities. If and to the extent that the
Company does not make the required payments on the Subordinated Debentures, the
Trust will not have sufficient funds to make the related payments, including
Distributions, on the Capital Securities. The Guarantee does not cover any such
payment when the Trust does not have sufficient funds on hand legally available
therefor. In such event, the remedy of a holder of Capital Securities is to
institute a Direct Action. The obligations of the Company under the Guarantee
will be subordinate and junior in right of payment to all Senior Indebtedness.
Sufficiency of Payments
As long as payments of interest and other payments are made when due on the
Subordinated Debentures, such payments will be sufficient to cover Distributions
and other payments due on the Capital Securities, primarily because: (i) the
aggregate principal amount or Prepayment Price of the Subordinated Debentures
will be equal to the sum of the Liquidation Amount or Redemption Price, as
applicable, of the Capital Securities and Common Securities; (ii) the interest
rate and interest and other payment dates on the Subordinated Debentures will
match the Distribution rate and Distribution and other payment dates for the
Trust Securities; (iii) the Company shall pay for any and all costs, expenses
and liabilities of the Trust except the Trust's obligations to holders of Trust
Securities under such Trust Securities; and (iv) the Trust Agreement will
provide that the Trust is not authorized to engage in any activity that is not
consistent with the limited purposes thereof.
Enforcement Rights of Holders of Capital Securities
A holder of any Capital Security may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the Trust or any
other person or entity. A default or event of default under any Senior
Indebtedness would not constitute a default or Event of Default under the Trust
Agreement. However, in the event of payment defaults under, or acceleration of,
Senior Indebtedness, the subordination provisions of the Indenture will provide
that no payments may be made in respect of the Subordinated Debentures until
such Senior Indebtedness has been paid in full or any payment default thereunder
has been cured or waived. Failure to make required payments on Subordinated
Debentures would constitute an Event of Default under the Trust Agreement.
Limited Purpose of the Trust
The Capital Securities represent preferred beneficial interests in the
Trust, and the Trust exists for the sole purpose of issuing and selling the
Trust Securities, using the proceeds from the sale of the Trust Securities to
acquire the Subordinated Debentures and engaging in only those other activities
necessary, advisable or incidental thereto.
Rights Upon Termination
Unless the Subordinated Debentures are distributed to holders of the Trust
Securities, upon any voluntary or involuntary termination and liquidation of the
Trust, the holders of the Trust Securities will be entitled to receive, out of
assets held by the Trust, the Liquidation Distribution in cash. See "Description
of Securities--Description of Capital Securities--Liquidation of the Trust and
Distribution of Subordinated Debentures." Upon any voluntary or involuntary
liquidation or bankruptcy of the Company, the Property Trustee, as holder of the
Subordinated Debentures, would be a subordinated creditor of the Company,
subordinated in right of payment to all Senior Indebtedness as set forth in the
Indenture, but entitled to receive payment in full of principal (and premium, if
any) and interest, before any stockholders of the Company
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receive payments or distributions. Since the Company will be the guarantor under
the Guarantee and will agree to pay for all costs, expenses and liabilities of
the Trust (other than the Trust's obligations to the holders of its Trust
Securities), the positions of a holder of Capital Securities and a holder of
Subordinated Debentures relative to other creditors and to stockholders of the
Company in the event of liquidation or bankruptcy of the Company are expected to
be substantially the same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
General
The following is a summary of certain of the material United States federal
income tax consequences of the purchase, ownership and disposition of Capital
Securities. Unless otherwise stated, this summary deals only with Capital
Securities held as capital assets. This summary does not address all the tax
consequences that may be relevant to holders that may be subject to special tax
treatment such as, for example, banks, real estate investment trusts, regulated
investment companies, insurance companies, dealers in securities or currencies,
tax-exempt investors, persons whose functional currency is other than the United
States dollar, persons who hold Capital Securities as part of a straddle,
hedging or conversion transaction or, except as specifically described herein,
foreign taxpayers. In addition, this summary does not address any aspects of
state, local or foreign laws. This summary is based on the Internal Revenue Code
of 1986, as amended (the "Code"), Treasury regulations promulgated thereunder
and administrative and judicial interpretations thereof, as of the date hereof,
all of which are subject to change, possibly on a retroactive basis. Each holder
should consult its tax advisor as to its particular tax consequences of
acquiring, holding and disposing of the Capital Securities, including the tax
consequences under state, local and foreign laws.
Under current United States federal income tax law, the exchange of Old
Capital Securities for New Capital Securities pursuant to the Exchange Offer
will not be a taxable event to holders. The New Capital Securities will be
treated as a continuation of the Old Capital Securities. Accordingly, a holder
will have the same adjusted tax basis and holding period in the New Capital
Securities that such holder had in the Old Capital Securities exchanged
therefor.
Classification of the Subordinated Debentures
In connection with the issuance of the Old Capital Securities, Sidley &
Austin, counsel to the Company, has rendered its opinion to the effect that,
under then current law and assuming full compliance with the terms of the
Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Subordinated Debentures held by the
Trust will be classified for United States federal income tax purposes as
indebtedness of the Company.
Classification of the Trust
In connection with the issuance of the Old Capital Securities, Sidley &
Austin, counsel to the Company and special counsel to the Trust, has rendered
its opinion to the effect that, under then current law and assuming full
compliance with the terms of the Trust Agreement and the Indenture (and certain
other documents), and based on certain facts and assumptions contained in such
opinion, the Trust will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation.
Accordingly, for United States federal income tax purposes, each holder of
Capital Securities will generally be considered the owner of an undivided
interest in the Subordinated Debentures, and each holder will be required to
include in its gross income any interest paid or accrued (or original issue
discount ("OID")
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accrued) with respect to its allocable share of those Subordinated Debentures.
Corporate holders of Capital Securities will not be entitled to a dividends-
received deduction with respect to any income recognized with respect to the
Capital Securities. Investors should be aware that the foregoing opinions of
Sidley & Austin will not be confirmed by the Internal Revenue Service (the
"Service"), by private ruling or otherwise, and are not binding on the Service
or the courts. By its acceptance of a Capital Security, a holder agrees to treat
the Capital Security and the Subordinated Debentures consistently with the
foregoing opinions.
Interest Income and Original Issue Discount
Unless the Subordinated Debentures are considered issued with OID, stated
interest on the Subordinated Debentures will be taxable to a holder as ordinary
income at the time such interest is paid (if the holder uses the cash method of
accounting for tax purposes) or accrued (if the holder uses the accrual method
of accounting for tax purposes). Under regulations of the U.S. Treasury
Department, the Subordinated Debentures will not be considered issued with OID
if the Subordinated Debentures provide terms and conditions that make the
likelihood of the Company exercising its right to defer interest (as described
under "Description of Securities--Description of Subordinated Debentures--Option
to Extend Interest Payment Date") a "remote contingency" at the time the Old
Subordinated Debentures were issued. The Company believes that such likelihood
is remote, because exercise of its right to defer interest would prevent the
Company from declaring dividends on its capital stock. Accordingly, the Company
intends to take the position that the Subordinated Debentures were not issued
with OID. However, the definition of the term "remote" in the regulations has
not yet been addressed in any rulings or other interpretations by the Service,
and it is possible that the Service could assert that the Subordinated
Debentures were issued with OID.
If, notwithstanding the Company's current belief, it does exercise its
right to defer interest payments, the Subordinated Debentures would be treated
as if they were retired and then reissued with OID at such time. In such case,
the amount of OID would generally be equal to the interest payable thereafter.
If the Subordinated Debentures were treated as having been issued or
reissued with OID (either because the likelihood of exercise of such right is
not considered a remote contingency at the time of issuance or because the
Company exercises its right to defer interest payments), holders would include
interest in income on an economic accrual basis, regardless of their method of
tax accounting. If interest payments were received later than the taxable year
in which income accrued, OID treatment would have the effect of accelerating the
reporting of interest income for holders who otherwise use a cash method of tax
reporting.
Distribution of Subordinated Debentures to Holders of Capital Securities
Under certain circumstances, as described under the caption "Description of
Securities--Description of Capital Securities-- Liquidation of the Trust and
Distribution of Subordinated Debentures," Subordinated Debentures may be
distributed to holders in exchange for the Capital Securities and in liquidation
of the Trust. Under current United States federal income tax law, such a
distribution would be treated as a non-taxable event to each holder, and each
holder would have an aggregate tax basis in the Subordinated Debentures equal to
such holder's aggregate tax basis in its Capital Securities. A holder's holding
period in the Subordinated Debentures so received in liquidation of the Trust
would include the period during which the Capital Securities were held by such
holder.
Sales or Redemption of Capital Securities
A holder that sells Capital Securities (including a redemption for cash)
will recognize gain or loss equal to the difference between such holder's
adjusted tax basis in the Capital Securities and the amount
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realized on the sale of such Capital Securities (other than amounts received
with respect to accrued and unpaid interest which has not yet been included in
income, which will be treated as ordinary income). A holder's adjusted tax basis
in the Capital Securities will generally be the initial purchase price increased
by any OID previously includible in such holder's gross income to the date of
disposition and decreased by all payments received on the Capital Securities
(other than payments of qualified stated interest). Such gain or loss will
generally be a capital gain or loss and will generally be a long-term capital
gain or loss if the Capital Securities have been held for more than one year.
United States Alien Holders
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, as to the United
States, a foreign corporation, a nonresident alien individual, a foreign
partnership, or a foreign estate or trust. The discussion assumes that income
with respect to the Capital Security is not effectively connected with a trade
or business in the United States in which the United States Alien Holder is
engaged.
Under current United States federal income tax law, and subject to the
discussion of backup withholding in the following section: (1) payments with
respect to principal and interest (including OID) by the Trust or any of its
paying agents to any holder of a Capital Security that is a United States Alien
Holder will not be subject to withholding of United States federal income tax;
provided that, in the case of interest, (a) the beneficial owner of the Capital
Security does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of the Company entitled to vote,
(b) the beneficial owner of the Capital Security is not a controlled foreign
corporation that is related, directly or indirectly, to the Company through
stock ownership, and (c) either (A) the beneficial owner of the Capital Security
certifies to the Trust or its agent, under penalties of perjury, that it is a
United States Alien Holder and provides its name and address or (B) a securities
clearing organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Capital Securities in such capacity, certifies to
the Trust or its agent, under penalties of perjury, that such statement has been
received from the beneficial owner by it or by a Financial Institution between
it and the beneficial owner and furnishes the Trust or its agent with a copy
thereof; and (2) a United States Alien Holder of a Capital Security will
generally not be subject to withholding of United States federal income tax on
any gain realized upon the sale or other disposition of a Capital Security.
Backup Withholding Tax and Information Reporting
Under current United States federal income tax law, information reporting
requirements apply to interest (including OID) and principal payments made to,
and to the proceeds of sales before maturity by, certain non-corporate persons.
In addition, a 31% backup withholding tax applies if a non-corporate person (i)
fails to furnish such person's Taxpayer Identification Number ("TIN") (which,
for an individual, would be his or her Social Security Number) to the payor in
the manner required, (ii) furnishes an incorrect TIN and the payor is so
notified by the Service, (iii) is notified by the Service that such person has
failed properly to report payments of interest and dividends or (iv) in certain
circumstances, fails to certify, under penalties of perjury, that such person
has not been notified by the Service that such person is subject to backup
withholding for failure properly to report interest and dividend payments.
Backup withholding does not apply with respect to payments made to certain
exempt recipients, such as corporations and tax-exempt organizations.
In the case of a United States Alien Holder, backup withholding and
information reporting do not apply to payments with respect to principal and
interest on a Capital Security with respect to which such
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Holder has provided the required certification under penalties of perjury that
such Holder is a United States Alien Holder or has otherwise established an
exemption, provided that certain conditions are satisfied.
In general, (i) payments with respect to principal or interest on a Capital
Security collected outside the United States by a foreign office of a custodian,
nominee or other agent acting on behalf of a beneficial owner of a Capital
Security and (ii) payments on the sale, exchange or retirement of a Capital
Security to or through a foreign office of a broker are not subject to backup
withholding or information reporting. However, if such custodian, nominee, agent
or broker is a United States person, a controlled foreign corporation for United
States tax purposes, or a foreign person 50% of more of whose gross income is
effectively connected with the conduct of a United States trade or business for
a specified three-year period, such custodian, nominee, agent or broker may be
subject to certain information reporting (but not backup withholding)
requirements with respect to such payments.
Backup withholding tax is not an additional tax. Rather, any amounts
withheld from a payment to a person under the backup withholding rules are
allowed as a refund or a credit against such person's United States federal
income tax, provided that the required information is furnished to the Service.
Possible Tax Law Changes
On February 6, 1997, President Clinton's budget proposal for fiscal year
1998 was released. Included in the budget proposal is a provision which, if
enacted, would generally treat instruments such as the Subordinated Debentures
as equity for United States federal income tax purposes if the instruments (i)
have a maximum term of more than 15 years and (ii) are not shown as indebtedness
on the separate balance sheet of the issuer. The provision is proposed to be
effective generally for instruments issued on or after the date of first
committee action by Congress. As of the date hereof, no such action has been
taken. If the provision applied to the Subordinated Debentures, among other
things, the Company would be unable to deduct interest on the Subordinated
Debentures for United States federal income tax purposes. A similar provision
was included in President Clinton's budget proposal for fiscal year 1997, but
the 104th Congress adjourned without taking action on such provision. There can
be no assurance that the current budget provision or future legislative
proposals will not affect the ability of the Company to deduct interest on the
Subordinated Debentures. Such a change could give rise to a Tax Event, which may
permit the Company to redeem the Subordinated Debentures for cash. See
"Description of Securities--Description of the Capital Securities--Redemption"
and "Description of Securities--Description of Subordinated Debentures--Tax
Event Prepayment." Such a tax law change would not alter the United States
federal income tax consequences of the purchase, ownership and disposition of
Capital Securities to holders thereof.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR
SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE CAPITAL
SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER FEDERAL, STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX
LAWS.
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ERISA CONSIDERATIONS
Each of the Company (the obligor with respect to the Subordinated
Debentures held by the Trust), the Property Trustee and each of their respective
affiliates may be considered a "party in interest" (within the meaning of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) or a
"disqualified person" (within the meaning of Section 4975 of the Code) with
respect to employee benefit plans ("Plans") that are subject to ERISA or that
are described in Section 4975 of the Code. Any purchaser proposing to acquire
Capital Securities with assets of any Plan should consult with its counsel. The
purchase and/or holding of Capital Securities by a Plan that is subject to the
fiduciary responsibility provisions of ERISA or the prohibited transaction
provisions of Section 4975 of the Code (including individual retirement
arrangements and other plans described in Section 4975(e)(1) of the Code) and
with respect to which the Company, the Property Trustee or any of their
respective affiliates is a service provider (or otherwise is a party in interest
or a disqualified person) may constitute or result in a prohibited transaction
under ERISA or Section 4975 of the Code, unless such Capital Securities are
acquired pursuant to and in accordance with an applicable exemption, such as
Prohibited Transaction Class Exemption ("PTCE") 84-14 (an exemption for certain
transactions determined by an independent qualified professional asset manager),
PTCE 91-38 (an exemption for certain transactions involving bank collective
investment funds), PTCE 90-1 (an exemption for certain transactions involving
insurance company pooled separate accounts), PTCE 95-60 (an exemption for
transactions involving certain insurance company general accounts), or PTCE 96-
23 (an exemption for certain transactions determined by an in-house asset
manager). In addition, a Plan fiduciary considering the purchase of Capital
Securities should be aware that the assets of the Trust may be considered "plan
assets" for ERISA purposes. In such event, the Property Trustee and other
service providers with respect to the assets of the Trust may become parties in
interest or disqualified persons with respect to investing Plans, and any
discretionary authority exercised with respect to the Subordinated Debentures by
such persons could be deemed to constitute a prohibited transaction under ERISA
or the Code. To ensure that no prohibited transactions occur with respect to the
acquisition and holding of the Capital Securities and with respect to
transactions involving the assets of the Trust, each purchaser who acquires
Capital Securities with assets of any Plan will, by making such acquisition, be
deemed to represent and warrant that the acquisition and holding of the Capital
Securities by such purchaser does not constitute a nonexempt prohibited
transaction under ERISA or the Code. In this regard, in order to avoid
prohibited transactions, each investing Plan, by purchasing the Capital
Securities, will be deemed to have directed the Trust to invest in the
Subordinated Debentures and to have appointed the Property Trustee.
PLAN OF DISTRIBUTION
The Company and the Trust will require each broker-dealer who tenders,
pursuant to the Exchange Offer, Old Capital Securities that were acquired for
its own account as the result of market-making activities or other trading
activities to acknowledge that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of New Capital
Securities received in exchange for such Old Capital Securities pursuant to the
Exchange Offer. The Company and the Trust believe that Participating Broker-
Dealers may fulfill their prospectus delivery requirement in connection with
resales of New Capital Securities received in exchange for Old Capital
Securities that were acquired by such Participating Broker-Dealer for its own
account as a result of market-making activities or other trading activities with
this Prospectus, as it may be amended or supplemented from time to time, during
the 90-day period referred to below. ComEd has agreed that this Prospectus, as
it may be amended or supplemented from time to time, may be used by a
Participating Broker-Dealer in connection with resales of such New Capital
Securities for a period ending 90 days after the Expiration Date (subject to
extension under certain limited circumstances described
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herein) or, if earlier, when all such New Capital Securities have been disposed
of by such Participating Broker-Dealer. However, a Participating Broker-Dealer
who intends to use this Prospectus in connection with the resale of New Capital
Securities received in exchange for Old Capital Securities pursuant to the
Exchange Offer must notify ComEd or the Trust, or cause ComEd or the Trust to be
notified, on or prior to the Expiration Date, that it is a Participating Broker-
Dealer. Such notice may be given in the space provided for that purpose in the
Letter of Transmittal or may be delivered to the Exchange Agent at one of the
addresses set forth herein under "The Exchange Offer--Exchange Agent." See "The
Exchange Offer--Resales of New Capital Securities."
ComEd will not receive any cash or other proceeds from the issuance of
the New Capital Securities offered hereby. New Capital Securities received
by broker-dealers for their own accounts in connection with the Exchange
Offer may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the New Capital Securities or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or at negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such
New Capital Securities.
Any broker-dealer that resells New Capital Securities that were received by
it for its own account in connection with the Exchange Offer and any broker or
dealer that participates in a distribution of such New Capital Securities may be
deemed to be an "underwriter" within the meaning of the Securities Act, and any
profit on any such resale of New Capital Securities and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the New Capital
Securities have been passed upon by Richards, Layton & Finger, P.A., Wilmington,
Delaware, special Delaware counsel to the Trust. The validity of the New
Guarantee and the New Subordinated Debentures have been passed upon for ComEd by
Sidley & Austin, Chicago, Illinois. Certain matters relating to United States
federal income tax considerations have been passed upon for ComEd by Sidley &
Austin, Chicago, Illinois.
EXPERTS
The financial statements and schedules included or incorporated by
reference in the 1996 Form 10-K Report, the January 31, 1997 Form 8-K Report and
the March 31, 1997 Form 10-Q Report have been audited by Arthur Andersen LLP,
independent certified public accountants, as indicated in their reports with
respect thereto, and are incorporated herein in reliance upon the authority of
said firm as experts in accounting and auditing in giving said reports.
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================================================================================
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus in connection with the offer made
by this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by ComEd or the Trust.
Neither the delivery of this Prospectus nor any sale made hereunder shall under
any circumstance create an implication that there has been no change in the
affairs of ComEd or the Trust since the date hereof. This Prospectus does not
constitute an offer or solicitation by anyone in any jurisdiction in which such
offer or solicitation is not authorized or in which the person making such offer
or solicitation is not qualified to do so or to anyone to whom it is unlawful to
make such offer or solicitation.
---------------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
Available Information............................................................................ 7-8
Incorporation of Certain Documents by
Reference...................................................................................... 8
Summary.......................................................................................... 9-16
Risk Factors..................................................................................... 17-22
Use of Proceeds from the Sale of Old Capital Securities.......................................... 22
Summary Information.............................................................................. 23-26
Capitalization................................................................................... 27
Accounting Treatment for the Trust............................................................... 28
ComEd Financing II............................................................................... 28
The Exchange Offer............................................................................... 29-39
Description of Securities........................................................................ 39
Description of Capital Securities.............................................................. 39-50
Description of Subordinated Debentures......................................................... 50-60
Description of Guarantee....................................................................... 60-62
Description of Old Securities.................................................................... 62
Relationship Among the Capital Securities, the Subordinated Debentures and the Guarantee......... 62-64
Certain Federal Income Tax Consequences.......................................................... 64-67
ERISA Considerations............................................................................. 68
Plan of Distribution............................................................................. 68-69
Validity of Securities........................................................................... 69
Experts.......................................................................................... 69
</TABLE>
Until __________, 1997, all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a Prospectus. This is in addition to the obligations of dealers to
deliver a Prospectus when acting as underwriters and with respect to their
unsold allotment or subscriptions.
================================================================================
================================================================================
ComEd Financing II
Offer to Exchange its
8.50% Capital Securities which
have been registered under the
Securities Act of 1933 for any
and all of its outstanding 8.50%
Capital Securities
(Liquidation Amount $1,000
Per Capital Security)
Fully and Unconditionally
Guaranteed, as described herein, by
Commonwealth Edison Company
--------------------
PROSPECTUS
--------------------
_____________, 1997
===============================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Certain provisions of the Illinois Business Corporation Act of 1983
(the "BCA") provide that ComEd may, and in some circumstances must, indemnify
the directors and officers of ComEd and of each subsidiary company against
liabilities and expenses incurred by any such person by reason of the fact that
such person was serving in such capacity, subject to certain limitations and
conditions set forth in the statute. ComEd's By-laws provide that ComEd will
indemnify its directors and officers, and any person serving as a director or
officer of another business entity at ComEd's request, to the extent permitted
by the statute. In addition, ComEd's Restated Articles of Incorporation provide,
as permitted by the BCA, that directors shall not be personally liable for
monetary damages for breach of fiduciary duty as a director, except (i) for
breaches of their duty of loyalty to ComEd or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 8.65 of the BCA, and (iv) for transactions
from which a director derived an improper personal benefit.
ComEd has purchased liability insurance policies which indemnify
ComEd's directors and officers, the directors and officers of subsidiaries of
ComEd, the trustees of the Service Annuity Funds, and officers of ComEd serving
as directors and officers on behalf of ComEd with certain other entities,
against loss arising from claims by reason of their legal liability for acts as
such directors, officers or trustees, subject to certain limitations and
conditions set forth in the policies.
ComEd indemnifies assistant officers and certain other employees
against liabilities and expenses incurred by reason of acts performed in
connection with the operations of the various employee benefit systems of ComEd
and its subsidiaries.
The Declaration of Trust provides that no Regular Trustee, affiliate
of any Regular Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives, or agents of any Regular Trustee, or any
employee or agent of the Trust or its affiliates (each an "Indemnified Person")
shall be liable, responsible or accountable in damages or otherwise to the Trust
or any employee or agent of the trust or its affiliates for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by the Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such act or omission. The Declaration of Trust also
provides that, to the fullest extent permitted by applicable law, ComEd shall
indemnify and hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by such
Declaration, except that no Indemnified Personal shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of gross negligence or willful misconduct with respect to such
act or omission. The Declaration of Trust further provides that, to the fullest
extent permitted by applicable law, expenses (including legal fees) incurred by
an Indemnified Person in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by ComEd prior to the final disposition of
such claim, demand, action, suit or proceeding upon receipt by ComEd of an
undertaking by or on behalf of the
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Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified for the underlying cause of
action as authorized by such Declaration.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT
- -------
4.1 Indenture dated as of September 1, 1995 between Commonwealth Edison
Company and Wilmington Trust Company, as trustee (File No. 333-61343,
Form S-3 Registration Statement, Exhibit (4)-3), which is incorporated
herein by reference
4.2 First Supplemental Indenture dated as of September 25, 1995 between
Commonwealth Edison Company and Wilmington Trust Company, as trustee
(File No. 333-61343, Form S-3 Registration Statement, Exhibit (4)-4),
which is incorporated herein by reference
4.3 Second Supplemental Indenture dated as of January 24, 1997 between
Commonwealth Edison Company and Wilmington Trust Company, as trustee
4.4 Form of Third Supplemental Indenture to be entered into between
Commonwealth Edison Company and Wilmington Trust Company, as trustee,
relating to the Series B Subordinated Debentures
4.5 Certificate of Trust of ComEd Financing II dated as of November 19, 1996
4.6 Declaration of Trust of ComEd Financing II dated as of November 19, 1996
among Commonwealth Edison Company, as Sponsor, and the trustees named
therein
4.7 Amended and Restated Declaration of Trust of ComEd Financing II dated as
of January 24, 1997 among Commonwealth Edison Company, as Sponsor or,
Wilmington Trust Company, as Property Trustee and as Delaware Trustee,
the Administrative Trustees named therein and the holders, from time to
time, of the Capital Securities
4.8 Forms of Capital Security Certificates for ComEd Financing II (included
as Exhibits B, C and D to Exhibit 4.7)
4.9 Form of Subordinated Debenture for Commonwealth Edison Company (included
as Exhibit A to Exhibit 4.2)
4.10 Series A Capital Securities Guarantee Agreement dated as of January 24,
1997 between Commonwealth Edison Company and Wilmington Trust Company,
as guarantee trustee
4.11 Form of Series B Capital Securities Guarantee Agreement to be executed
by Commonwealth Edison Company and Wilmington Trust Company, as
guarantee trustee
4.12 Registration Rights Agreement dated as of January 24, 1997 among Merrill
Lynch, Pierce, Fenner & Smith Incorporated, PaineWebber Incorporated and
Salomon Brothers Inc, as Initial Purchasers, and Commonwealth Edison
Company and ComEd Financing II
5.1 Opinion of Sidley & Austin as to validity of the Subordinated Debentures
and the Guarantee to be issued by Commonwealth Edison Company
5.2 Opinion of Richards, Layton & Finger as to validity of the Capital
Securities to be issued by ComEd Financing II
8 Opinion of Sidley & Austin as to certain federal income tax matters
12 Computation of ratios of earnings to fixed charges
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Sidley & Austin (included in Exhibits 5.1 and 8)
23.3 Consent of Richards, Layton & Finger (included in Exhibit 5.2)
24 Powers of Attorney
25.1 Form T-1 Statement of Eligibility of Wilmington Trust Company to act as
trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of Wilmington Trust Company to act as
trustee under the Amended and Restated Declaration of Trust of ComEd
Financing II
25.3 Form T-1 Statement of Eligibility of Wilmington Trust Company under the
Guarantee for the benefit of the holders of Capital Securities of ComEd
Financing II
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
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99.3 Form of Letter from Registered Holders to Clients
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees
99.5 Form of Exchange Agent Agreement
ITEM 22. UNDERTAKINGS
Each Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the Registration Statement is on Form S-3, Form S-8 or
Form F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by ComEd
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
Each of the undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of each
Registrant pursuant to the foregoing provisions, or otherwise, each Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by each Registrant of expenses incurred
or paid by a director, officer or controlling person of each Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, each Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the Registration Statement through the date
of responding to the request.
The undersigned Registrants hereby undertake to supply by means of a post-
effective amendment all information concerning a transaction, and ComEd being
acquired or involved therein, that was not the subject of and included in the
Registration Statement when it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Commonwealth Edison Company has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Chicago, and State of Illinois, on this 3rd day of June, 1997.
COMMONWEALTH EDISON COMPANY
By James J. O'Connor
------------------------------------
James J. O'Connor, Chairman and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on this 3rd day of June, 1997.
Signature Title
--------- -----
James J. O'Connor Chairman and Chief Executive
------------------------------- Officer and Director
James J. O'Connor (principal executive officer)
John C. Bukovski Vice President
------------------------------- (principal financial officer)
John C. Bukovski
Roger F. Kovack Comptroller
------------------------------- (principal accounting officer)
Roger F. Kovack
Edward A. Brennan* Director
James W. Compton* Director
Bruce DeMars* Director
Sue L. Gin* Director
Donald P. Jacobs Director
Edgar D. Jannotta Director
George E. Johnson* Director
Leo F. Mullin* Vice Chairman and Director
Samuel K. Skinner* President and Director
*By: David A. Scholz
----------------------------------------
David A. Scholz, Attorney-in-fact
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, ComEd
Financing II has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Chicago, State of Illinois, on the 3rd day of June, 1997.
COMED FINANCING II
By: John C. Bukovski
-------------------------
John C. Bukovski
Trustee
By: Dennis F. O'Brien
-------------------------
Dennis F. O'Brien
Trustee
II-6
<PAGE>
EXHIBIT INDEX
EXHIBIT
- -------
4.1 Indenture dated as of September 1, 1995 between Commonwealth Edison
Company and Wilmington Trust Company, as trustee (File No. 333-61343,
Form S-3 Registration Statement, Exhibit (4)-3), which is incorporated
herein by reference
4.2 First Supplemental Indenture dated as of September 25, 1995 between
Commonwealth Edison Company and Wilmington Trust Company, as trustee
(File No. 333-61343, Form S-3 Registration Statement, Exhibit (4)-4),
which is incorporated herein by reference
4.3 Second Supplemental Indenture dated as of January 24, 1997 between
Commonwealth Edison Company and Wilmington Trust Company, as trustee
4.4 Form of Third Supplemental Indenture to be entered into between
Commonwealth Edison Company and Wilmington Trust Company, as trustee,
relating to the Series B Subordinated Debentures
4.5 Certificate of Trust of ComEd Financing II dated as of November 19, 1996
4.6 Declaration of Trust of ComEd Financing II dated as of November 19, 1996
among Commonwealth Edison Company, as Sponsor, and the trustees named
therein
4.7 Amended and Restated Declaration of Trust of ComEd Financing II dated
as of January 24, 1997 among Commonwealth Edison Company, as Sponsor
or, Wilmington Trust Company, as Property Trustee and as Delaware
Trustee, the Administrative Trustees named therein and the holders,
from time to time, of the Capital Securities
4.8 Forms of Capital Security Certificates for ComEd Financing II
(included as Exhibits B, C and D to Exhibit 4.7)
4.9 Form of Subordinated Debenture for Commonwealth Edison Company
(included as Exhibit A to Exhibit 4.2)
4.10 Series A Capital Securities Guarantee Agreement dated as of January
24, 1997 between Commonwealth Edison Company and Wilmington Trust
Company, as guarantee trustee
4.11 Form of Series B Capital Securities Guarantee Agreement to be executed
by Commonwealth Edison Company and Wilmington Trust Company, as
guarantee trustee
4.12 Registration Rights Agreement dated as of January 24, 1997 among
Merrill Lynch, Pierce, Fenner & Smith Incorporated, PaineWebber
Incorporated and Salomon Brothers Inc, as Initial Purchasers, and
Commonwealth Edison Company and ComEd Financing II
5.1 Opinion of Sidley & Austin as to validity of the Subordinated
Debentures and the Guarantee to be issued by Commonwealth Edison
Company
5.2 Opinion of Richards, Layton & Finger as to validity of the Capital
Securities to be issued by ComEd Financing II
8 Opinion of Sidley & Austin as to certain federal income tax matters
12 Computation of ratios of earnings to fixed charges
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Sidley & Austin (included in Exhibits 5.1 and 8)
23.3 Consent of Richards, Layton & Finger (included in Exhibit 5.2)
24 Powers of Attorney
25.1 Form T-1 Statement of Eligibility of Wilmington Trust Company to act
as trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of Wilmington Trust Company to act
as trustee under the Amended and Restated Declaration of Trust of
ComEd Financing II
25.3 Form T-1 Statement of Eligibility of Wilmington Trust Company under
the Guarantee for the benefit of the holders of Capital Securities of
ComEd Financing II
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Letter from Registered Holders to Clients
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees
99.5 Form of Exchange Agent Agreement
<PAGE>
Exhibit (4)-3
Commonwealth Edison Company
Form S-4 File No. 333-
SECOND SUPPLEMENTAL INDENTURE
Dated as of January 24, 1997
Between
COMMONWEALTH EDISON COMPANY
and
WILMINGTON TRUST COMPANY
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I DEFINITIONS.............................................. 2
Section 1.1. Definition of Terms............................. 2
Section 1.2. Interpretation.................................. 4
ARTICLE II GENERAL TERMS AND CONDITIONS OF THE DEBENTURES.......... 5
Section 2.1. Designation and Principal Amount................ 5
Section 2.2. Maturity........................................ 5
Section 2.3. Form and Payment................................ 5
Section 2.4. Global Debenture................................ 5
Section 2.5. Interest........................................ 6
ARTICLE III REDEMPTION OF THE DEBENTURES........................... 6
Section 3.1. Tax Event Redemption............................ 6
Section 3.2. Optional Redemption by Company.................. 7
Section 3.3. No Sinking Fund................................. 8
ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD.................... 8
Section 4.1. Extension of Interest Payment Period............ 8
Section 4.2. Notice of Extension............................. 8
ARTICLE V EXPENSES 9
Section 5.1. Payment of Expenses............................. 9
ARTICLE VI SUBORDINATION........................................... 9
Section 6.1. Agreement to Subordinate........................ 9
Section 6.2. Default on Senior Indebtedness.................. 10
Section 6.3. Liquidation; Dissolution; Bankruptcy............ 10
Section 6.4. Subrogation..................................... 11
Section 6.5. Trustee to Effectuate Subordination............. 12
Section 6.6. Notice by the Company........................... 12
Section 6.7. Rights of the Trustee; Holders of Senior........
Indebtedness.................................... 13
Section 6.8. Subordination May Not Be Impaired............... 13
ARTICLE VII FORM OF DEBENTURE...................................... 14
Section 7.1. Form of Debenture............................... 14
ARTICLE VIII ORIGINAL ISSUE OF DEBENTURES; EXCHANGE................ 20
Section 8.1. Original Issue of Debentures.................... 20
Section 8.2 Exchange of Debentures for Series B Debentures... 21
ARTICLE IX MISCELLANEOUS........................................... 21
Section 9.1. Ratification of Indenture....................... 21
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Section 9.2. Trustee Not Responsible for Recitals........... 22
Section 9.3. Governing Law.................................. 22
Section 9.4. Separability................................... 22
Section 9.5. Counterparts................................... 22
</TABLE>
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<PAGE>
THIS SECOND SUPPLEMENTAL INDENTURE, dated as of January 24, 1997 (the
"Second Supplemental Indenture"), between Commonwealth Edison Company, an
Illinois corporation (the "Company"), and Wilmington Trust Company, not in its
individual capacity but solely as trustee (the "Trustee") under the Indenture
dated as of September 1, 1995 between the Company and the Trustee (the
"Indenture") as supplemented by the First Supplemental Indenture dated as of
September 19, 1995 between the Company and the Trustee (the "First
Supplemental Indenture").
W I T N E S S E T H:
WHEREAS, the Company executed and delivered the Indenture to the Trustee to
provide, among other things, for the future issuance of the Company's unsecured
subordinated debt securities, to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered
as provided in the Indenture; and
WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its debt securities to be known
as its 8.50% Subordinated Deferrable Interest Debentures due January 15, 2027
(the "Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the Indenture
and this Second Supplemental Indenture; and
WHEREAS, ComEd Financing II, a Delaware statutory business trust (the
"Trust"), has offered to the public $150,000,000 aggregate liquidation amount of
its 8.50 % Series A Capital Securities (Liquidation Amount $1,000 per Capital
Security) (the "Capital Securities") and has offered to the Company $4,640,000
aggregate stated liquidation amount of its 8.50% Common Securities (Liquidation
Amount $1,000 per Common Security) (the "Common Securities"), such Capital
Securities and Common Securities representing undivided beneficial interests in
the assets of the Trust, and proposes to invest the proceeds from such offering
in $154,640,000 aggregate principal amount of the Debentures; and
WHEREAS, the Company has requested the Trustee to execute and deliver this
Second Supplemental Indenture, and all requirements necessary to make this
Second Supplemental Indenture a valid instrument, in accordance with its terms,
and to make the Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company, have been
performed, and the execution and delivery of this Second Supplemental Indenture
has been duly authorized in all respects;
NOW, THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the holders thereof, and for the purpose of setting forth, as
provided in the Indenture,
<PAGE>
the form and substance of the Debentures and the terms, provisions and
conditions thereof, the Company covenants and agrees with the Trustee as
follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definition of Terms. Unless the context otherwise
requires, (a) a term defined in the Indenture has the same meaning when used in
this Second Supplemental Indenture, (b) a term defined anywhere in this Second
Supplemental Indenture has the same meaning throughout and (c) the following
terms have the meanings given to them in the Declaration: (i) Administrative
Trustee; (ii) Capital Security Certificate; (iii) Clearing Agency; (iv) Delaware
Trustee; (v) Exchange Offer; (vi) No Recognition Opinion; (vii) Property
Trustee; (viii) Pro Rata; (ix) Series B Debentures; (x) Sponsor; and (xi) Tax
Event.
In addition, the following terms have the following respective
meanings:
"Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to (i) the yield, under the heading which
represents the average for the immediately prior week, appearing in the
most recently published statistical release designated "H.15 (519)" or any
successor publication which is published weekly by the Federal Reserve
Board and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the
Initial Optional Prepayment Date (if no maturity is within three months
before or after the Initial Optional Prepayment Date, yields for the two
published maturities most closely corresponding to the Initial Optional
Prepayment Date shall be determined and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or
does not contain such yields, the rate per annum equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such
redemption date, in each case calculated on the third Business Day
preceding the redemption date, plus in each case (a) 1.25 % if such
redemption date occurs on or prior to January 15, 1998, and (b) 0.50% in
all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity date corresponding
to the Initial Optional Prepayment Date that would be utilized, at the time
of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities with a maturity date
corresponding to the Initial Optional Prepayment Date. If no United States
Treasury security has a maturity date which is within three months before
or after the Initial Optional Prepayment Date, the two most closely
corresponding United States Treasury securities shall be used as the
Comparable Treasure Issue, and the calculation of the Adjusted
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<PAGE>
Treasury Rate pursuant to clause (ii) of the definition thereof shall be
interpolated or extrapolated on a straight line basis, rounding to the
nearest month.
"Comparable Treasury Price" means, with respect any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on
the third Business Day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day, (a) the average of three Reference Treasury Dealer Quotations
for such redemption date, after excluding the highest and lowest of such
Reference Treasury Dealer Quotations, or (b) if the Trustee obtains fewer
than three such Reference Treasury Dealer Quotations, the average of all
such quotations.
"Declaration" means the Amended and Restated Declaration of Trust of
ComEd Financing II, a Delaware statutory business trust, dated as of
January 24, 1997.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Tax Event, the Trust is to be dissolved in accordance
with the Declaration and the Debentures held by the Property Trustee are to
be distributed to the holders of the Trust Securities issued by the Trust
Pro Rata in accordance with the Declaration.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Initial Optional Prepayment Date" means January 15, 2007.
"Guarantees" means the guarantees by the Company of the payment of
distributions of moneys held by the Trust and payments on liquidation of
the Trust.
"Initial Purchasers" means the entities so identified in the Purchase
Agreement.
"Maturity Date" means the date on which the Debentures mature and on
which the principal shall be due and payable together with all accrued and
unpaid interest thereon including Compounded Interest and Additional
Interest, if any.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Trustee after consultation with the Company.
"Reference Treasury Dealer" means: (i) Merrill Lynch Government
Securities, Inc. and its successors; provided, however, that if the
foregoing shall cease to be a primary U.S. Government securities dealer in
New York City (a "Primary Treasury Dealer"), the
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<PAGE>
Company shall substitute therefor another Primary Treasury Dealer; and (ii)
any other Primary Treasury Dealer selected by the Trustee after
consultation with the Company.
"Reference Treasury Dealer Quotation" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer
at 5:00 p.m., New York City time, on the third Business Day preceding such
redemption date.
"Senior Indebtedness" means (i) any payment in respect of (A)
indebtedness of the Company for money borrowed and (B) indebtedness
evidenced by securities, debentures, bonds, notes or other similar
instruments issued by the Company including, without limitation,
indebtedness evidenced by securities issued pursuant to the provisions of
the Mortgage dated July 1, 1923, as supplemented by Supplemental Indenture
dated August 1, 1944 and subsequent supplemental indentures, between the
Company, as mortgagor, and Harris Trust and Savings Bank and D.G. Donovan,
as trustees; the Indenture dated as of September 1, 1987, as supplemented
and amended, between the Company and Citibank, N.A., as trustee; the
Indentures dated April 1, 1949, October 1, 1949, October 1, 1950, October
1, 1954, January 1, 1958, January 1, 1959 and December 1, 1961, between the
Company and Amalgamated Bank, as successor trustee to The First National
Bank of Chicago; and the Indenture dated February 15, 1973, as
supplemented, between the Company and LaSalle National Bank, as successor
trustee to The First National Bank of Chicago; (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 such obligor under any
title retention agreement (but excluding trade ac counts payable arising
in the ordinary course of business); (iv) all obligations of the Company
for reimbursement on any letter of credit, banker's acceptance, security
purchase facility or similar credit transaction; (v) all obligations of the
type referred to in clauses (i) through (iv) of other persons for the
payment of which 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 such
obligor), except for (1) any such indebtedness that is by its terms
subordinated to or pari passu with the Debentures, as the case may be,
including all other debt securities and guarantees in respect of those debt
securities, issued to any other trusts, partnerships or any other entity
affiliated with the Company which is a financing vehicle of the Company
("Financing Entity") in connection with an issuance of preferred securities
by such Financing Entity or other securities which rank pari passu with, or
junior to, the Capital Securities, and (2) any indebtedness between or
among the Company and its Affiliates.
Section 1.2. Interpretation. Each definition in this Second
Supplemental Indenture includes the singular and the plural, and references to
the neuter gender include the masculine and feminine where appropriate. Terms
which relate to accounting matters shall be interpreted in
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<PAGE>
accordance with generally accepted accounting principles in effect from time to
time. References to any statute mean such statute as amended at the time and
include any successor legislation. The word "or" is not exclusive, and the
words "herein," "hereof" and "hereunder" refer to this Second Supplemental
Indenture as a whole. The headings to the Articles and Sections are for
convenience of reference and shall not affect the meaning or interpretation of
this Second Supplemental Indenture. References to Articles and Sections mean
the Articles and Sections of this Second Supplemental Indenture.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF
THE DEBENTURES
Section 2.1. Designation and Principal Amount. There is hereby
authorized a series of Debt Securities designated the "8.50 % Series A
Subordinated Deferrable Interest Debentures due January 15, 2027," limited in
aggregate principal amount to $154,640,000, which amount shall be as set forth
in any written order of the Company for the authentication and delivery of
Debentures pursuant to Section 2.04 of the Indenture.
Section 2.2. Maturity. The Maturity Date will be January 15, 2027.
Section 2.3. Form and Payment. Except as provided in Section 2.4,
the Debentures shall be issued in fully registered certificated form without
interest coupons. Principal and interest on the Debentures issued in
certificated form will be payable, the transfer of such Debentures will be
registrable and such Debentures will be exchangeable for Debentures bearing
identical terms and provisions at the office or agency of the Trustee in
Wilmington, Delaware, 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 Security Register. Notwithstanding the
foregoing, so long as the registered holder of any Debentures is the Property
Trustee, the payment of the principal of, premium (if any) and interest
(including Compounded Interest and Additional Interest, if any) on such
Debentures held by the Property Trustee will be made at such place and to such
account as may be designated by the Property Trustee.
Section 2.4. Global Debenture. In the event that the Sponsor gives
notice of its election to liquidate the Trust pursuant to Section 8.1(a)(iii) of
the Declaration:
(a) the Debentures in certificated form may be presented to the
Trustee by the Property Trustee in exchange for a Global Security in an
aggregate principal amount equal to the aggregate principal amount of the
Debentures so presented, to be registered in the name of the Depositary, or
its nominee, and delivered by the Trustee to the Depositary for crediting
to the accounts of its participants pursuant to the instructions of the
Administrative Trustees. The Company, upon any such presentation, shall
execute a Global Security in such aggregate principal amount and deliver
the same to the Trustee for authentication and
-5-
<PAGE>
delivery in accordance with the Indenture and this Second Supplemental
Indenture; and any payments on the Debentures issued as a Global Security
will be made to the Depositary; and
(b) if any Capital Securities are held in non book-entry certificated
form, the Debentures in certificated form may be presented to the Trustee
by the Property Trustee and any Capital Security Certificate which
represents Capital Securities other than Capital Securities held by the
Clearing Agency or its nominee ("Non Book-Entry Capital Securities") will
be deemed to represent beneficial interests in Debentures presented to the
Trustee by the Property Trustee having an aggregate principal amount equal
to the aggregate stated liquidation amount of the Non Book-Entry Capital
Securities until such Capital Security Certificates are presented to the
Security Registrar for transfer or reissuance at which time such Capital
Security Certificates will be canceled and a Debenture, registered in the
name of the holder of such Capital Security Certificate or the transferee
of the holder of such Capital Security Certificate, as the case may be,
with an aggregate principal amount equal to the aggregate stated
liquidation amount of the Capital Security Certificate canceled, will be
executed by the Company and delivered to the Trustee for authentication and
delivery in accordance with the Indenture and this Second Supplemental
Indenture. On issue of such Debentures, Debentures with an equivalent
aggregate principal amount that were presented by the Property Trustee to
the Trustee will be deemed to have been cancelled.
Section 2.5. Interest. (a) Each Debenture will bear interest at the
rate of 8.50% per annum (the "Coupon Rate") from the original date of issuance
until the principal thereof becomes due and payable, and on any overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the Coupon Rate,
compounded semi-annually, payable (subject to the provisions of Article IV)
semi-annually in arrears on July 15 and January 15 of each year (each, an
"Interest Payment Date"), commencing on July 15, 1997, to the Person in whose
name such Debenture or any predecessor Debenture is registered, at the close of
business on the first day of July and January, respectively.
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year consisting of twelve 30-day months. In the event
that any date on which interest is payable on the 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). The amount of interest payable for any
period shorter than a full calendar month for which interest is computed, will
be computed on the basis of the actual number of days elapsed in such month.
(c) If at any time while the Property Trustee is the holder of any
Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any case, the Company will pay as additional interest ("Additional
Interest") on the Debentures held by the Property Trustee, such additional
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee after paying such taxes, duties, assessments
or other governmental charges will be equal to the amounts
-6-
<PAGE>
the Trust and the Property Trustee would have received had no such taxes,
duties, assessments or other government charges been imposed.
ARTICLE III
REDEMPTION OF THE DEBENTURES
Section 3.1. Tax Event Redemption. If a Tax Event has occurred and
is continuing, then, notwithstanding Section 3.2, the Company shall have the
right, upon not less than 30 days' nor more than 60 days' notice to the
registered holders of the Debentures, to redeem the Debentures, in whole (but
not in part), for cash at any time prior to January 15, 2007 and within 90 days
of the occurrence of such Tax Event (the "90 Day Period") at a redemption price
(the "Tax Event Redemption Price") equal to the greater for (i) 100% of the
principal amount of such Debentures or (ii) the sum, as determined by a
Quotation Agent, of the present values of the principal amount and premium
payable as part of the redemption price with respect to an optional redemption
of such Debentures on January 15, 2007, together with scheduled payments of
interest on the Debentures accruing from the redemption date to and including
January 15, 2007, in each case discounted to the redemption date on a semi-
annual basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate, plus, in each case, accrued interest thereon to the date
of such redemption. The Tax Event Redemption Price shall be paid prior to 12:00
noon, New York time, on the date of such redemption or at such earlier time as
the Company determines and specifies in the notice of redemption, provided the
Company shall deposit with the Trustee an amount sufficient to pay the Tax Event
Redemption Price by 11:00 a.m. on the date such Tax Event Redemption Price is to
be paid.
Section 3.2. Optional Redemption by Company. Subject to the
provisions of Article III of the Indenture, except as otherwise specified in
this Second Supplemental Indenture, the Company shall have the right to redeem
the Debentures, in whole or in part, from time to time, on or after January 15,
2007, at a redemption price (the "Optional Redemption Price") equal to the
percentage of the principal amount of the Debentures specified below, plus, in
each case, accrued and unpaid interest thereon to the date of such redemption if
redeemed during the 12-month period beginning January 15 of the years indicated
below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2007 104.250%
2008 103.825
2009 103.400
2010 102.975
2011 102.550
2012 102.125
2013 101.700
2014 101.275
2015 101.850
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
2016 100.425
2017 and thereafter 100.000
</TABLE>
Any redemption pursuant to this Section 3.2 will be made upon not less than 30
days' nor more than 60 days' notice to the registered holder of the Debentures,
at the Optional Redemption Price. If the Debentures are only partially redeemed
pursuant to this Section 3.2, the Debentures will be redeemed pro rata or by lot
or by any other method utilized by the Trustee; provided, that if at the time of
redemption, the Debentures are registered as a Global Security, the Depositary
shall determine by lot the principal amount of such Debentures held by each
Debenture holder to be redeemed. The Optional Redemption Price shall be paid
prior to 12:00 noon, New York time, on the date of such redemption or at such
earlier time as the Company determines and specifies in the notice of
redemption, provided the Company shall deposit with the Trustee an amount
sufficient to pay the Optional Redemption Price by 11:00 a.m. on the date such
Optional Redemption Price is to be paid.
Section 3.3. No Sinking Fund. The Debentures are not entitled to
the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.1. Extension of Interest Payment Period. So long as no
Event of Default has occurred and is continuing, the Company shall have the
right, at any time and from time to time during the term of the Debentures, to
extend the interest payment period of such Debentures for up to ten (10)
consecutive semi-annual periods (the "Extended Interest Payment Period"). To
the extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
this Section 4.1, will bear interest compounded semi-annually at the Coupon Rate
for each semi-annual period of the Extended Interest Payment Period ("Compounded
Interest"). At the end of the Extended Interest Payment Period, the Company
shall pay all interest accrued and unpaid on the Debentures, including any
Compounded Interest and Additional Interest ("Deferred Interest") which shall be
payable to the holders of the Debentures in whose names the Debentures are
registered in the Security Register on the record date immediately preceding the
end of the Extended Interest Payment Period. Before the termination of any
Extended Interest Payment Period, the Company may further extend such period,
provided that such period together with all such further extensions thereof
shall not exceed ten (10) consecutive semi-annual periods or extend beyond the
Maturity Date of the Debentures. Upon the termination of any Extended Interest
Payment Period and upon the payment of all Deferred Interest then due, the
Company may select a new Extended Interest Payment Period, subject to the
foregoing requirements. No interest shall be due and payable during an Extended
Interest Payment Period, except at the end thereof, but the Company may pay at
any time all or any portion of the interest accrued during an Extended Interest
Payment Period.
-8-
<PAGE>
Section 4.2. Notice of Extension. (a) If the Property Trustee is
the only registered holder of the Debentures at the time the Company selects an
Extended Interest Payment Period, the Company shall give written notice to the
Administrative Trustees, the Property Trustee and the Trustee of its selection
of such Extended Interest Payment Period on the earlier of (i) ten days prior to
the next succeeding date on which Distributions on the Trust Securities issued
by the Trust are payable, or (ii) the date the Trust or the Administrative
Trustees are required to give notice of the record or payment date for such
Distributions to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Capital Securities issued by the Trust, but in
any event at least ten days before such record date.
(b) If the Property Trustee is not the only holder of the Debentures
at the time the Company selects an Extended Interest Payment Period, the Company
shall give the holders of the Debentures and the Trustee written notice of its
selection of such Extended Interest Payment Period ten days before the earlier
of (i) the next succeeding Interest Payment Date, or (ii) the date the Company
is required to give notice of the record or payment date of such interest
payment to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Debentures, but in any event at least ten days
before such record date.
(c) The period in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 4.2 shall be counted as one of the 10 semi-annual
periods permitted in the maximum Ex tended Interest Payment Period permitted
under Section 4.1.
ARTICLE V
EXPENSES
Section 5.1. Payment of Expenses. In connection with the offering,
sale and issuance of the Debentures to the Property Trustee in connection with
the sale of the Trust Securities by the Trust, the Company shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including compensation to the Initial
Purchasers payable pursuant to the Purchase Agreement and compensation of
the Trustee under the Indenture in accordance with the provisions of
Section 7.06 of the Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust,
the offering, sale and issuance of the Trust Securities (including
compensation to the Initial Purchasers in connection therewith), the fees
and expenses of the Property Trustee and the Delaware Trustee, the costs
and expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs
-9-
<PAGE>
and expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets); and
(c) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
ARTICLE VI
SUBORDINATION
Section 6.1. Agreement to Subordinate. The Company covenants and
agrees, and each holder of Debentures issued hereunder by such holder's
acceptance thereof likewise covenants and agrees, that all Debentures shall be
issued subject to the provisions of this Article VI; and each holder of a
Debenture, whether upon original issue or upon transfer or assignment thereof,
accepts and agrees to be bound by such provisions.
The payment by the Company of the principal of, premium, if any, and
interest on all Debentures issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and subject in right of payment to
the prior payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Second Supplemental Indenture or thereafter
incurred.
No provision of this Article VI shall prevent the occurrence of any
default or Event of Default hereunder.
Section 6.2. Default on Senior Indebtedness. In the event and during
the continuation of any default by the Company in the payment of principal,
premium, interest or any other payment due on any Senior Indebtedness of the
Company, or in the event that the maturity of any Senior Indebtedness of the
Company has been accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the principal (including
redemption payments, if any) of premium, if any, or interest on the Debentures.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any holder when such payment is prohibited by the
preceding paragraph of this Section 6.2, such payment shall be held in trust for
the benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee within 90 days of such payment
of the amounts then due and owing on the Senior Indebtedness and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
Senior Indebtedness.
-10-
<PAGE>
Section 6.3. Liquidation; Dissolution; Bankruptcy. Upon any payment
by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution or winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due upon all Senior Indebtedness of the Company
shall first be paid in full, or payment thereof provided for in money in
accordance with its terms, before any payment is made by the Company on account
of the principal (and premium, if any) or interest on the Debentures; and upon
any such dissolution or winding-up or liquidation or reorganization, any payment
by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the holders of the
Debentures or the Trustee would be entitled to receive from the Company, except
for the provisions of this Article VI, shall be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the holders of the Debentures or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness in
full, in money or money's worth, after giving effect to any concurrent payment
or distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the holders of Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the holders of the Debentures before all Senior Indebtedness of the
Company is paid in full, or provision is made for such payment in money in
accordance with its terms, such payment or distribution shall be held in trust
for the benefit of and shall be paid over or delivered to the holders of such
Senior Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness of the Company remaining unpaid to the extent
necessary to pay such Senior Indebtedness in full in money in accordance with
its terms, after giving effect to any concurrent payment or distribution to or
for the benefit of the holders of such Senior Indebtedness.
For purposes of this Article VI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article VI with respect
to the Debentures to the payment of all Senior Indebtedness of the Company that
may at the time be outstanding, provided that (i) such Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such reorganization
or readjustment, and (ii) the rights of the holders of such Senior Indebtedness
are not, without the consent of such holders, altered by such reorganization or
-11-
<PAGE>
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article X of the Indenture shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 6.3 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article X
of the Indenture. Nothing in Section 6.2 or in this Section 6.3 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.06 of the
Indenture.
Section 6.4. Subrogation. Subject to the payment in full of all
Senior Indebtedness of the Company, the rights of the holders of the Debentures
shall be subrogated to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of cash, property or securities of the Company
applicable to such Senior Indebtedness until the principal of (and premium, if
any) and interest on the Debentures shall be paid in full; and, for the purposes
of such subrogation, no payments or distributions to the holders for such Senior
Indebtedness of any cash, property or securities to which the holders of the
Debentures or the Trustee would be entitled except for the provisions of this
Article VI, and no payment over pursuant to the provisions of this Article VI,
to or for the benefit of the holders of such Senior Indebtedness by holders of
the Debentures or the Trustee, shall, as between the Company, its creditors
other than holders of Senior Indebtedness of the Company, and the holders of the
Debentures be deemed to be a payment by the Company to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article VI
are and are intended solely for the purposes of defining the relative rights of
the holders of the Debentures, on the one hand, and the holders of such Senior
Indebtedness on the other hand.
Nothing contained in this Article VI or elsewhere in this Indenture or
in the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness of the Company, and the
holders of the Debentures, the obligation of the Company which is absolute and
unconditional, to pay to the holders of the Debentures the principal of (and
premium, if any) 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 the holders of the Debentures and creditors
of the Company, other than the holders of Senior Indebtedness of the Company,
nor shall anything herein or therein prevent the Trustee or the holder of any
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under the Indenture, subject to the rights, if any, under this
Article VI 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.
Upon any payment or distribution of assets of the Company referred to
in this Article VI, the Trustee, subject to the provisions of Section 7.01 of
the Indenture, and the holders of the Debentures, shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the holders of the Debentures, for the purposes of ascertaining
the Persons entitled to participate in such distribution,
-12-
<PAGE>
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 VI.
Section 6.5. Trustee to Effectuate Subordination. Each holder of a
Debenture by such holder's acceptance thereof authorizes and directs the Trustee
on such holder's behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article VI and appoints the
Trustee such holder's attorney-in-fact for any and all such purposes.
Section 6.6. Notice by the Company. The Company shall give prompt
written notice to a Responsible Officer of the Trustee of any fact known to the
Company that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Debentures pursuant to the provisions of this Article
VI. Notwithstanding the provisions of this Article VI or any other provision of
the Indenture and this Second Supplemental Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article VI unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at
the Principal Office of the Trustee from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Section 7.01 of
the Indenture, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section 6.6 at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Debenture), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 7.01 of the
Indenture, shall be entitled to rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness of the
Company (or a trustee on behalf of such holder) to establish that such notice
has been given by a holder of such Senior Indebtedness or a trustee on behalf of
any such holder or holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of such Senior Indebtedness to participate in any payment or
distribution pursuant to this Article VI, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of such Senior Indebtedness held by such Person, the extent to which such Person
is entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article VI, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 6.7. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article VI in respect of any
-13-
<PAGE>
Senior Indebtedness at any time held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in the Indenture or this Second
Supplemental Indenture shall deprive the Trustee of any of its rights as such
holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article VI, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into the Indenture or this Second Supplemental Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of such Senior Indebtedness and, subject to the provisions of Section
7.01 of the Indenture, the Trustee shall not be liable to any holder of such
Senior Indebtedness if it shall pay over or deliver to holders of Debentures,
the Company or any other Person money or assets to which any holder of such
Senior Indebtedness shall be entitled by virtue of this Article VI or otherwise.
Section 6.8. Subordination May Not Be Impaired. No right of any
present or future holder of any Senior Indebtedness of the Company to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of the Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Company may, at any time and from time
to time, without the consent of or notice to the Trustee or the holders of the
Debentures, without incurring responsibility to the holders of the Debentures
and without impairing or releasing the subordination provided in this Article VI
or the obligations hereunder of the holders of the Debentures to the holders of
such Senior Indebtedness, do any one or more the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness, or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any manner
for the collection of such Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.
ARTICLE VII
FORM OF DEBENTURE
Section 7.1. Form of Debenture. The Debentures and the Trustee's
Certificate of Authentication to be endorsed thereon are to be substantially in
the following forms:
(FORM OF FACE OF DEBENTURE)
-14-
<PAGE>
[IF THE DEBENTURE IS TO BE A GLOBAL SECURITY, INSERT: This Debenture
is a Global Security within the meaning of the Indenture hereinafter referred to
and is registered in the name of a Depository or a nominee of a Depository.
This Debenture is exchangeable for Debentures registered in the name of a person
other than the Depository or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture (other than a
transfer of this Debenture as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the issuer
or its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
-15-
<PAGE>
No. $
CUSIP No.
COMMONWEALTH EDISON COMPANY
8.50% SERIES A SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE JANUARY 15, 2027
COMMONWEALTH EDISON COMPANY, an Illinois 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 January 15,
2027, and to pay interest on said principal sum from January 24, 1997 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, semi-annually
(subject to deferral as set forth herein) in arrears on July 15 and January 15
of each year commencing, July 15, 1997, at the rate of 8.50% per annum until
the principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (without duplication and to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest compounded semi-annually 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 consisting of twelve 30-day months. In the event
that any date on which interest is payable on this Debenture 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). 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
(or one or more Predecessor Securities, as defined in said Indenture) is
registered at the close of business on the first day of the month in which such
Interest Payment Date occurs. 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 (or one or more Predecessor Securities) 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 ten (10) days
prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. The principal of
(and premium, if any) and the interest on this Debenture shall be payable at the
office or agency of the Trustee maintained for that purpose in Wilmington,
Delaware, 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 Security Register. Notwithstanding the foregoing, so long as the Holder
of this Debenture is the Property Trustee, the
-16-
<PAGE>
payment of the principal of (and premium, if any) and interest on this Debenture
will be made at such place and to such account as may be designated by the
Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior 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 shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated
COMMONWEALTH EDISON COMPANY
By
[Title]
Attest:
By
[Title]
-17-
<PAGE>
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in the
within-mentioned Indenture.
WILMINGTON TRUST COMPANY, _______________________
Not in Its Individual Capacity But as Authentication Agent
Solely as Trustee
By By
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debt Securities
of the Company (herein sometimes referred to as the "Debentures"), specified in
the Indenture, all issued or to be issued in one or more series under and
pursuant to an Indenture dated as of September 1, 1995, duly executed and
delivered between the Company and Wilmington Trust Company, not in its
individual capacity but solely as trustee (the "Trustee"), as supplemented by
the First Supplemental Indenture dated as of September 19, 1995 between the
Company and the Trustee, and the Second Supplemental Indenture dated as of
January 24, 1997 between the Company and the Trustee (the Indenture as so
supplemented, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made 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, the Debt Securities 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. This series of Debt Securities is limited in aggregate
principal amount as specified in said Second Supplemental Indenture.
If a Tax Event has occurred and is continuing, the Company shall have
the right to redeem this Debenture in whole (but not in part) at any time prior
to January 15, 2007 and within 90 days of the occurrence of such Tax Event, at a
redemption price (the "Tax Event Redemption Price") equal to the greater of (i)
100% of the principal amount of this Debenture or (ii) the sum, as determined by
a Quotation Agent, of the present values of the principal amount and premium
payable as part of the redemption price with respect to an optional redemption
of this Debenture on January 15, 2007, together with scheduled payments of
interest on this Debenture accruing from the redemption date to and including
January 15, 2007, in each case discounted to the redemption date on a semi-
annual basis (assuming a 360-day year consisting of twelve 30-day months) at the
-18-
<PAGE>
Adjusted Treasury Rate, plus, in each case, accrued interest thereon to the date
of such redemption. The Tax Event Redemption Price shall be paid prior to 12:00
noon, New York time, on the date of such redemption or at such earlier time as
the Company determines and specifies in the notice of redemption.
The Company shall have the right to redeem this Debenture, in whole or
in part, from time to time, at any time on or after January 15, 2007 (an
"Optional Redemption"), at a redemption price (the "Optional Redemption Price")
equal to the percentage of the principal amount of this Debenture specified
below, plus, in each case, accrued and unpaid interest thereon to the date of
such redemption if redeemed during the 12-month period beginning January 15 of
the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2007 104.250%
2008 103.825
2009 103.400
2010 102.975
2011 102.550
2012 102.125
2013 101.700
2014 101.275
2015 100.850
2016 100.425
2017 and thereafter 100.000
</TABLE>
Any redemption pursuant to this paragraph will be made upon not less than 30
days' nor more than 60 days' notice, at the Optional Redemption Price. If the
Debentures are only partially redeemed by the Company pursuant to an Optional
Redemption, the Debentures will be redeemed pro rata or by lot or by any other
method utilized by the Trustee; provided that if at the time of redemption, the
Debentures are registered as a Global Security, the Depositary shall determine
by lot the principal amount of such Debentures held by each Debenture holder to
be redeemed.
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 permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debt
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<PAGE>
Securities of each series affected at the time outstanding, as defined in the
Indenture, to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or of modifying in any manner the
rights of the Holders of such Debt Securities; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of this Debenture, or
reduce the principal amount hereof, or reduce the rate or extend the time of
payment of interest hereon, or reduce any premium payable upon the redemption
hereof, without the consent of the Holder hereof or (ii) reduce the aforesaid
percentage of Debt Securities, the Holders of which are required to consent to
any such supplemental indenture, without the consent of the Holders of each Debt
Security then outstanding and affected thereby. The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount of
the Debt Securities of any series at the time outstanding affected thereby, on
behalf of all of the Holders of the Debt Securities of such series, to waive any
past default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture with respect to such series,
and its consequences, except a default in the payment of the principal of or
premium, if any, or interest on any of the Debt Securities of such series. Any
such consent or waiver by the registered Holder of this Debenture (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
Holder and upon all future Holders and owners of this Debenture and of any
Debenture issued in exchange therefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Debenture.
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 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 and from time to time
during the term of the Debentures, to extend the interest payment period of the
Debentures (including this Debenture) for up to ten (10) consecutive semi-annual
periods (an "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 Debentures to the extent that payment of
such interest is enforceable under applicable law). Before the termination of
any such Extended Interest Payment Period, the Company may further extend such
Extended Interest Payment Period, provided that such Extended Interest Payment
Period together with all such further extensions thereof shall not exceed ten
(10) consecutive semi-annual periods or extend beyond the Maturity Date of the
Debentures. At the termination of any such Extended Interest Payment Period and
upon the payment of all Deferred Interest then due, the Company may select a new
Extended Interest Payment Period, subject to the foregoing requirements.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Security Register of the Company, upon surrender of this Debenture
for registration of transfer at the office or agency of the Trustee in
Wilmington, Delaware 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
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<PAGE>
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 due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Security 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 Security 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 paying agent nor any Security
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of, premium
(if any) or the interest on this Debenture, or for any claim based 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.
[The Debentures of this series are issuable only in registered form
without coupons in denominations of $[1,000] and any integral multiple thereof.]
[This Global Security is exchangeable for Debentures in definitive form only
under certain limited circumstances set forth in the Indenture. Debentures of
this series so issued are issuable only in registered form without coupons in
denominations of $[1,000] and any integral multiple thereof.] As provided in the
Indenture and subject to certain limitations [herein and] therein set forth,
Debentures of this series [so issued] 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.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE
AND THE DEBENTURES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES; EXCHANGE
Section 8.1. Original Issue of Debentures. Debentures in the
aggregate principal amount of $154,640,000 may, upon execution of this Second
Supplemental Indenture, be executed
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<PAGE>
by the Company and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and deliver said Debentures to or upon the written
order of the Company, signed by its Chairman, its President or any Vice
President and its Treasurer or an Assistant Treasurer, without any further
action by the Company.
Section 8.2 Exchange of Debentures for Series B Debentures. The
Debentures may be exchanged for Series B Debentures pursuant to the terms of the
Exchange Offer. The Trustee shall make the exchange as follows:
The Company shall present the Trustee with an Officers' Certificate
certifying the following:
(a) upon issuance of the Series B Debentures, the transactions
contemplated by the Exchange Offer have been consummated; and
(b) the principal amount of Debentures properly tendered in the
Exchange Offer that are represented by a Global Security and the
principal amount of Debentures properly tendered in the Exchange
Offer that are represented by definitive securities, the name of
each holder of such definitive securities, the principal amount
properly tendered in the Exchange Offer by each such holder and
the name and address to which definitive securities for Series B
Debentures shall be registered and sent for each such holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel (x) to the effect that the Series B Debentures have been
registered under Section 5 of the Securities Act and the Indenture has been
qualified under the Trust Indenture Act and (y) with respect to the matters set
forth in Section 3(o) of the Registration Rights Agreement and (iii) a Company
Order, shall authenticate (A) a Global Security for Series B Debentures in
aggregate principal amount equal to the aggregate principal amount of Debentures
represented by a Global Security indicated in such Officers' Certificate as
having been properly tendered and (B) definitive securities representing Series
B Debentures registered in the names of, and in the principal amounts indicated
in, such Officers' Certificate.
If the principal amount of the Global Security for the Series B
Debentures is less than the principal amount of the Global Security for the
Debentures, the Trustee shall make an endorsement on such Global Security for
Debentures indicating a reduction in the principal amount represented thereby.
The Trustee shall deliver such definitive securities for Series B
Debentures to the holders thereof as indicated in such Officers' Certificate.
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<PAGE>
ARTICLE IX
MISCELLANEOUS
Section 9.1. Ratification of Indenture. The Indenture, as
supplemented by the First Supplemental Indenture and this Second Supplemental
Indenture, is in all respects ratified and con firmed, and this Second
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.
Section 9.2. Trustee Not Responsible for Recitals. The recitals
herein contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this Second Supplemental
Indenture.
Section 9.3. Governing Law. This Second Supplemental Indenture and
each Debenture shall be deemed to be a contract made under the internal laws of
the State of New York, and for all purposes shall be construed in accordance
with the laws of said State.
Section 9.4. Separability. In case any one or more of the provisions
contained in this Second Supplemental Indenture or in the Debentures shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Second Supplemental Indenture or of the Debentures, but this Second
Supplemental Indenture and the Debentures shall be construed as if such invalid
or illegal or unenforceable provision had never been contained herein or
therein.
Section 9.5. Counterparts. This Second Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
COMMONWEALTH EDISON COMPANY
By: John C. Bukovski
Vice President
[Corporate Seal]
Attest:
David A. Scholz
Secretary
WILMINGTON TRUST COMPANY,
Not in Its Individual Capacity
But Solely as Trustee
By: W. Chris Sponenberg
Title: Senior Financial Services Officer
[Corporate Seal]
Attest:
Debra Eherly
Title: Administrative Account Manager
<PAGE>
STATE OF ILLINOIS )
COUNTY OF COOK ) ss:
On the 24th day of January, 1997, before me personally came John C.
Bukovski, to me known, who, being by me duly sworn, did depose and say that he
is a Vice President of COMMONWEALTH EDISON COMPANY, one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to the said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
NOTARY PUBLIC Lupe Luna
[seal] Commission expires November 9, 1997
STATE OF DELAWARE )
COUNTY OF NEW CASTLE ):
On the 23rd day of January, 1997, before me personally came W. Chris
Sponenberg, to me known, who, being by me duly sworn, did depose and say that he
is a Senior Financial Services Officer of WILMINGTON TRUST COMPANY, one of the
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
NOTARY PUBLIC Kathleen A. Pedelini
[seal] Commission expires October 31, 1998
<PAGE>
Exhibit (4)-4
Commonwealth Edison Company
Form S-4 File No. 333-
===============================================================================
THIRD SUPPLEMENTAL INDENTURE
Dated as of _______________, 1997
Between
COMMONWEALTH EDISON COMPANY
and
WILMINGTON TRUST COMPANY
===============================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
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ARTICLE I
DEFINITIONS
<TABLE>
<CAPTION>
<S> <C> <C>
Section 1.1. Definition of Terms............................................ 2
Section 1.2. Interpretation................................................. 4
ARTICLE II
GENERAL TERMS AND CONDITIONS OF
THE DEBENTURES
Section 2.1. Designation and Principal Amount............................... 5
Section 2.2. Maturity....................................................... 5
Section 2.3. Form and Payment............................................... 5
Section 2.4. Global Debenture............................................... 5
Section 2.5. Interest....................................................... 6
ARTICLE III
REDEMPTION OF THE DEBENTURES
Section 3.1. Tax Event Redemption........................................... 7
Section 3.2. Optional Redemption by Company................................. 7
Section 3.3. No Sinking Fund................................................ 8
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.1. Extension of Interest Payment Period........................... 8
Section 4.2. Notice of Extension............................................ 8
ARTICLE V
EXPENSES
Section 5.1. Payment of Expenses............................................ 9
ARTICLE VI
SUBORDINATION
Section 6.1. Agreement to Subordinate.......................................10
Section 6.2. Default on Senior Indebtedness.................................10
Section 6.3. Liquidation; Dissolution; Bankruptcy...........................10
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 6.4. Subrogation................................................ 12
Section 6.5. Trustee to Effectuate Subordination........................ 12
Section 6.6. Notice by the Company...................................... 13
Section 6.7. Rights of the Trustee; Holders of Senior Indebtedness...... 13
Section 6.8. Subordination May Not Be Impaired.......................... 14
ARTICLE VII
FORM OF DEBENTURE
Section 7.1. Form of Debenture.......................................... 14
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES; EXCHANGE
Section 8.1. Original Issue of Debentures............................... 21
ARTICLE IX
MISCELLANEOUS
Section 9.1. Ratification of Indenture.................................. 22
Section 9.2. Trustee Not Responsible for Recitals....................... 22
Section 9.3. Governing Law.............................................. 22
Section 9.4. Separability............................................... 22
Section 9.5. Counterparts............................................... 22
</TABLE>
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<PAGE>
THIS THIRD SUPPLEMENTAL INDENTURE, dated as of __________, 1997 (the "Third
Supplemental Indenture"), between Commonwealth Edison Company, an Illinois
corporation (the "Company"), and Wilmington Trust Company, not in its individual
capacity but solely as trustee (the "Trustee") under the Indenture dated as of
September 1, 1995 between the Company and the Trustee (the "Indenture") as
supplemented by the First Supplemental Indenture dated as of September 19, 1995
between the Company and the Trustee (the "First Supplemental Indenture") and the
Second Supplemental Indenture dated as of January 24, 1997 between the Company
and the Trustee (the "Second Supplemental Indenture").
W I T N E S S E T H:
WHEREAS, the Company executed and delivered the Indenture to the Trustee to
provide, among other things, for the future issuance of the Company's unsecured
subordinated debt securities, to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Indenture; and
WHEREAS, on January 24, 1997, ComEd Financing II, a Delaware statutory
business trust (the "Trust"), sold $150,000,000 aggregate liquidation amount of
its 8.50 % Series A Capital Securities (Liquidation Amount $1,000 per Capital
Security) (the "Old Capital Securities") and sold $4,640,000 aggregate stated
liquidation amount of its 8.50% Common Securities (Liquidation Amount $1,000 per
Common Security) (the "Common Securities"), such Capital Securities and Common
Securities representing undivided beneficial interests in the assets of the
Trust, and invested the proceeds from such offering in $154,640,000 aggregate
principal amount of the Company's 8.50% Subordinated Deferrable Interest
Debentures due January 15, 2027 (the "Series A Debentures"); and
WHEREAS, pursuant to Section 8.2 of the Second Supplemental Indenture, the
Company desires to exchange a new series of its debt securities to be known as
its 8.50% Series B Subordinated Deferrable Interest Debentures due January 15,
2027 (the "Debentures"), the form and substance of such Debentures and the
terms, provisions and conditions thereof to be set forth as provided in the
Indenture and this Third Supplemental Indenture, for the Series A Debentures;
and
WHEREAS, the Company has requested the Trustee to execute and deliver this
Third Supplemental Indenture, and all requirements necessary to make this Third
Supplemental Indenture a valid instrument, in accordance with its terms, and to
make the Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company, have been
performed, and the execution and delivery of this Third Supplemental Indenture
has been duly authorized in all respects;
NOW, THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.1. Definition of Terms. Unless the context otherwise requires,
(a) a term defined in the Indenture has the same meaning when used in this Third
Supplemental Indenture, (b) a term defined anywhere in this Third Supplemental
Indenture has the same meaning throughout and (c) the following terms have the
meanings given to them in the Declaration: (i) Administrative Trustee; (ii)
Capital Security Certificate; (iii) Clearing Agency; (iv) Delaware Trustee; (v)
Exchange Offer; (vi) No Recognition Opinion; (vii) Property Trustee; (viii) Pro
Rata; (ix) Sponsor; and (x) Tax Event.
In addition, the following terms have the following respective meanings:
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to (i) the yield, under the heading which represents the
average for the immediately prior week, appearing in the most recently published
statistical release designated "H.15 (519)" or any successor publication which
is published weekly by the Federal Reserve Board and which establishes yields on
actively traded United States Treasury securities adjusted to constant maturity
under the caption "Treasury Constant Maturities," for the maturity corresponding
to the Initial Optional Prepayment Date (if no maturity is within three months
before or after the Initial Optional Prepayment Date, yields for the two
published maturities most closely corresponding to the Initial Optional
Prepayment Date shall be determined and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis, rounding
to the nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date, in each case calculated on
the third Business Day preceding the redemption date, plus in each case (a) 1.25
% if such redemption date occurs on or prior to January 15, 1998, and (b) 0.50%
in all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity date corresponding to the
Initial Optional Prepayment Date that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities with a maturity date corresponding to the
Initial Optional Prepayment Date. If no United States Treasury security has a
maturity date which is within three months before or after the Initial Optional
Prepayment Date, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasure Issue, and the calculation
of the Adjusted Treasury Rate pursuant to clause (ii) of the definition thereof
shall be interpolated or extrapolated on a straight line basis, rounding to the
nearest month.
"Comparable Treasury Price" means, with respect any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as
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<PAGE>
a percentage of its principal amount) on the third Business Day preceding such
redemption date, as set forth in the daily statistical release (or any successor
release) published by the Federal Reserve Bank of New York and designated
"Composite 3:30 p.m. Quotations for U.S. Government Securities" or (ii) if such
release (or any successor release) is not published or does not contain such
prices on such Business Day, (a) the average of three Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest and lowest of
such Reference Treasury Dealer Quotations, or (b) if the Trustee obtains fewer
than three such Reference Treasury Dealer Quotations, the average of all such
quotations.
"Declaration" means the Amended and Restated Declaration of Trust of ComEd
Financing II, a Delaware statutory business trust, dated as of January 24, 1997.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Tax Event, the Trust is to be dissolved in accordance with the
Declaration and the Debentures held by the Property Trustee are to be
distributed to the holders of the Trust Securities issued by the Trust Pro Rata
in accordance with the Declaration.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System.
"Initial Optional Prepayment Date" means January 15, 2007.
"Guarantees" means the guarantees by the Company of the payment of
distributions of moneys held by the Trust and payments on liquidation of the
Trust.
"Initial Purchasers" means the entities so identified in the Purchase
Agreement.
"Maturity Date" means the date on which the Debentures mature and on which
the principal shall be due and payable together with all accrued and unpaid
interest thereon including Compounded Interest and Additional Interest, if any.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Trustee after consultation with the Company.
"Reference Treasury Dealer" means: (i) Merrill Lynch Government Securities,
Inc. and its successors; provided, however, that if the foregoing shall cease to
be a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by the
Trustee after consultation with the Company.
"Reference Treasury Dealer Quotation" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its
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<PAGE>
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third Business Day preceding
such redemption date.
"Senior Indebtedness" means (i) any payment in respect of (A) indebtedness
of the Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds, notes or other similar instruments issued by the Company
including, without limitation, indebtedness evidenced by securities issued
pursuant to the provisions of the Mortgage dated July 1, 1923, as supplemented
by Supplemental Indenture dated August 1, 1944 and subsequent supplemental
indentures, between the Company, as mortgagor, and Harris Trust and Savings Bank
and D.G. Donovan, as trustees; the Indenture dated as of September 1, 1987, as
supplemented and amended, between the Company and Citibank, N.A., as trustee;
the Indentures dated April 1, 1949, October 1, 1949, October 1, 1950, October 1,
1954, January 1, 1958, January 1, 1959 and December 1, 1961, between the Company
and Amalgamated Bank, as successor trustee to The First National Bank of
Chicago; and the Indenture dated February 15, 1973, as supplemented, between the
Company and LaSalle National Bank, as successor trustee to The First National
Bank of Chicago; (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
such obligor under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) all obligations of the
Company for reimbursement on any letter of credit, banker's acceptance, security
purchase facility or similar credit transaction; (v) all obligations of the type
referred to in clauses (i) through (iv) of other persons for the payment of
which 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 such obligor), except for (1) any
such indebtedness that is by its terms subordinated to or pari passu with the
Debentures, as the case may be, including all other debt securities and
guarantees in respect of those debt securities, issued to any other trusts,
partnerships or any other entity affiliated with the Company which is a
financing vehicle of the Company ("Financing Entity") in connection with an
issuance of preferred securities by such Financing Entity or other securities
which rank pari passu with, or junior to, the Capital Securities, and (2) any
indebtedness between or among the Company and its Affiliates.
Section 1.2. Interpretation. Each definition in this Third Supplemental
Indenture includes the singular and the plural, and references to the neuter
gender include the masculine and feminine where appropriate. Terms which relate
to accounting matters shall be interpreted in accordance with generally accepted
accounting principles in effect from time to time. References to any statute
mean such statute as amended at the time and include any successor legislation.
The word "or" is not exclusive, and the words "herein," "hereof" and "hereunder"
refer to this Third Supplemental Indenture as a whole. The headings to the
Articles and Sections are for convenience of reference and shall not affect the
meaning or interpretation of this Third Supplemental Indenture. References to
Articles and Sections mean the Articles and Sections of this Third Supplemental
Indenture.
-4-
<PAGE>
ARTICLE II
GENERAL TERMS AND CONDITIONS OF
THE DEBENTURES
Section 2.1. Designation and Principal Amount. There is hereby
authorized a series of Debt Securities designated the "8.50 % Series B
Subordinated Deferrable Interest Debentures due January 15, 2027," limited in
aggregate principal amount to $154,640,000, which amount shall be as set forth
in any written order of the Company for the authentication and delivery of
Debentures pursuant to Section 2.04 of the Indenture.
Section 2.2. Maturity. The Maturity Date will be January 15, 2027.
Section 2.3. Form and Payment. Except as provided in Section 2.4,
the Debentures shall be issued in fully registered certificated form without
interest coupons. Principal and interest on the Debentures issued in
certificated form will be payable, the transfer of such Debentures will be
registrable and such Debentures will be exchangeable for Debentures bearing
identical terms and provisions at the office or agency of the Trustee in
Wilmington, Delaware, 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 Security Register. Notwithstanding the foregoing,
so long as the registered holder of any Debentures is the Property Trustee, the
payment of the principal of, premium (if any) and interest (including Compounded
Interest and Additional Interest, if any) on such Debentures held by the
Property Trustee will be made at such place and to such account as may be
designated by the Property Trustee.
Section 2.4. Global Debenture. In the event that the Sponsor gives
notice of its election to liquidate the Trust pursuant to Section 8.1(a)(iii) of
the Declaration:
(a) the Debentures in certificated form may be presented to the
Trustee by the Property Trustee in exchange for a Global Security in an
aggregate principal amount equal to the aggregate principal amount of the
Debentures so presented, to be registered in the name of the Depositary, or
its nominee, and delivered by the Trustee to the Depositary for crediting
to the accounts of its participants pursuant to the instructions of the
Administrative Trustees. The Company, upon any such presentation, shall
execute a Global Security in such aggregate principal amount and deliver
the same to the Trustee for authentication and delivery in accordance with
the Indenture and this Third Supplemental Indenture; and any payments on
the Debentures issued as a Global Security will be made to the Depositary;
and
(b) if any Capital Securities are held in non book-entry certificated
form, the Debentures in certificated form may be presented to the Trustee
by the Property Trustee and any Capital Security Certificate which
represents Capital Securities other than Capital Securities held by the
Clearing Agency or its nominee ("Non Book-
-5-
<PAGE>
Entry Capital Securities") will be deemed to represent beneficial interests
in Debentures presented to the Trustee by the Property Trustee having an
aggregate principal amount equal to the aggregate stated liquidation amount
of the Non Book-Entry Capital Securities until such Capital Security
Certificates are presented to the Security Registrar for transfer or
reissuance at which time such Capital Security Certificates will be
canceled and a Debenture, registered in the name of the holder of such
Capital Security Certificate or the transferee of the holder of such
Capital Security Certificate, as the case may be, with an aggregate
principal amount equal to the aggregate stated liquidation amount of the
Capital Security Certificate canceled, will be executed by the Company and
delivered to the Trustee for authentication and delivery in accordance with
the Indenture and this Third Supplemental Indenture. On issue of such
Debentures, Debentures with an equivalent aggregate principal amount that
were presented by the Property Trustee to the Trustee will be deemed to
have been cancelled.
Section 2.5. Interest. (a) Each Debenture will bear interest at the
rate of 8.50% per annum (the "Coupon Rate") from January 24, 1997 or from the
most recent Interest Payment Date (as defined below) until the principal
thereof becomes due and payable, and on any overdue principal and (to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the Coupon Rate, compounded semi-annually,
payable (subject to the provisions of Article IV) semi-annually in arrears on
July 15 and January 15 of each year (each, an "Interest Payment Date"),
commencing on July 15, 1997, to the Person in whose name such Debenture or any
predecessor Debenture is registered, at the close of business on the first day
of July and January, respectively.
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year consisting of twelve 30-day months. In the event
that any date on which interest is payable on the 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). The amount of interest payable for any
period shorter than a full calendar month for which interest is computed, will
be computed on the basis of the actual number of days elapsed in such month.
(c) If at any time while the Property Trustee is the holder of any
Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any case, the Company will pay as additional interest ("Additional
Interest") on the Debentures held by the Property Trustee, such additional
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee after paying such taxes, duties, assessments
or other governmental charges will be equal to the amounts the Trust and the
Property Trustee would have received had no such taxes, duties, assessments or
other government charges been imposed.
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<PAGE>
ARTICLE III
REDEMPTION OF THE DEBENTURES
Section 3.1. Tax Event Redemption. If a Tax Event has occurred and
is continuing, then, notwithstanding Section 3.2, the Company shall have the
right, upon not less than 30 days' nor more than 60 days' notice to the
registered holders of the Debentures, to redeem the Debentures, in whole (but
not in part), for cash at any time prior to January 15, 2007 and within 90 days
of the occurrence of such Tax Event (the "90 Day Period") at a redemption price
(the "Tax Event Redemption Price") equal to the greater for (i) 100% of the
principal amount of such Debentures or (ii) the sum, as determined by a
Quotation Agent, of the present values of the principal amount and premium
payable as part of the redemption price with respect to an optional redemption
of such Debentures on January 15, 2007, together with scheduled payments of
interest on the Debentures accruing from the redemption date to and including
January 15, 2007, in each case discounted to the redemption date on a semi-
annual basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate, plus, in each case, accrued interest thereon to the date
of such redemption. The Tax Event Redemption Price shall be paid prior to 12:00
noon, New York time, on the date of such redemption or at such earlier time as
the Company determines and specifies in the notice of redemption, provided the
Company shall deposit with the Trustee an amount sufficient to pay the Tax Event
Redemption Price by 11:00 a.m. on the date such Tax Event Redemption Price is to
be paid.
Section 3.2. Optional Redemption by Company. Subject to the
provisions of Article III of the Indenture, except as otherwise specified in
this Third Supplemental Indenture, the Company shall have the right to redeem
the Debentures, in whole or in part, from time to time, on or after January 15,
2007, at a redemption price (the "Optional Redemption Price") equal to the
percentage of the principal amount of the Debentures specified below, plus, in
each case, accrued and unpaid interest thereon to the date of such redemption if
redeemed during the 12-month period beginning January 15 of the years indicated
below:
<TABLE>
<CAPTION>
Year Percentage
------------------- ----------
<S> <C>
2007 104.250%
2008 103.825
2009 103.400
2010 102.975
2011 102.550
2012 102.125
2013 101.700
2014 101.275
2015 101.850
2016 100.425
2017 and thereafter 100.000
</TABLE>
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<PAGE>
Any redemption pursuant to this Section 3.2 will be made upon not less than 30
days' nor more than 60 days' notice to the registered holder of the Debentures,
at the Optional Redemption Price. If the Debentures are only partially redeemed
pursuant to this Section 3.2, the Debentures will be redeemed pro rata or by lot
or by any other method utilized by the Trustee; provided, that if at the time of
redemption, the Debentures are registered as a Global Security, the Depositary
shall determine by lot the principal amount of such Debentures held by each
Debenture holder to be redeemed. The Optional Redemption Price shall be paid
prior to 12:00 noon, New York time, on the date of such redemption or at such
earlier time as the Company determines and specifies in the notice of
redemption, provided the Company shall deposit with the Trustee an amount
sufficient to pay the Optional Redemption Price by 11:00 a.m. on the date such
Optional Redemption Price is to be paid.
Section 3.3. No Sinking Fund. The Debentures are not entitled to the
benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.1. Extension of Interest Payment Period. So long as no
Event of Default has occurred and is continuing, the Company shall have the
right, at any time and from time to time during the term of the Debentures, to
extend the interest payment period of such Debentures for up to ten (10)
consecutive semi-annual periods (the "Extended Interest Payment Period"). To
the extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
this Section 4.1, will bear interest compounded semi-annually at the Coupon Rate
for each semi-annual period of the Extended Interest Payment Period ("Compounded
Interest"). At the end of the Extended Interest Payment Period, the Company
shall pay all interest accrued and unpaid on the Debentures, including any
Compounded Interest and Additional Interest ("Deferred Interest") which shall be
payable to the holders of the Debentures in whose names the Debentures are
registered in the Security Register on the record date immediately preceding the
end of the Extended Interest Payment Period. Before the termination of any
Extended Interest Payment Period, the Company may further extend such period,
provided that such period together with all such further extensions thereof
shall not exceed ten (10) consecutive semi-annual periods or extend beyond the
Maturity Date of the Debentures. Upon the termination of any Extended Interest
Payment Period and upon the payment of all Deferred Interest then due, the
Company may select a new Extended Interest Payment Period, subject to the
foregoing requirements. No interest shall be due and payable during an Extended
Interest Payment Period, except at the end thereof, but the Company may pay at
any time all or any portion of the interest accrued during an Extended Interest
Payment Period.
Section 4.2. Notice of Extension. (a) If the Property Trustee is
the only registered holder of the Debentures at the time the Company selects an
Extended Interest Payment Period, the Company shall give written notice to the
Administrative Trustees, the Property Trustee and the
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<PAGE>
Trustee of its selection of such Extended Interest Payment Period on the earlier
of (i) ten days prior to the next succeeding date on which Distributions on the
Trust Securities issued by the Trust are payable, or (ii) the date the Trust or
the Administrative Trustees are required to give notice of the record or payment
date for such Distributions to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of the Capital Securities issued by
the Trust, but in any event at least ten days before such record date.
(b) If the Property Trustee is not the only holder of the Debentures
at the time the Company selects an Extended Interest Payment Period, the Company
shall give the holders of the Debentures and the Trustee written notice of its
selection of such Extended Interest Payment Period ten days before the earlier
of (i) the next succeeding Interest Payment Date, or (ii) the date the Company
is required to give notice of the record or payment date of such interest
payment to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Debentures, but in any event at least ten days
before such record date.
(c) The period in which any notice is given pursuant to paragraphs (a)
or (b) of this Section 4.2 shall be counted as one of the 10 semi-annual periods
permitted in the maximum Extended Interest Payment Period permitted under
Section 4.1.
ARTICLE V
EXPENSES
Section 5.1. Payment of Expenses. In connection with the offering,
exchange and issuance of the Debentures to the Property Trustee, the Company
shall:
(a) pay all costs and expenses relating to the offering, exchange and
issuance of the Debentures;
(b) pay all costs and expenses of the Trust (including, but not
limited to, the fees and expenses of the Property Trustee and the Delaware
Trustee, the costs and expenses relating to the operation of the Trust,
including without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving
and computing or accounting equipment, paying agent(s), registrar(s),
transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection
with the acquisition, financing, and disposition of Trust assets); and
(c) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
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<PAGE>
ARTICLE VI
SUBORDINATION
Section 6.1. Agreement to Subordinate. The Company covenants and
agrees, and each holder of Debentures issued hereunder by such holder's
acceptance thereof likewise covenants and agrees, that all Debentures shall be
issued subject to the provisions of this Article VI; and each holder of a
Debenture, whether upon original issue or upon transfer or assignment thereof,
accepts and agrees to be bound by such provisions.
The payment by the Company of the principal of, premium, if any, and
interest on all Debentures issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and subject in right of payment to
the prior payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Third Supplemental Indenture or thereafter
incurred.
No provision of this Article VI shall prevent the occurrence of any
default or Event of Default hereunder.
Section 6.2. Default on Senior Indebtedness. In the event and during
the continuation of any default by the Company in the payment of principal,
premium, interest or any other payment due on any Senior Indebtedness of the
Company, or in the event that the maturity of any Senior Indebtedness of the
Company has been accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the principal (including
redemption payments, if any) of premium, if any, or interest on the Debentures.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any holder when such payment is prohibited by the
preceding paragraph of this Section 6.2, such payment shall be held in trust for
the benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee within 90 days of such payment
of the amounts then due and owing on the Senior Indebtedness and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
Senior Indebtedness.
Section 6.3. Liquidation; Dissolution; Bankruptcy. Upon any payment
by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution or winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due upon all Senior Indebtedness of the Company
shall first be paid in full, or payment thereof provided for in money in
accordance with its terms, before any payment is made by the Company on account
of the principal (and premium, if any) or
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<PAGE>
interest on the Debentures; and upon any such dissolution or winding-up or
liquidation or reorganization, any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to which the holders of the Debentures or the Trustee would be
entitled to receive from the Company, except for the provisions of this Article
VI, shall be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the holders of the Debentures or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness of the
Company (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay such Senior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness, before any payment or distribution is made
to the holders of Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the holders of the Debentures before all Senior Indebtedness of the
Company is paid in full, or provision is made for such payment in money in
accordance with its terms, such payment or distribution shall be held in trust
for the benefit of and shall be paid over or delivered to the holders of such
Senior Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness of the Company remaining unpaid to the extent
necessary to pay such Senior Indebtedness in full in money in accordance with
its terms, after giving effect to any concurrent payment or distribution to or
for the benefit of the holders of such Senior Indebtedness.
For purposes of this Article VI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article VI with respect
to the Debentures to the payment of all Senior Indebtedness of the Company that
may at the time be outstanding, provided that (i) such Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such reorganization
or readjustment, and (ii) the rights of the holders of such Senior Indebtedness
are not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article X of the Indenture shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 6.3 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated
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<PAGE>
in Article X of the Indenture. Nothing in Section 6.2 or in this Section 6.3
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.06 of the Indenture.
Section 6.4. Subrogation. Subject to the payment in full of all
Senior Indebtedness of the Company, the rights of the holders of the Debentures
shall be subrogated to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of cash, property or securities of the Company
applicable to such Senior Indebtedness until the principal of (and premium, if
any) and interest on the Debentures shall be paid in full; and, for the purposes
of such subrogation, no payments or distributions to the holders for such Senior
Indebtedness of any cash, property or securities to which the holders of the
Debentures or the Trustee would be entitled except for the provisions of this
Article VI, and no payment over pursuant to the provisions of this Article VI,
to or for the benefit of the holders of such Senior Indebtedness by holders of
the Debentures or the Trustee, shall, as between the Company, its creditors
other than holders of Senior Indebtedness of the Company, and the holders of the
Debentures be deemed to be a payment by the Company to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article VI
are and are intended solely for the purposes of defining the relative rights of
the holders of the Debentures, on the one hand, and the holders of such Senior
Indebtedness on the other hand.
Nothing contained in this Article VI or elsewhere in this Indenture or
in the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness of the Company, and the
holders of the Debentures, the obligation of the Company which is absolute and
unconditional, to pay to the holders of the Debentures the principal of (and
premium, if any) 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 the holders of the Debentures and creditors
of the Company, other than the holders of Senior Indebtedness of the Company,
nor shall anything herein or therein prevent the Trustee or the holder of any
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under the Indenture, subject to the rights, if any, under this
Article VI 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.
Upon any payment or distribution of assets of the Company referred to
in this Article VI, the Trustee, subject to the provisions of Section 7.01 of
the Indenture, and the holders of the Debentures, shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the holders of the Debentures, for the purposes 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 VI.
Section 6.5. Trustee to Effectuate Subordination. Each holder of a
Debenture by such holder's acceptance thereof authorizes and directs the Trustee
on such holder's behalf to take
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<PAGE>
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article VI and appoints the Trustee such holder's attorney-in-
fact for any and all such purposes.
Section 6.6. Notice by the Company. The Company shall give prompt
written notice to a Responsible Officer of the Trustee of any fact known to the
Company that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Debentures pursuant to the provisions of this Article
VI. Notwithstanding the provisions of this Article VI or any other provision of
the Indenture and this Third Supplemental Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article VI unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at
the Principal Office of the Trustee from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Section 7.01 of
the Indenture, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section 6.6 at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Debenture), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 7.01 of the
Indenture, shall be entitled to rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness of the
Company (or a trustee on behalf of such holder) to establish that such notice
has been given by a holder of such Senior Indebtedness or a trustee on behalf of
any such holder or holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of such Senior Indebtedness to participate in any payment or
distribution pursuant to this Article VI, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of such Senior Indebtedness held by such Person, the extent to which such Person
is entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article VI, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 6.7. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article VI in respect of any Senior Indebtedness at any time held
by it, to the same extent as any other holder of Senior Indebtedness, and
nothing in the Indenture or this Third Supplemental Indenture shall deprive the
Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set
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<PAGE>
forth in this Article VI, and no implied covenants or obligations with respect
to the holders of such Senior Indebtedness shall be read into the Indenture or
this Third Supplemental Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Section 7.01 of the Indenture, the Trustee shall
not be liable to any holder of such Senior Indebtedness if it shall pay over or
deliver to holders of Debentures, the Company or any other Person money or
assets to which any holder of such Senior Indebtedness shall be entitled by
virtue of this Article VI or otherwise.
Section 6.8. Subordination May Not Be Impaired. No right of any
present or future holder of any Senior Indebtedness of the Company to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of the Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Company may, at any time and from time
to time, without the consent of or notice to the Trustee or the holders of the
Debentures, without incurring responsibility to the holders of the Debentures
and without impairing or releasing the subordination provided in this Article VI
or the obligations hereunder of the holders of the Debentures to the holders of
such Senior Indebtedness, do any one or more the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness, or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any manner
for the collection of such Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.
ARTICLE VII
FORM OF DEBENTURE
Section 7.1. Form of Debenture. The Debentures and the Trustee's
Certificate of Authentication to be endorsed thereon are to be substantially in
the following forms:
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL SECURITY, INSERT: This Debenture
is a Global Security within the meaning of the Indenture hereinafter referred to
and is registered in the name of a Depository or a nominee of a Depository.
This Debenture is exchangeable for Debentures registered in the name of a person
other than the Depository or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this
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<PAGE>
Debenture (other than a transfer of this Debenture as a whole by the Depository
to a nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository) may be registered except in
limited circumstances.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the issuer
or its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
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No. _______________ $_____________
CUSIP No. __________
COMMONWEALTH EDISON COMPANY
8.50% SERIES B SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE JANUARY 15, 2027
COMMONWEALTH EDISON COMPANY, an Illinois 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 January 15,
2027, and to pay interest on said principal sum from January 24, 1997 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, semi-annually
(subject to deferral as set forth herein) in arrears on July 15 and January 15
of each year commencing, July 15, 1997, at the rate of 8.50% per annum until
the principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (without duplication and to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest compounded semi-annually 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 consisting of twelve 30-day months. In the event
that any date on which interest is payable on this Debenture 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). 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
(or one or more Predecessor Securities, as defined in said Indenture) is
registered at the close of business on the first day of the month in which such
Interest Payment Date occurs. 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 (or one or more Predecessor Securities) 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 ten (10) days
prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. The principal of
(and premium, if any) and the interest on this Debenture shall be payable at the
office or agency of the Trustee maintained for that purpose in Wilmington,
Delaware, 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 Security Register. Notwithstanding the foregoing, so long as the Holder
of this Debenture is the Property Trustee, the
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payment of the principal of (and premium, if any) and interest on this Debenture
will be made at such place and to such account as may be designated by the
Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior 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 shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated _________________
COMMONWEALTH EDISON COMPANY
By: ________________________________
[Title]
Attest:
By: ____________________________
[Title]
-17-
<PAGE>
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in the
within-mentioned Indenture.
WILMINGTON TRUST COMPANY, ______________________________
Not in Its Individual Capacity But as Authentication Agent
Solely as Trustee
By: ____________________________ By: _____________________________
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debt Securities
of the Company (herein sometimes referred to as the "Debentures"), specified in
the Indenture, all issued or to be issued in one or more series under and
pursuant to an Indenture dated as of September 1, 1995, duly executed and
delivered between the Company and Wilmington Trust Company, not in its
individual capacity but solely as trustee (the "Trustee"), as supplemented by
the First Supplemental Indenture dated as of September 19, 1995 between the
Company and the Trustee, the Second Supplemental Indenture dated as of January
24, 1997 between the Company and the Trustee and the Third Supplemental
Indenture dated as of _____________, 1997 between the Company and the Trustee
(the Indenture as so supplemented, the "Indenture"), to which Indenture and all
indentures supplemental thereto reference is hereby made 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, the Debt Securities 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. This series of Debt Securities is limited in aggregate
principal amount as specified in said Third Supplemental Indenture.
If a Tax Event has occurred and is continuing, the Company shall have
the right to redeem this Debenture in whole (but not in part) at any time prior
to January 15, 2007 and within 90 days of the occurrence of such Tax Event, at a
redemption price (the "Tax Event Redemption Price") equal to the greater of (i)
100% of the principal amount of this Debenture or (ii) the sum, as determined by
a Quotation Agent, of the present values of the principal amount and premium
payable as part of the redemption price with respect to an optional redemption
of this Debenture on January 15, 2007, together with scheduled payments of
interest on this Debenture accruing from the redemption date to and including
January 15, 2007, in each case discounted to the redemption date
-18-
<PAGE>
on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate, plus, in each case, accrued interest
thereon to the date of such redemption. The Tax Event Redemption Price shall be
paid prior to 12:00 noon, New York time, on the date of such redemption or at
such earlier time as the Company determines and specifies in the notice of
redemption.
The Company shall have the right to redeem this Debenture, in whole or
in part, from time to time, at any time on or after January 15, 2007 (an
"Optional Redemption"), at a redemption price (the "Optional Redemption Price")
equal to the percentage of the principal amount of this Debenture specified
below, plus, in each case, accrued and unpaid interest thereon to the date of
such redemption if redeemed during the 12-month period beginning January 15 of
the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2007 104.250%
2008 103.825
2009 103.400
2010 102.975
2011 102.550
2012 102.125
2013 101.700
2014 101.275
2015 100.850
2016 100.425
2017 and thereafter 100.000
</TABLE>
Any redemption pursuant to this paragraph will be made upon not less than 30
days' nor more than 60 days' notice, at the Optional Redemption Price. If the
Debentures are only partially redeemed by the Company pursuant to an Optional
Redemption, the Debentures will be redeemed pro rata or by lot or by any other
method utilized by the Trustee; provided that if at the time of redemption, the
Debentures are registered as a Global Security, the Depositary shall determine
by lot the principal amount of such Debentures held by each Debenture holder to
be redeemed.
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.
-19-
<PAGE>
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debt Securities of each series affected at the
time outstanding, as defined in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of such Debt
Securities; provided, however, that no such supplemental indenture shall (i)
extend the fixed maturity of this Debenture, or reduce the principal amount
hereof, or reduce the rate or extend the time of payment of interest hereon, or
reduce any premium payable upon the redemption hereof, without the consent of
the Holder hereof or (ii) reduce the aforesaid percentage of Debt Securities,
the Holders of which are required to consent to any such supplemental indenture,
without the consent of the Holders of each Debt Security then outstanding and
affected thereby. The Indenture also contains provisions permitting the Holders
of a majority in aggregate principal amount of the Debt Securities of any series
at the time outstanding affected thereby, on behalf of all of the Holders of the
Debt Securities of such series, to waive any past default in the performance of
any of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a default in
the payment of the principal of or premium, if any, or interest on any of the
Debt Securities of such series. Any such consent or waiver by the registered
Holder of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Debenture and of any Debenture issued in exchange therefor or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this
Debenture.
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 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 and from time to time
during the term of the Debentures, to extend the interest payment period of the
Debentures (including this Debenture) for up to ten (10) consecutive semi-annual
periods (an "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 Debentures to the extent that payment of
such interest is enforceable under applicable law). Before the termination of
any such Extended Interest Payment Period, the Company may further extend such
Extended Interest Payment Period, provided that such Extended Interest Payment
Period together with all such further extensions thereof shall not exceed ten
(10) consecutive semi-annual periods or extend beyond the Maturity Date of the
Debentures. At the termination of any such Extended Interest Payment Period and
upon the payment of all Deferred Interest then due, the Company may select a new
Extended Interest Payment Period, subject to the foregoing requirements.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Security Register of the Company, upon surrender of this Debenture
for registration of transfer at the office or agency of the Trustee in
-20-
<PAGE>
Wilmington, Delaware 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 due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Security 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 Security 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 paying agent nor any Security
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of, premium
(if any) or the interest on this Debenture, or for any claim based 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.
[The Debentures of this series are issuable only in registered form
without coupons in denominations of $[1,000] and any integral multiple thereof.]
[This Global Security is exchangeable for Debentures in definitive form only
under certain limited circumstances set forth in the Indenture. Debentures of
this series so issued are issuable only in registered form without coupons in
denominations of $[1,000] and any integral multiple thereof.] As provided in the
Indenture and subject to certain limitations [herein and] therein set forth,
Debentures of this series [so issued] 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.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE
AND THE DEBENTURES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
-21-
<PAGE>
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES; EXCHANGE
Section 8.1. Original Issue of Debentures. Debentures in the
aggregate principal amount of $154,640,000 may, upon execution of this Third
Supplemental Indenture, be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver
said Debentures to or upon the written order of the Company, signed by its
Chairman, its President or any Vice President and its Treasurer or an Assistant
Treasurer, without any further action by the Company.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Ratification of Indenture. The Indenture, as
supplemented by the First Supplemental Indenture, the Second Supplemental
Indenture and this Third Supplemental Indenture, is in all respects ratified and
confirmed, and this Third Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein provided.
Section 9.2. Trustee Not Responsible for Recitals. The recitals
herein contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this Third Supplemental
Indenture.
Section 9.3. Governing Law. This Third Supplemental Indenture and
each Debenture shall be deemed to be a contract made under the internal laws of
the State of New York, and for all purposes shall be construed in accordance
with the laws of said State.
Section 9.4. Separability. In case any one or more of the provisions
contained in this Third Supplemental Indenture or in the Debentures shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Third Supplemental Indenture or of the Debentures, but this Third
Supplemental Indenture and the Debentures shall be construed as if such invalid
or illegal or unenforceable provision had never been contained herein or
therein.
Section 9.5. Counterparts. This Third Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
-22-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
COMMONWEALTH EDISON COMPANY
By: ________________________________
Vice President
[Corporate Seal]
Attest:
_____________________________
Secretary
WILMINGTON TRUST COMPANY,
Not in Its Individual Capacity
But Solely as Trustee
By: ________________________________
Title:
[Corporate Seal]
Attest:
Title:
-23-
<PAGE>
STATE OF ILLINOIS )
COUNTY OF COOK ) ss:
On the ____ day of ____________, 1997, before me personally came John
C. Bukovski, to me known, who, being by me duly sworn, did depose and say that
he is a Vice President of COMMONWEALTH EDISON COMPANY, one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to the said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
_________________________________
NOTARY PUBLIC
_________________________________
[seal] Commission expires
STATE OF DELAWARE )
COUNTY OF NEW CASTLE ):
On the ________ day of ___________, 1997, before me personally came
W. Chris Sponenberg, to me known, who, being by me duly sworn, did depose and
say that he is a Senior Financial Services Officer of WILMINGTON TRUST COMPANY,
one of the corporations described in and which executed the above instrument;
that he knows the corporate seal of said corporation; that the seal affixed to
the said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that he signed his name
thereto by like authority.
_________________________________
NOTARY PUBLIC
_________________________________
[seal] Commission expires
<PAGE>
Exhibit (4)-5
ComEd Financing II
Form S-4 File No. 333-
CERTIFICATE OF TRUST
The undersigned, the trustees of ComEd Financing II desiring to form a
business trust pursuant to Delaware Business Trust Act, 12 Del. C. (S) 3810,
hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust")
is "ComEd Financing II".
2. The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is as follows:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
3. This Certificate of Trust shall be effective as of the date of
filing.
Dated: November 19, 1996
John C. Bukovski
---------------------------------
John C. Bukovski, as Trustee
Dennis F. O'Brien
---------------------------------
Dennis F. O'Brien, as Trustee
WILMINGTON TRUST COMPANY, as
Trustee
By: W. Chris Sponenberg
-----------------------------
Name: W. Chris Sponenberg
Title: Senior Financial Services
Officer
<PAGE>
Exhibit (4)-6
ComEd Financing II
Form S-4 File No. 333-
DECLARATION OF TRUST
of
ComEd Financing II
THIS DECLARATION OF TRUST (this "Declaration"), dated and effective as
of November 19, 1996, by the undersigned trustees (together with all other
Persons from time to time duly appointed and serving as trustees in accordance
with the provisions of this Declaration, the "Trustees"), Commonwealth Edison
Company, an Illinois corporation, as trust sponsor (the "Sponsor"), and by the
holders, from time to time, of undivided beneficial interests in the Trust to be
issued pursuant to this Declaration;
W I T N E S S E T H:
WHEREAS, the Trustees and the Sponsor desire to establish a trust (the
"Trust") pursuant to the Delaware Business Trust Act for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Debt Securities (as hereinafter defined) of the Debt Issuer (as
hereinafter defined);
NOW, THEREFORE, it being the intention of the parties hereto that the
Trust constitute a business trust under the Delaware Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions. Capitalized terms used in this Declaration
but not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1. A term defined anywhere in this Declaration has the
same meaning throughout.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
<PAGE>
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to
close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. (S)(S)3801 et seq.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Common Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be
set out in any amendment to this Declaration.
"Common Security Certificate" means a certificate representing a
Common Security.
"Covered Person" means any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or its Affiliates.
"Debt Issuer" means Commonwealth Edison Company, an Illinois
corporation, in its capacity as the issuer of the Debt Securities.
"Debt Securities" means the series of Debt Securities to be issued by
the Debt Issuer.
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities and Exchange Act of 1934.
"Holder" means the Person in whose name a Certificate representing a
Security is registered.
"Indemnified Person" means any Trustee, any Affiliate of any Trustee,
or any officers, directors, shareholders, members, partners, employees,
representatives or agents of any Trustee, or any employee or agent of the
Trust or its Affiliates.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated association, or government
or any agency or political subdivision thereof, or any other entity of
whatever nature.
"Preferred Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be
set out in any amendment to this Declaration.
-2-
<PAGE>
"Preferred Security Certificate" means a certificate representing a
Preferred Security.
"Regular Trustee" means any Trustee other than the Delaware Trustee,
acting in its capacity as Delaware Trustee.
"Securities" mean the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933.
"Sponsor" means Commonwealth Edison Company, an Illinois corporation,
in its capacity as sponsor of the Trust.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office
in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and references herein to a Trustee
or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
SECTION 1.2. Interpretation. Each definition in this Declaration
includes the singular and the plural, and references to the neuter gender
include the masculine and feminine where appropriate. Terms which relate to
accounting matters shall be interpreted in accordance with generally accepted
accounting principles in effect from time to time. References to any statute
mean such statute as amended at the time and include any successor legislation.
The word "or" is not exclusive, and the words "herein," "hereof" and "hereunder"
refer to this Declaration as a whole. The headings to the Articles and Sections
are for convenience of reference and shall not affect the meaning or
interpretation of this Declaration. References to Articles, Sections and
Exhibits mean the Articles, Sections and Exhibits of this Declaration. The
Exhibits are hereby incorporated by reference into, and shall be deemed a part
of, this Declaration.
ARTICLE II
ORGANIZATION
SECTION 2.1. Name. The Trust created by this Declaration is named
"ComEd Financing II". The Trust's activities may be conducted under the name of
the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 2.2. Office. The address of the principal office of the
Trust is c/o Commonwealth Edison Company, One First National Plaza - 37th Floor,
10 South Dearborn Street, Chicago, Illinois 60690-0767. At any time, the
Regular Trustees may designate another principal office.
-3-
<PAGE>
SECTION 2.3. Purpose. The exclusive purposes and functions of the
Trust are (a) to issue and sell Securities and use the proceeds from such sale
to acquire the Debt Securities and (b) except as otherwise limited herein, to
engage in only those other activities necessary, or incidental thereto. The
Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments or pledge any of its assets.
SECTION 2.4. Authority. Subject to the limitations provided in this
Declaration, the Regular Trustee shall have exclusive and complete authority to
carry out the purposes of the Trust. An action taken by the Regular Trustees in
accordance with their powers shall constitute the act of, and serve to bind, the
Trust. In dealing with the Regular Trustees acting on behalf of the Trust, no
Person shall be required to inquire into the authority of the Regular Trustees
to bind the Trust. Persons dealing the Trust are entitled to rely conclusively
on the power and authority of the Regular Trustees as set forth in this
Declaration.
SECTION 2.5. Title to Property of the Trust. Legal title to all
assets of the Trust shall be vested in the Trust.
SECTION 2.6. Powers of the Regular Trustees. The Regular Trustees
shall have the exclusive power and authority to cause the Trust to engage in the
following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more
than one series of Common Securities, and, provided further, there shall be
no interests in the Trust other than the Securities and the issuance of the
Securities shall be limited to a one-time, simultaneous issuance of both
Preferred Securities and Common Securities;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Securities and Exchange Commission
a registration statement on Form S-3 prepared by the Sponsor in
relation to the Preferred Securities, including any amendments thereto
prepared by the Sponsor;
(ii) determine the states in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities
and to take any and all such acts as they deem necessary or advisable
to comply with the applicable laws of any of those states;
(iii) execute and file an application prepared by the Sponsor to
the New York Stock Exchange, Inc. or any other national stock exchange
or the Nasdaq Stock Market's National Market for listing upon notice
of issuance of any Preferred Securities; and
-4-
<PAGE>
(iv) execute and file with the Securities and Exchange
Commission a registration statement on Form 8-A prepared by the
Sponsor relating to the registration of the Preferred Securities under
Section 12(b) of the Exchange Act, including any amendments thereto;
(c) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and provide for reasonable compensation for such services;
(d) to incur expenses which are necessary or incidental to carry out
any of the purposes of this Declaration; and
(e) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
SECTION 2.7. Filing of Certificate of Trust. On or after the date of
execution of this Declaration, the Trustees shall cause the Certificate of Trust
for the Trust in the form attached hereto as Exhibit A to be filed with the
Secretary of State of the State of Delaware.
SECTION 2.8. Duration of Trust. The Trust, absent termination
pursuant to the provisions of Section 5.2, shall have existence for forty-five
years from the date hereof.
ARTICLE III
TRUSTEES
SECTION 3.1. Trustees. The number of Trustees shall initially be
three, and thereafter the number of Trustees shall be such number as shall be
fixed from time to time by a written instrument signed by the Sponsor. The
Sponsor is entitled to appoint or remove without cause any Trustee at any time;
provided, that the number of Trustees shall in no event be less than three; and
provided further that one Trustee, in the case of a natural person, shall be a
person who is a resident of the State of Delaware or which, if not a natural
person, has its principal place of business in the State of Delaware (the
"Delaware Trustee").
Except as expressly set forth in this Declaration, any power of the
Regular Trustees may be exercised by, or with the consent of, a majority of the
Regular Trustees; provided that if there is only one Regular Trustee, all powers
of the Regular Trustees shall be exercised by such one Regular Trustee.
The initial Regular Trustees shall be:
John C. Bukovski
Dennis F. O'Brien
-5-
<PAGE>
The initial Delaware Trustee shall be:
Wilmington Trust Company
SECTION 3.2. Delaware Trustee. Notwithstanding any other provisions
of this Declaration, the Delaware Trustee, in its capacity as Delaware Trustee,
shall not be entitled to exercise any of the powers, nor shall the Delaware
Trustee have any of the duties and responsibilities, of the Regular Trustees
described in this Declaration. The Delaware Trustee shall be a Trustee for the
sole and limited purpose of fulfilling the requirements of Section 3807 of the
Business Trust Act.
SECTION 3.3. Execution of Documents. (a) The Regular Trustees are
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to cause the Trust to execute pursuant to
Section 2.6.
(b) The Regular Trustees may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 their
power for the purposes of signing any documents which the Regular Trustees have
power and authority to cause the Trust to execute pursuant to Section 2.6.
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1. Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Trust or any Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which distributions to
Holders might properly be paid.
SECTION 4.2. Fiduciary Duty. (a) To the extent that, at law or in
equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust
-6-
<PAGE>
or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity, are agreed by
the parties hereto to replace such other duties and liabilities of such
Indemnified Person.
(b) Unless otherwise expressly provide herein:
(i) whenever a conflict or interest exists or arises between an
Indemnified Person and Covered Persons, or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interest and
factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of, or
factors affecting, the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not
be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 4.3. Indemnification. (a) To the fullest extent permitted by
applicable law, the Sponsor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such Indemnified
Person in good faith on behalf of the Trust and in a manner such Indemnified
Person reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of gross negligence or willful misconduct
with respect to such acts or omissions.
-7-
<PAGE>
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Sponsor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Sponsor of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
4.3(a).
SECTION 4.4. Other Businesses. Any Covered Person, the Sponsor and
the Delaware Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor or the Delaware Trustee shall be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor and the
Delaware Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person and the Delaware Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act on any committee or body of
holders of securities or other obligations of the Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1. Amendments. At any time before the issue of any
Securities, this Declaration may be amended by, and only by, a written
instrument executed by a majority of the Regular Trustees and the Sponsor.
SECTION 5.2. Termination of Trust. (a) The Trust shall terminate and
be of no further force or effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the revocation of the
Sponsor's charter or of the Trust's certificate of trust;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor or the Trust; or
(iv) before the issue of any Securities, with the consent of at
least a majority of the Regular Trustees and the Sponsor.
-8-
<PAGE>
(b) As soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3. Governing Law. This Declaration and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws.
SECTION 5.4. Successors and Assigns. Whenever in this Declaration
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Declaration by the Sponsor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether so expressed.
SECTION 5.5. Partial Enforceability. If any provisions of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
SECTION 5.6. Counterparts. This Declaration may contain more than
one counterpart of the signature page and this Declaration may be executed by
the affixing of the signature of each of the Trustees to one of such counterpart
signature pages. All of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
-9-
<PAGE>
IN WITNESS WHEREOF, the undrsigned has caused this Declaration of Trust of
ComEd Financing I to be executed as of the day and year first above written.
TRUSTEES:
John C. Bukovski
------------------------------
John C. Bukovski, as Trustee
Dennis F. O'Brien
----------------------------------------
Dennis F. O'Brien, as Trustee
WILMINGTON TRUST COMPANY, as
Trustee
W. Chris Sponenberg
----------------------------------------
Name: W. Chris Sponenberg
Title: Senior Financial Services Officer
SPONSOR:
COMMONWEALTH EDISON COMPANY, as
Sponsor
John C. Bukovski
----------------------------------------
John C. Bukovski
Vice President
-10-
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
The undersigned, the trustees of ComEd Financing II desiring to form a
business trust pursuant to Delaware Business Trust Act, 12 Del. C. Section 3810,
hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust")
is "ComEd Financing II".
2. The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is as follows:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
3. This Certificate of Trust shall be effective as of the date of
filing.
Dated: November 19, 1996
--------------------------------
John C. Bukovski, as Trustee
--------------------------------
Dennis F. O'Brien, as Trustee
WILMINGTON TRUST COMPANY, as
Trustee
By:
-----------------------------
Name:
Title:
-11-
<PAGE>
Exhibit (4)-7
ComEd Financing II
Form S-4 File No. 333-
=======================================================================
AMENDED AND RESTATED DECLARATION
OF TRUST
ComEd Financing II
Dated as of January 24, 1997
=======================================================================
<PAGE>
TABLE OF CONTENTS
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<TABLE>
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ARTICLE I DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions ................................................................................. 1
SECTION 1.2 Interpretation .............................................................................. 8
ARTICLE II TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application ............................................................ 8
SECTION 2.2 Lists of Holders of Securities .............................................................. 9
SECTION 2.3 Reports by the Property Trustee ............................................................. 9
SECTION 2.4 Periodic Reports to Property Trustee ........................................................ 9
SECTION 2.5 Evidence of Compliance with Conditions Precedent ............................................ 9
SECTION 2.6 Events of Default; Waiver ................................................................... 10
SECTION 2.7 Event of Default; Notice ................................................................... 11
ARTICLE III ORGANIZATION
SECTION 3.1 Name ....................................................................................... 12
SECTION 3.2 Office ..................................................................................... 12
SECTION 3.3 Purpose ................................................................................... 12
SECTION 3.4 Authority .................................................................................. 12
SECTION 3.5 Title to Property of the Trust ............................................................. 13
SECTION 3.6 Powers and Duties of the Administrative Trustees ........................................... 13
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees ....................................... 16
SECTION 3.8 Powers and Duties of the Property Trustee .................................................. 17
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee ................................ 19
SECTION 3.10 Certain Rights of Property Trustee ......................................................... 20
SECTION 3.11 Delaware Trustee ........................................................................... 22
SECTION 3.12 Execution of Documents ..................................................................... 22
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities ..................................... 23
SECTION 3.14 Duration of Trust .......................................................................... 23
SECTION 3.15 Mergers .................................................................................... 23
ARTICLE IV SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities .................................................... 24
SECTION 4.2 Responsibilities of the Sponsor ............................................................ 25
SECTION 4.3 Right to Proceed ........................................................................... 25
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ARTICLE V TRUSTEES
<S> <C> <C>
SECTION 5.1 Number of Trustees: Appointment of Co-Trustee ............................................................... 25
SECTION 5.2 Delaware Trustee ............................................................................................ 26
SECTION 5.3 Property Trustee; Eligibility ............................................................................... 26
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware Trustee Generally ............................ 27
SECTION 5.5 Administrative Trustees ..................................................................................... 27
SECTION 5.6 Delaware Trustee ............................................................................................ 28
SECTION 5.7 Appointment, Removal and Resignation of Trustees ............................................................ 28
SECTION 5.8 Vacancies Among Trustees .................................................................................... 30
SECTION 5.9 Effect of Vacancies ......................................................................................... 30
SECTION 5.10 Meetings ................................................................................................ 30
SECTION 5.11 Delegation of Power ..................................................................................... 30
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business ............................................. 31
ARTICLE VI DISTRIBUTIONS
SECTION 6.1 Distributions ............................................................................................... 31
ARTICLE VII ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities ..................................................................... 31
SECTION 7.2 Execution and Authentication ................................................................................ 32
SECTION 7.3 Form and Dating ............................................................................................. 33
SECTION 7.4 Registrar, Paying Agent and Exchange Agent .................................................................. 34
SECTION 7.5 Paying Agent to Hold Money in Trust ......................................................................... 35
SECTION 7.6 Replacement Securities ...................................................................................... 35
SECTION 7.7 Outstanding Capital Securities .............................................................................. 35
SECTION 7.8 Capital Securities in Treasury .............................................................................. 35
SECTION 7.9 Temporary Securities ........................................................................................ 36
SECTION 7.10 Cancellation ............................................................................................ 36
ARTICLE VIII TERMINATION OF TRUST
SECTION 8.1 Termination of Trust ........................................................................................ 37
ARTICLE IX TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities ...................................................................................... 38
SECTION 9.2 Transfer Procedures and Restrictions ........................................................................ 39
</TABLE>
ii
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SECTION 9.3 Deemed Security Holders ...................................................................................... 46
SECTION 9.4 Book Entry Interests ......................................................................................... 46
SECTION 9.5 Notices to Clearing Agency ................................................................................... 47
SECTION 9.6 Appointment of Successor Clearing Agency ..................................................................... 47
ARTICLE X LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability ................................................................................................. 47
SECTION 10.2 Exculpation ............................................................................................... 48
SECTION 10.3 Fiduciary Duty ............................................................................................ 48
SECTION 10.4 Indemnification ........................................................................................... 49
SECTION 10.5 Outside Businesses ........................................................................................ 52
ARTICLE XI ACCOUNTING
SECTION 11.1 Fiscal Year ............................................................................................... 52
SECTION 11.2 Certain Accounting Matters ................................................................................ 52
SECTION 11.3 Banking ................................................................................................... 53
SECTION 11.4 Withholding ............................................................................................... 53
ARTICLE XII AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments ................................................................................................ 53
SECTION 12.2 Meetings of the Holders; Action by Written Consent ........................................................ 55
ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee ........................................................ 56
ARTICLE XIV REGISTRATION RIGHTS
SECTION 14.1 Registration Rights Agreement ............................................................................. 58
ARTICLE XV MISCELLANEOUS
SECTION 15.1 Notices ................................................................................................... 58
SECTION 15.2 Governing Law ............................................................................................. 59
SECTION 15.3 Intention of the Parties .................................................................................. 59
SECTION 15.4 Headings .................................................................................................. 59
</TABLE>
iii
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<S> <C> <C>
SECTION 15.5 Successors and Assigns ..................................................................................... 59
SECTION 15.6 Partial Enforceability ..................................................................................... 59
SECTION 15.7 Counterparts ............................................................................................... 60
ANNEX I TERMS OF SECURITIES ...................................................................................... I-1
EXHIBIT A-1 FORM OF CAPITAL SECURITY CERTIFICATE ..................................................................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE ...................................................................... A2-1
EXHIBIT B SPECIMEN OF DEBENTURE .................................................................................... B-1
EXHIBIT C PURCHASE AGREEMENT ....................................................................................... C-1
</TABLE>
iv
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
OF
ComEd Financing II
January 24, 1997
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated
and effective as of January 24, 1997, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
W I T N E S S E T H:
WHEREAS, the Trustees and the Sponsor established ComEd Financing II
(the "Trust"), a trust formed under the Business Trust Act (as defined herein)
pursuant to a Declaration of Trust dated as of November 19, 1996 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on November 20, 1996, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer (each as hereinafter defined); and
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions. Capitalized terms used in this Declaration
but not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1. A term defined anywhere in this Declaration has the
same meaning throughout. A term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires. Unless the context
otherwise requires:
<PAGE>
"Administrative Trustee" has the meaning set forth in Section 5.1.
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent, Registrar or Exchange Agent.
"Authorized Officer" of a Person means any other Person that is authorized
to legally bind such former Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate
registered in the name of a Clearing Agency or its nominee, ownership and
transfers of which shall be maintained and made through book entries by a
Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday or a Sunday or a day on
which banking institutions in Wilmington, Delaware or New York, New York are
authorized or required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code Section 3801 et seq.
"Capital Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Capital Securities" means, collectively, the Series A Capital Securities
and the Series B Capital Securities.
"Capital Securities Guarantee" means, collectively, the Series A Capital
Securities Guarantee and the Series B Capital Securities Guarantee.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Capital Securities and in whose name, or in the name of a nominee of that
organization, shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Capital Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom, from time to time, the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
2
<PAGE>
"Closing Time" means the "Closing Time" under the Purchase Agreement.
"Code" means the Internal Revenue Code of 1986.
"Commission" means the United States Securities and Exchange Commission as
from time to time constituted, or if any time after the execution of this
Declaration such Commission is not existing and performing the duties now
assigned to it under applicable Federal securities laws, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in Section 7.1(a).
"Common Securities Guarantee" means the guarantee agreement dated as of
January 24, 1997 of the Sponsor in respect of the Common Securities.
"Company Indemnified Person" means (a) any Administrative Trustee; (b) any
Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates.
"Corporate Trust Office" means the office of the Property Trustee at which
the corporate trust business of the Property Trustee shall, at any particular
time, be principally administered, which office at the date of execution of this
Agreement is located at Wilmington, Delaware.
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Commonwealth Edison Company, an Illinois
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.
"Debenture Trustee" means Wilmington Trust Company, not in its individual
capacity but solely as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Debentures" means, collectively, the Series A Debentures and the Series B
Debentures.
"Default" means an event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Definitive Capital Securities" shall have the meaning set forth in Section
7.3(c).
3
<PAGE>
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direct Action" shall have the meaning set forth in Section 3.8(e).
"Distribution" means a distribution payable to Holders in accordance with
Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) has occurred and is continuing in respect of the
Debentures.
"Exchange Act" means the Securities Exchange Act of 1934.
"Exchange Agent" has the meaning set forth in Section 7.4.
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement (i) by the Trust to exchange Series B Capital
Securities for Series A Capital Securities and (ii) by the Debenture Issuer to
exchange Series B Debentures for Series A Debentures and the Series B Capital
Securities Guarantee for the Series A Capital Securities Guarantee.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Capital Security" has the meaning set forth in Section 7.3(a).
"Holder" means a Person in whose name a Security is registered, such Person
being a beneficial owner within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture dated as of September 1, 1995, among the
Debenture Issuer and the Debenture Trustee, as amended from time to time.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940.
"Legal Action" has the meaning set forth in Section 3.6(g).
4
<PAGE>
"Majority in liquidation amount" means, with respect to the Trust
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holder(s) of outstanding Trust Securities voting together
as a single class or, as the context may require, Holders of outstanding Capital
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all outstanding Securities of
the relevant class.
"Ministerial Action" has the meaning set forth in Annex I hereto.
"Offering Memorandum" has the meaning set forth in Section 3.6(b).
"Officers' Certificate" means, with respect to any Person, a certificate
signed by any two of the Chairman, a Vice Chairman, the Chief Executive Officer,
the President, a Vice President, the Comptroller, the Treasurer, the Secretary,
an Assistant Treasurer or an Assistant Secretary of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" shall mean a written opinion of counsel, who may be an
employee of the Sponsor, and who shall be reasonably acceptable to the Property
Trustee.
"Paying Agent" has the meaning specified in Section 7.4.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
5
<PAGE>
"Property Trustee" has the meaning set forth in Section 5.3(a).
"Property Trustee Account" has the meaning set forth in Section
3.8(c).
"Purchase Agreement" means the Purchase Agreement for the initial offering
and sale of Capital Securities in the form of Exhibit C.
"QIBs" shall mean qualified institutional buyers as defined in Rule 144A.
"Quorum" means a majority of the Administrative Trustees or, if there are
only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of January 24, 1997, by and among the Trust, the Debenture Issuer and
the Initial Purchasers named therein, as amended from time to time.
"Registration Statement" has the meaning set forth in the Registration
Rights Agreement.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, the
chairman of the board of directors, the president, any vice-president, any
assistant vice-president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or assistant trust officer or other
officer of the Property 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 that officer's knowledge of and familiarity with
the particular subject.
"Restricted Definitive Capital Securities" has the meaning set forth in
Section 7.3(c).
"Restricted Capital Security" means a Capital Security required by Section
9.2 to contain a Restricted Securities Legend.
"Restricted Securities Legend" has the meaning set forth in Section 9.2.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
successor rule or regulation.
6
<PAGE>
"Rule 144" means Rule 144 under the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.
"Securities" or "Trust Securities" means the Common Securities and the
Capital Securities.
"Securities Act" means the Securities Act of 1933.
"Securities Guarantees" means the Common Securities Guarantee and the
Capital Securities Guarantee.
"Series A Capital Securities" has the meaning specified in Section 7.1(a).
"Series B Capital Securities" has the meaning specified in Section 7.1(a).
"Series A Capital Securities Guarantee" means the guarantee agreement dated
as of January 24, 1997, by the Sponsor in respect of the Series A Capital
Securities.
"Series B Capital Securities Guarantee" means the guarantee agreement to be
entered in connection with the Exchange Offer by the Sponsor in respect of the
Series B Capital Securities.
"Series A Debentures" means the Series A 8.50% Subordinated Deferrable
Interest Notes due January 15, 2027 of the Debenture Issuer issued pursuant to
the Indenture.
"Series B Debentures" means the Series B 8.50% Subordinated Deferrable
Interest Notes due January 15, 2027 of the Debenture Issuer issued pursuant to
the Indenture.
"Sponsor" means Commonwealth Edison Company, an Illinois corporation, or
any successor entity resulting from any merger, consolidation, amalgamation or
other business combination, in its capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"10% in liquidation amount" means, with respect to the Trust Securities,
except as provided in the terms of the Capital Securities or by the Trust
Indenture Act, Holder(s) of outstanding Trust Securities voting together as a
single class or, as the context may require, Holders of outstanding Capital
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 10% or more of the aggregate
7
<PAGE>
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office
in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and references herein to a Trustee
or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939.
"Unrestricted Global Capital Security" has the meaning set forth in
Section 9.2(b).
SECTION 1.2 Interpretation. Each definition in this Declaration
includes the singular and the plural, and references to the neuter gender
include the masculine and feminine where appropriate. Terms which relate to
accounting matters shall be interpreted in accordance with generally accepted
accounting principles in effect from time to time. References to any statute
mean such statute as amended from time to time and include any successor
legislation. The word "or" is not exclusive, and the words "herein," "hereof"
and "hereunder" refer to this Declaration as a whole. The headings to the
Articles and Sections are for convenience of reference and shall not affect the
meaning or interpretation of this Declaration. References to Articles,
Sections, Annexes and Schedules mean the Articles, Sections, Annexes and
Schedules of this Declaration. The Annexes, if any, and Schedules are hereby
incorporated by reference into and shall be deemed a part of this Declaration.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application. (a) This
Declaration is subject to the provisions of the Trust Indenture Act that are
required to be part of this Declaration and shall, to the extent applicable, be
governed by such provisions.
(a) The Property Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
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(b) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(c) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities. (a) Each of the
Sponsor and the Administrative Trustees on behalf of the Trust shall provide the
Property Trustee, unless the Property Trustee is Registrar for the Securities
(i) within 14 days after each record date for payment of Distributions, a list,
in such form as the Property Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of such record date, provided
that neither the Sponsor nor the Administrative Trustees on behalf of the Trust
shall be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Property Trustee by the Sponsor and the Administrative Trustees on behalf of the
Trust, and (ii) at any other time, within 30 days of receipt by the Trust of a
written request for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Property Trustee. The Property Trustee
shall preserve, in as current a form as is reasonably practicable, all infor
mation contained in Lists of Holders given to it or which it receives in the
capacity as Paying Agent (if acting in such capacity), provided that the
Property Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee. Within 60 days after
December 15 of each year, commencing December 15, 1997, the Property Trustee
shall provide to the Holders of the Capital Securities such reports as are
required by section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by section 313 of the Trust Indenture Act. The Property
Trustee shall also comply with the requirements of section 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee. Each of the
Sponsor and the Administrative Trustees on behalf of the Trust shall provide to
the Property Trustee such documents, reports and information as are required by
section 314 (if any) and the compliance certificate required by section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
section 314(a)(4) of the Trust Indenture Act, such compliance certificate to be
delivered annually on or before 120 days after the end of each fiscal year of
the Sponsor.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent provided for in this Declaration that relate to any of the matters set
forth in section 314(c) of the Trust Indenture Act. Any certificate or
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opinion required to be given by an officer pursuant to section 314(c)(1) of the
Trust Indenture Act may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver. (a) The Holders of a
Majority in liquidation amount of Capital Securities may, by vote, on behalf of
the Holders of all of the Capital Securities, waive any past Event of Default in
respect of the Capital Securities and its consequences, provided that, if the
underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
aggregate principal amount of the holders of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least the
proportion in aggregate liquidation amount of the Capital Securities that
the relevant Super Majority represents of the aggregate principal amount of
the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of section
316(a)(1)(B) of the Trust Indenture Act and such section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Capital Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Capital
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Capital Securities of an Event of Default with respect to the Capital
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities.
The Holders of a Majority in liquidation amount of the Capital
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee or to
direct the exercise of any trust or power conferred upon the Property Trustee,
including the right to direct the Property Trustee to exercise the remedies
available to it as holder of the Debentures; provided, however, that (subject to
the provisions of Section 3.9) the Property Trustee shall have the right to
decline to follow any such direction if the Property Trustee shall determine
that the action so directed would be unjustly prejudicial to the Holders not
taking part in such direction or if the Property Trustee, being advised by
counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Property Trustee, in good faith, by its board of directors or
trustees, executive committee, or a trust committee of directors or trustees
and/or Responsible Officers, shall determine that the action or proceedings so
directed would involve the Property Trustee in personal liability.
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(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in aggregate
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences if all Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Capital Securities and only the Holders of the Capital Securities will have
the right to direct the Property Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of
sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or Event of Default with respect
to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of the Capital Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu
of section 316(a)(1)(B) of the Trust Indenture Act and such section 316(a)(1)(B)
of the Trust Indenture Act is hereby expressly excluded from this Declaration
and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice. (a) The Property Trustee
shall, within 90 days after the occurrence of an Event of Default, transmit by
mail, first class postage prepaid, to the Holders notices of all defaults with
respect to the Securities actually known to a Responsible Officer
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of the Property Trustee, unless such defaults have been cured before the giving
of such notice (the term "defaults," for the purposes of this Section 2.7(a),
being hereby defined to be an Event of Default as defined in the Indenture, not
including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein); provided that, except for a default in
the payment of principal of (or premium, if any) or interest on any of the
Debentures, the Property Trustee shall be protected in withholding such notice
if and so long as a Responsible Officer of the Property Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 6.01(a)(1) and 6.02(a)(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall have received
written notice or of which a Responsible Officer of the Property Trustee
charged with the administration of the Declaration shall have actual
knowledge.
(c) Within five Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit notice of such Event of Default to the holders of the Capital
Securities, the Administrative Trustees and the Sponsor, unless such Event of
Default shall have been cured or waived. The Sponsor and the Administrative
Trustees shall file annually with the Property Trustee a certification as to
whether or not they are in compliance with all the conditions and covenants
applicable to them under this Declaration.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name. The Trust is named "ComEd Financing II" as such
name may be modified from time to time by the Administrative Trustees following
written notice to the Holders of Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Administrative Trustees.
SECTION 3.2 Office. The address of the principal office of the
Trust is c/o Commonwealth Edison Company, 10 South Dearborn Street, 37th floor,
Chicago, Illinois 60603. On ten Business Days written notice to the Holders of
Securities, the Administrative Trustees may designate another principal office.
SECTION 3.3 Purpose. The exclusive purposes and functions of the
Trust are (a) to issue and sell Securities, (b) use the proceeds from the sale
of the Securities to acquire the Debentures, and (c) except as otherwise
limited herein, to engage in only those other activities necessary, advisable or
incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds
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derived from investments, mortgage or pledge any of its assets, or otherwise
undertake (or permit to be undertaken) any activity that would cause the Trust
not to be classified for United States federal income tax purposes as a grantor
trust.
SECTION 3.4 Authority. Subject to the limitations provided in this
Declaration and to the specific duties of the Property Trustee, the
Administrative Trustees shall have exclusive and complete authority to carry out
the purposes of the Trust. An action taken by the Administrative Trustees in
accordance with their powers shall constitute the act of and serve to bind the
Trust, and an action taken by the Property Trustee on behalf of the Trust in
accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration.
SECTION 3.5 Title to Property of the Trust. Except as provided in
Section 3.8 with respect to the Debentures and the Property Trustee Account or
as otherwise provided in this Declaration, legal title to all assets of the
Trust shall be vested in the Trust. The Holders shall not have legal title to
any part of the assets of the Trust, but shall have an undivided beneficial
interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Administrative Trustees. The
Administrative Trustees shall have the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that except, in the case of (i) and (ii),
as contemplated in Section 7.1(a), (i) the Trust may issue no more than one
series of Capital Securities and no more than one series of Common
Securities, (ii) there shall be no interests in the Trust other than the
Securities, and (iii) the issuance of Securities shall be limited to a
simultaneous issuance of both Capital Securities and Common Securities at
the Closing Time,
(b) in connection with the issue and sale of the Capital Securities
and the consummation of the Exchange Offer, at the direction of the
Sponsor, to:
(i) prepare and execute, if necessary, an offering memorandum
(the "Offering Memorandum") in preliminary and final form prepared by
the Sponsor, in relation to the offering and sale of Series A Capital
Securities to qualified institutional buyers in reliance on Rule 144A
under the Securities Act and to institutional "accredited investors"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act), and to execute and file with the Commission, at such time as
determined by the Sponsor, any Registration Statement, including any
amendments thereto, as contemplated by the Registration Rights
Agreement;
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(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary, in order
to qualify or register all or part of the Capital Securities in any
state in which the Sponsor has determined to qualify or register such
Capital Securities for sale;
(iii) at the direction of the Sponsor, execute and file an
application, prepared by the Sponsor, to the New York Stock Exchange
or any other national stock exchange or the Nasdaq Stock Market's
National Market for listing or quotation of the Capital Securities;
(iv) to execute and deliver letters, documents, or instruments
with DTC and other Clearing Agencies relating to the Capital
Securities;
(v) if required, execute and file with the Commission a
registration statement on Form 8-A, including any amendments thereto,
prepared by the Sponsor, relating to the registration of the Capital
Securities under Section 12(b) of the Exchange Act; and
(vi) execute and enter into the Purchase Agreement and the
Registration Rights Agreement providing for the sale of the Capital
Securities;
(c) to acquire the Series A Debentures with the proceeds of the sale
of the Series A Capital Securities and the Common Securities and to
exchange the Series A Debentures for a like principal amount of Series B
Debentures, pursuant to the Exchange Offer; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be
held of record in the name of the Property Trustee for the benefit of the
Holders;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Tax Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of section 316(c) of the Trust Indenture
Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Capital Securities and Holders of Common
Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Administrative Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property
Trustee has the exclusive power to bring such Legal Action;
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(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be
executed by any Administrative Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar and
Exchange Agent for the Securities or to appoint a Paying Agent for the
Securities as provided in Section 7.4 except for such time as such power to
appoint a Paying Agent is vested in the Property Trustee;
(m) to give prompt written notice to the Property Trustee and to
Holders of any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the interest
payment period under the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Capital Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
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(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes;
(q) to take all action necessary to consummate the Exchange Offer or
otherwise cause the Capital Securities to be registered pursuant to an
effective Registration Statement in accordance with the provisions of the
Registration Rights Agreement; and
(r) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Administrative Trustees, on
behalf of the Trust.
The Administrative Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Administrative Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.
Any expenses incurred by the Administrative Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property Trustee)
shall not, engage in any activity other than as required or authorized by this
Declaration. The Trust shall not:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders pursuant
to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
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(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of conducting any proceeding with respect
to any remedy available to the Debenture Trustee, or exercising any trust
or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration that
the principal of all the Debentures shall be due and payable, or (D)
consent to any amendment, modification or termination of the Indenture or
the Debentures where such consent shall be required unless the Trust shall
have received an opinion of a nationally recognized independent tax counsel
experienced in such matters to the effect that such modification will not
cause more than an insubstantial risk that for United States federal income
tax purposes the Trust will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee. (a) The legal
title to the Debentures shall be owned by and held of record in the name of the
Property Trustee in trust for the benefit of the Holders. The right, title and
interest of the Property Trustee to the Debentures shall vest automatically in
each Person who may hereafter be appointed as Property Trustee in accordance
with Section 5.7. Such vesting and cessation of title shall be effective whether
or not conveyancing documents with regard to the Debentures have been executed
and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the
Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and
under the exclusive control of the Property Trustee on behalf of the
Holders and, upon the receipt of payments of funds made in respect of
the Debentures held by the Property Trustee, deposit such funds into
the Property Trustee Account and make payments to the Holders of the
Capital Securities and Holders of the Common Securities from the
Property Trustee Account in accordance with Section 6.1. Funds in the
Property Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee Account shall
be an account that is maintained with a banking institution the rating
on whose long-term unsecured indebtedness is at least equal to the
rating assigned to the Capital Securities by a "nationally recognized
statistical rating organization", as that term is defined for purposes
of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Capital
Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and
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(iii) upon written notice of distribution issued by the
Administrative Trustees in accordance with the terms of the
Securities, engage in such ministerial activities as shall be
necessary or appropriate to effect the distribution of the Debentures
to Holders of Securities upon the occurrence of certain events.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities.
(e) Subject to Section 3.9(a), the Property Trustee shall take any
Legal Action which arises out of or in connection with an Event of Default
of which a Responsible Officer of the Property Trustee has actual knowledge
or the Property Trustee's duties and obligations under this Declaration or
the Trust Indenture Act and if such Property Trustee shall have failed to
take such Legal Action, the Holders of the Capital Securities may take such
Legal Action, to the same extent as if such Holders of Capital Securities
held an aggregate principal amount of Debentures equal to the aggregate
liquidation amount of such Capital Securities, without first proceeding
against the Property Trustee or the Trust; provided however, that if an
Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay the principal of
or premium, if any, or interest on the Debentures on the date such
principal, premium, if any, or interest is otherwise payable (or, in the
case of redemption, on the redemption date), then a Holder of Capital
Securities may directly institute a proceeding for enforcement of payment
to such Holder of the principal of or premium, if any, or interest on the
Debentures having a principal amount equal to the aggregate liquidation
amount of the Capital Securities of such Holder (a "Direct Action") on or
after the respective due date specified in the Debentures. In connection
with such Direct Action, the rights of the Holders of the Common Securities
will be subrogated to the rights of such Holder of Capital Securities to
the extent of any payment made by the Debenture Issuer to such Holder of
Capital Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Capital Securities will not be able to
exercise directly any other remedy available to the holders of the
Debentures.
(f) The Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders pursuant to the terms of
the Securities; or
(ii) a successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.7 (a "Successor
Property Trustee").
(g) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible
Officer of the Property Trustee occurs and is continuing, the Property
Trustee shall, for the benefit of Holders, enforce its rights as holder of
the Debentures subject to the rights of the Holders pursuant to the terms
of such Securities.
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(h) The Property Trustee shall be authorized to undertake any actions
set forth in section 317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent, the
Property Trustee may authorize one or more Persons to act as additional
Paying Agents and to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all securities and any such
Paying Agent shall comply with section 317(b) of the Trust Indenture Act.
Any such additional Paying Agent may be removed by the Property Trustee at
any time the Property Trustee remains as Paying Agent and a successor
Paying Agent or additional Paying Agents may be (but are not required to
be) appointed at any time by the Property Trustee while the Property
Trustee is so acting as Paying Agent.
(j) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or authority of the Administrative
Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee. (a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and in the Securities and no implied covenants shall be read
into this Declaration against the Property Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6) of
which a Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Declaration, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this
Declaration and in the Securities and the Property Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration and
in the Securities, and no implied covenants or obligations shall
be read into this Declaration or the Securities against the
Property Trustee; and
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(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely, as
to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Property Trustee and conforming to the
requirements of this Declaration; provided, however, that in the
case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Property
Trustee, the Property Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Capital Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Declaration or indemnity reasonably satisfactory to the Property
Trustee against such risk or liability is not reasonably assured to
it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Property Trustee Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for
its own account, subject to the protections and limitations on
liability afforded to the Property Trustee under this Declaration and
the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of
the Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in
writing with the Sponsor. Money held by the Property Trustee need not
be segregated from other funds held by it except in relation to the
Property Trustee Account maintained by the Property Trustee pursuant
to Section 3.8(c)(i) and except to the extent otherwise required by
law; and
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(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Sponsor with their respective duties under this Declaration, nor
shall the Property Trustee be liable for any default or misconduct of
the Administrative Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee. (a) Subject to
the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) any direction or act of the Sponsor or the Administrative
Trustees contemplated by this Declaration may be sufficiently
evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the
Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion; such counsel may be counsel to the Sponsor or any
of its Affiliates, and may include any of its employees; and the
Property Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holder, unless such Holder shall
have provided to the Property Trustee security and indemnity,
reasonably satisfactory to the Property Trustee, against the costs,
expenses (including reasonable attorneys' fees and expenses and the
expenses of the Property Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such
request or di-
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rection, including such reasonable advances as may be requested by the
Property Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents, custodians, nominees or attorneys and the Property
Trustee shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by it
hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and
the signature of the Property Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Property
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (i) may request instructions from the
Holders which instructions may only be given by the Holders of the
same proportion in liquidation amount of the Securities as would be
entitled to direct the Property Trustee under the terms of the
Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be
protected in conclusively relying on or acting in or accordance with
such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration; and
(xii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith, without
negligence, and reasonably believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this
Declaration.
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(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it,
in any jurisdiction in which it shall be illegal, or in which the Property
Trustee shall be unqualified or incompetent in accordance with applicable
law, to perform any such act or acts, or to exercise any such right, power,
duty or obligation. No permissive power or authority available to the
Property Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee. Notwithstanding any other provision of
this Declaration other than Section 5.2, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Administrative Trustees or the Property
Trustee described in this Declaration. Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of section 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents. Unless otherwise determined by
the Administrative Trustees, and except as otherwise required by the Business
Trust Act or applicable law, each Administrative Trustee is authorized to
execute on behalf of the Trust any documents that the Administrative Trustees
have the power and authority to execute pursuant to Section 3.6; provided that,
the Registration Statement referred to in Section 3.6(b)(i), including any
amendments thereto, shall be signed by a majority of the Administrative
Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be taken as
the statements of the Sponsor, and the Trustees do not assume any responsibility
for their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration or the
Securities.
SECTION 3.14 Duration of Trust. The Trust, unless terminated pursuant
to the provisions of Article VIII hereof, shall have existence up to December
31, 2030.
SECTION 3.15 Mergers. (a) The Trust may not merge with or into,
consolidate, amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, except as
described in Section 3.15(b) and (c).
(b) The Trust may, at the request of the Sponsor, with the consent of
the Administrative Trustees or, if there are more than two, a majority of
the Administrative Trustees and without the consent of the Holders, the
Delaware Trustee or the Property Trustee, merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties
and assets as an entirety or substantially as an entirety to, a trust
organized as such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity") either:
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(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same as
the Securities rank with respect to Distributions and payments
upon liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor
Entity that possesses the same powers and duties as the Property
Trustee as the Holder of the Debentures;
(iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any
national securities exchange or with another organization on which
the Capital Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital Securities
(including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders (including any Successor
Securities) in any material respect (other than with respect to any
dilution of such Holders' interests in the new entity);
(vi) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Sponsor has received
an opinion of an independent counsel to the Trust experienced in such
matters to the effect that:
(A) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the Holders
(including the holders of any Successor Securities) in any
material respect (other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor
the Successor Entity will be required to register as an
Investment Company; and
(viii) the Sponsor or any permitted successor or assignee owns
all of the common securities of such Successor Entity and guarantees
the obligations of such Successor Entity
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under the Successor Securities at least to the extent provided by the
Capital Securities Guarantee and the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially
as an entirety to, any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease would cause the Trust or the Successor Entity not to be classified as
a grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities. At the Closing
Time, the Sponsor will purchase all of the Common Securities then issued by the
Trust, in an amount at least equal to 3% of the capital of the Trust, at the
same time as the Series A Capital Securities are issued and sold.
SECTION 4.2 Responsibilities of the Sponsor. In connection with the
issue and sale of the Capital Securities, the Sponsor shall have the exclusive
right and responsibility to engage in the following activities:
(a) to prepare the Offering Memorandum and to prepare for filing by
the Trust with the Commission any Registration Statement, including any
amendments thereto as contemplated by the Registration Rights Agreement;
(b) to determine the states in which to take appropriate action to
qualify or register for sale all or part of the Capital Securities and to
do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) if deemed necessary or advisable by the Sponsor, to prepare for
filing by the Trust an application to the New York Stock Exchange or any
other national stock exchange or the Nasdaq Stock Market's National Market
for listing or quotation of the Capital Securities;
(d) if required, to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A relating to the
registration of the Capital Securities under Section 12(b) of the Exchange
Act, including any amendments thereto; and
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(e) to negotiate the terms of the Purchase Agreement and the
Registration Rights Agreement providing for the sale of the Capital
Securities.
SECTION 4.3 Right to Proceed. The Sponsor acknowledges the rights of
the Holders of Capital Securities, in the event that a failure of the Trust to
pay Distributions on the Capital Securities is attributable to the failure of
the Debenture Issuer to pay interest or principal on the Debentures, to
institute a proceeding directly against the Debenture Issuer for enforcement of
its payment obligations on the Debentures.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees: Appointment of Co-Trustee. The number
of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities;
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (i) one Trustee, in the case of a natural person,
shall be a person who is a resident of the State of Delaware or, if not a
natural person, shall be an entity which has its principal place of business in
the State of Delaware (the "Delaware Trustee"); (ii) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the Sponsor (an
"Administrative Trustee"); and (iii) one Trustee shall be the Property Trustee
for so long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements. Notwithstanding the above, unless an Event of
Default shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust's property may at the time be
located, the Holders of a Majority in liquidation amount of the Common
Securities acting as a class at a meeting of the Holders of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any part of the Trust's property, or to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of this Declaration. In case an Event of Default has
occurred and is continuing, the Property Trustee alone shall have power to make
any such appointment of a co-trustee.
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SECTION 5.2 Delaware Trustee. If required by the Business Trust
Act, one Trustee (the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 5.3 Property Trustee; Eligibility. (a) There shall at all
times be one Trustee (the "Property Trustee") which shall act as Property
Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any state or territory thereof or of the
District of Columbia, or a cor poration or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least fifty million U.S. dollars
($50,000,000), and subject to supervision or examination by federal, state,
territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), the combined capital and
surplus of such corpora tion shall be deemed to be its combined capital and
surplus as set forth in its most recent re port of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of section 310(b) of the Trust Indenture
Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
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Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
SECTION 5.4 Certain Qualifications of Administrative Trustees and
Delaware Trustee Generally. Each Administrative Trustee and the Delaware
Trustee (unless the Property Trustee also acts as Delaware Trustee) shall be
either a natural person who is at least 21 years of age or a legal entity that
shall act through one or more Authorized Officers.
SECTION 5.5 Administrative Trustees. The initial Administrative
Trustees shall be:
John C. Bukovski
10 South Dearborn Street -- 37th Floor
Chicago, Illinois 60603
Dennis F. O'Brien
10 South Dearborn Street -- 37th Floor
Chicago, Illinois 60603
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Administrative Trustees is called with respect to any matter over
which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
(b) Unless otherwise determined by the Administrative Trustees, and
except as otherwise required by the Business Trust Act or applicable law, any
Administrative Trustee is authorized to execute on behalf of the Trust any
documents which the Administrative Trustees have the power and authority to
cause the Trust to execute pursuant to Section 3.6, provided, that, the
Registration Statement referred to in Section 3.6, including any amendments
thereto, shall be signed by a majority of the Administrative Trustees.
(c) An Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.6.
SECTION 5.6 Delaware Trustee. The initial Delaware Trustee shall
be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
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SECTION 5.7 Appointment, Removal and Resignation of Trustees. (a)
Subject to Section 5.7(b) of this Declaration and to Section 6(b) of Annex I
hereto, Trustees may be appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor;
(ii) unless an Event of Default shall have occurred and be continuing
after the issuance of any Securities, by vote of the Holders of a Majority
in liquidation amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities; and
(iii) if an Event of Default shall have occurred and be continuing
after the issuance of the Securities, with respect to the Property Trustee
or the Delaware Trustee, by vote of the Holders of a Majority in
liquidation amount of the Capital Securities voting as a class at a meeting
of the Holders of the Capital Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.7(a) until a Successor Property Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Property Trustee and delivered to the Trust, the Sponsor and
the resigning Property Trustee; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 5.7(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Trust, the Sponsor and the resigning Delaware
Trustee.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and has
accepted such appointment by written instrument executed by such
Successor Property Trustee and delivered to the Trust, the Sponsor and
the resigning Property Trustee; or
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(B) until the assets of the Trust have been completely liquidated
and the proceeds thereof distributed to the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by written instrument executed
by such Successor Delaware Trustee and delivered to the Trust, the Sponsor
and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Property Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.7 within 60 days after delivery of an instrument of resignation or removal,
the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
SECTION 5.8 Vacancies Among Trustees. If a Trustee ceases to hold
office for any reason and the number of Trustees is not reduced pursuant to
Section 5.1, or if the number of Trustees is increased pursuant to Section
5.1, a vacancy shall occur. A resolution certifying the existence of such
vacancy by the Administrative Trustees or, if there are more than two, a
majority of the Administrative Trustees, shall be conclusive evidence of the
existence of such vacancy. The vacancy shall be filled with a Trustee appointed
in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee shall not operate to dissolve,
terminate or annul the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 5.7, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration.
SECTION 5.10 Meetings. If there is more than one Administrative
Trustee, meetings of the Administrative Trustees shall be held from time to time
upon the call of any Administrative Trustee. Regular meetings of the
Administrative Trustees may be held at a time and
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place fixed by resolution of the Administrative Trustees. Notice of any in-
person meetings of the Administrative Trustees shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before such meeting. Notice of any
telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
by the unanimous written consent of the Administrative Trustees. In the event
there is only one Administrative Trustee, any and all action of such
Administrative Trustee shall be evidenced by a written consent of such
Administrative Trustee.
SECTION 5.11 Delegation of Power. (a) Any Administrative Trustee
may, by power of attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the purpose of executing
any documents contemplated in Section 3.6, including any Registration Statement
or amendment thereto filed with the Commission, or making any other governmental
filing.
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Administrative Trustees or otherwise as the Administrative
Trustees may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
SECTION 5.12 Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Property Trustee or the Delaware
Trustee or any Administrative Trustee that is not a natural person, as the case
may be, may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Property Trustee or the Delaware Trustee, as the case may be, shall be a party,
or any corporation succeeding to all or substantially all the corporate trust
business of the Property Trustee or the Delaware Trustee, as the case may be,
shall be the successor of the Property Trustee or the Delaware Trustee, as the
case may be, hereunder, provided such corporation shall be otherwise qualified
and eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto.
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ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions. Holders shall receive Distributions in
accordance with the applicable terms of the relevant Holder's Securities. If
and to the extent that the Debenture Issuer makes a payment of interest
(including Compounded Interest (as defined in the Indenture) and Additional
Interest (as defined in the Indenture)), premium and/or principal on the
Debentures held by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property Trustee shall and is directed, to the extent
funds are available for that purpose, to make a distribution (a "Distribution")
of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities. (a) The
Administrative Trustees shall on behalf of the Trust issue one class of capital
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Annex I (the "Series A Capital
Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Common Securities"). The Administrative Trustees shall
on behalf of the Trust issue one class of capital securities representing
undivided beneficial interests in the Trust having such terms as are set forth
in Annex I (the "Series B Capital Securities") in exchange for Series A Capital
Securities accepted for exchange in the Exchange Offer, which Series B Capital
Securities shall not bear the legends required by Section 9.2(i) unless the
Holder of such Series A Capital Securities is either (A) a broker-dealer who
purchased such Series A Capital Securities directly from the Trust for resale
pursuant to Rule 144A or any other available exemption under the Securities Act,
(B) a Person participating in the distribution of the Series A Capital
Securities or (C) a Person who is an affiliate (as defined in Rule 144A) of the
Trust. The Trust shall issue no securities or other interests in the assets of
the Trust other than the Securities.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable undivided beneficial interests in the assets of the Trust.
(d) Every Person, by virtue of having become a Holder or a Capital
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and
shall be bound by, this Declaration.
SECTION 7.2 Execution and Authentication. (a) The Securities
shall be signed on behalf of the Trust by an Administrative Trustee. In case
any Administrative Trustee of the Trust who shall have signed any of the
Securities shall cease to be such Administrative Trustee before the
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Securities so signed shall be delivered by the Trust, such Securities
nevertheless may be delivered as though the person who signed such Securities
had not ceased to be such Administrative Trustee; and any Securities may be
signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Administrative Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such an Administrative Trustee.
(b) One Administrative Trustee shall sign the Capital Securities for
the Trust by manual or facsimile signature. Unless otherwise determined by the
Trust, such signature shall, in the case of Common Securities, be a manual
signature.
A Capital Security shall not be valid until authenticated by the
manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Capital Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Capital Securities for
original issue. The aggregate number of Capital Securities outstanding at any
time shall not exceed the number set forth in the terms in Annex I hereto except
as provided in Section 7.6.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Capital Securities. An authenticating agent may
authenticate Capital Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as
the Property Trustee to deal with the Sponsor or an Affiliate.
SECTION 7.3 Form and Dating. The Capital Securities and the
Property Trustee's certificate of authentication shall be substantially in the
form of Exhibit A-1 and the Common Securities shall be substantially in the form
of Exhibit A-2, each of which is hereby incorporated in and expressly made a
part of this Declaration. Certificates representing the Securities may be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by their
execution thereof. The Securities may have letters, CUSIP or other numbers,
notations or other marks of identification or designation and such legends or
endorsements required by law, stock exchange rule, agreements to which the Trust
is subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Trust). The Trust at the direction
of the Sponsor shall furnish any such legend not contained in Exhibit A-1 to the
Property Trustee in writing. Each Capital Security shall be dated the date of
its authentication. The terms and provisions of the Securities set forth in
Annex I and the forms of Securities set forth in Exhibits A-1 and A-2 are part
of the terms of this Declaration and to the extent applicable, the Property
Trustee and the Sponsor, by their execution and delivery of this Declaration,
expressly agree to such terms and provisions and to be bound thereby.
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(a) Global Securities. Securities offered and sold to QIBs in
reliance on Rule 144A, as provided in the Purchase Agreement, shall be issued in
the form of one or more permanent global Securities in definitive, fully
registered form without distribution coupons with the global legend and
Restricted Securities Legend set forth in Exhibit A-1 hereto (a "Global Capital
Security"), which shall be deposited on behalf of the purchasers of the Capital
Securities represented thereby with the Property Trustee, at its Wilmington,
Delaware office, as custodian for the Clearing Agency, and registered in the
name of the Clearing Agency or a nominee of the Clearing Agency, duly executed
by the Trust and authenticated by the Property Trustee as hereinafter provided.
The number of Capital Securities represented by the Global Capital Security may
from time to time be increased or decreased by adjustments made on the records
of the Property Trustee and the Clearing Agency or its nominee as hereinafter
provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply only to
the Global Capital Security and such other Capital Securities in global form as
may be authorized by the Trust to be deposited with or on behalf of the Clearing
Agency.
The Trust shall execute and the Property Trustee shall, in accordance
with this Section 7.3, authenticate and make available for delivery initially
one or more Global Capital Securities that (i) shall be registered in the name
of Cede & Co. or other nominee of such Clearing Agency and (ii) shall be
delivered by the Trustee to such Clearing Agency or pursuant to such Clearing
Agency's written instructions or held by the Property Trustee as custodian for
the Clearing Agency.
Members of, or participants in, the Clearing Agency ("Participants")
shall have no rights under this Declaration with respect to any Global Capital
Security held on their behalf by the Clearing Agency or by the Property Trustee
as the custodian of the Clearing Agency or under such Global Capital Security,
and the Clearing Agency may be treated by the Trust, the Property Trustee and
any agent of the Trust or the Property Trustee as the absolute owner of such
Global Capital Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Trust, the Property Trustee or any
agent of the Trust or the Property Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Clearing Agency or
impair, as between the Clearing Agency and its Participants, the operation of
customary practices of such Clearing Agency governing the exercise of the rights
of a holder of a beneficial interest in any Global Capital Security.
(c) Definitive Capital Securities. Except as provided in Section 7.9,
owners of beneficial interests in a Global Capital Security will not be entitled
to receive physical delivery of certificated Capital Securities ("Definitive
Capital Securities"). Purchasers of Securities who are "accredited investors"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) will
receive Capital Securities in the form of individual certificates in definitive,
fully registered form without distribution coupons and with the Restricted
Securities Legend set forth in Exhibit A-1 hereto ("Restricted Definitive
Capital Securities"); provided, however, that upon transfer of such Restricted
Definitive Capital Securities to a QIB, such Restricted Definitive Capital
Securities will,
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unless the Global Capital Security has previously been exchanged, be exchanged
for an interest in a Global Capital Security pursuant to the provisions of
Section 9.2. Restricted Definitive Capital Securities will bear the Restricted
Securities Legend set forth on Exhibit A-1 unless removed in accordance with
this Section 7.3 or Section 9.2.
(d) Authorized Denominations. The Capital Securities are issuable
only in denominations of $1,000 and any integral multiple thereof.
SECTION 7.4 Registrar, Paying Agent and Exchange Agent. The Trust
shall maintain in the Borough of Manhattan, The City of New York, (i) an office
or agency where Capital Securities may be presented for registration of transfer
("Registrar"), (ii) an office or agency where Capital Securities may be
presented for payment ("Paying Agent") and (iii) an office or agency where
Securities may be presented for exchange ("Exchange Agent"). The Registrar
shall keep a register of the Capital Securities and of their transfer. The
Trust may appoint the Registrar, the Paying Agent and the Exchange Agent and may
appoint one or more co-registrars, one or more additional paying agents and
one or more additional exchange agents in such other locations as it shall
determine. The term "Registrar" includes any additional registrar, "Paying
Agent" includes any additional paying agent and the term "Exchange Agent"
includes any additional exchange agent. The Trust may change any Paying Agent,
Registrar, co-registrar or Exchange Agent without prior notice to any Holder.
The Paying Agent shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Administrative Trustees. The Trust shall notify the
Property Trustee of the name and address of any Agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as
Registrar, Paying Agent or Exchange Agent, the Property Trustee shall act as
such. The Trust or any of its Affiliates may act as Paying Agent, Registrar or
Exchange Agent. The Trust shall act as Paying Agent, Registrar, co-registrar
and Exchange Agent for the Common Securities.
The Trust initially appoints the Property Trustee as Registrar, Paying
Agent, and Exchange Agent for the Capital Securities.
SECTION 7.5 Paying Agent to Hold Money in Trust. The Trust shall
require each Paying Agent other than the Property Trustee to agree in writing
that the Paying Agent will hold in trust for the benefit of Holders or the
Property Trustee all money held by the Paying Agent for the payment of
liquidation amounts or Distributions on the Securities, and will notify the
Property Trustee if there are insufficient funds for such purpose. While any
such insufficiency continues, the Property Trustee may require a Paying Agent to
pay all money held by it to the Property Trustee. The Trust at any time may
require a Paying Agent to pay all money held by it to the Property Trustee and
to account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust)
shall have no further liability for the money. If the Trust or the Sponsor or
an Affiliate of the Trust or the Sponsor acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent.
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SECTION 7.6 Replacement Securities. If a Holder claims that a
Security owned by it has been lost, destroyed or wrongfully taken or if such
Security is mutilated and is surrendered to the Trust or, in the case of the
Capital Securities, to the Property Trustee, the Trust shall issue and the
Property Trustee shall authenticate a replacement Security if the Property
Trustee's and the Trust's requirements, as the case may be, are met. An
indemnity bond must be provided by the Holder which, in the judgment of the
Property Trustee, is sufficient to protect the Trustees, the Sponsor or any
authenticating agent from any loss which any of them may suffer if a Security is
replaced. The Trust may charge such Holder for its expenses in replacing a
Security.
Every replacement Security is an additional beneficial interest in the
Trust.
SECTION 7.7 Outstanding Capital Securities. The Capital Securities
outstanding at any time are all the Capital Securities authenticated by the
Property Trustee except for those cancelled by it, those delivered to it for
cancellation, and those described in this Section as not outstanding.
If a Capital Security is replaced, paid or purchased pursuant to
Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased Capital
Security is held by a bona fide purchaser.
If Capital Securities are considered paid in accordance with the terms
of this Declaration, they cease to be outstanding and Distributions on them
shall cease to accumulate.
A Capital Security does not cease to be outstanding because one of the
Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.
SECTION 7.8 Capital Securities in Treasury. In determining whether
the Holders of the required amount of Securities have concurred in any
direction, waiver or consent, Capital Securities owned by the Trust, the Sponsor
or an Affiliate of the Sponsor, as the case may be, shall be disregarded and
deemed not to be outstanding, except that for the purposes of determining
whether the Property Trustee shall be fully protected in relying on any such
direction, waiver or consent, only Securities which the Property Trustee
actually knows are so owned shall be so disregarded.
SECTION 7.9 Temporary Securities. (a) Until Definitive Securities
are ready for delivery, the Trust may prepare and, in the case of the Capital
Securities, the Property Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of Definitive Securities
but may have variations that the Trust considers appropriate for temporary
Securities. Without unreasonable delay, the Trust shall prepare and, in the
case of the Capital Securities, the Property Trustee shall authenticate
Definitive Securities in exchange for temporary Securities.
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(b) A Global Capital Security deposited with the Clearing Agency or
with the Property Trustee as custodian for the Clearing Agency pursuant to
Section 7.3 shall be transferred to the beneficial owners thereof in the form of
certificated Capital Securities only if such transfer complies with Section 9.2
and (i) the Clearing Agency notifies the Company that it is unwilling or unable
to continue as Clearing Agency for such Global Capital Security or if at any
time such Clearing Agency ceases to be a "clearing agency" registered under the
Exchange Act and a clearing agency is not appointed by the Sponsor or the
Administrative Trustees within 90 days of such notice, (ii) a Default or an
Event of Default has occurred and is continuing or (iii) the Trust at its sole
discretion elects to cause the issuance of certificated Capital Securities.
(c) Any Global Capital Security that is transferable to the beneficial
owners thereof in the form of certificated Capital Securities pursuant to this
Section 7.9 shall be surrendered by the Clearing Agency to the Property Trustee
to be so transferred, in whole or from time to time in part, without charge, and
the Property Trustee shall authenticate and make available for delivery, upon
such transfer of each portion of such Global Capital Security, an equal
aggregate liquidation amount of Securities of authorized denominations in the
form of certificated Capital Securities. Any portion of a Global Capital
Security transferred pursuant to this Section shall be registered in such names
as the Clearing Agency shall direct. Any Capital Security in the form of
certificated Capital Securities delivered in exchange for an interest in the
Restricted Global Capital Security shall, except as otherwise provided by
Sections 7.3 and 9.1, bear the Restricted Securities Legend set forth in Exhibit
A-1 hereto.
(d) Subject to the provisions of Section 7.9(c), the Holder of a
Global Capital Security may grant proxies and otherwise authorize any person,
including Participants and persons that may hold interests through Participants,
to take any action which such Holder is entitled to take under this Declaration
or the Securities.
(e) In the event of the occurrence of any of the events specified in
Section 7.9(b), the Trust will promptly make available to the Property Trustee a
reasonable supply of certificated Capital Securities in fully registered form
without distribution coupons.
SECTION 7.10 Cancellation. The Trust at any time may deliver
Capital Securities to the Property Trustee for cancellation. The Registrar,
Paying Agent and Exchange Agent shall forward to the Property Trustee any
Capital Securities surrendered to them for registration of transfer, redemption,
exchange or payment. The Property Trustee shall promptly cancel all Capital
Securities, surrendered for registration of transfer, redemption, exchange,
payment, replacement or cancellation and shall dispose of cancelled Capital
Securities as the Trust directs, provided that the Property Trustee shall not be
obligated to destroy Capital Securities. The Trust may not issue new Capital
Securities to replace Capital Securities that it has paid or that have been
delivered to the Property Trustee for cancellation or that any holder has
exchanged.
SECTION 7.11 CUSIP Numbers. The Trust in issuing the Capital
Securities may use "CUSIP" numbers (if then generally in use), and, if so, the
Property Trustee shall use
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"CUSIP" numbers in notices of redemption as a convenience to Holders of Capital
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Capital
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Capital
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust. (a) The Trust shall automatically
terminate:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or liquidation or its
equivalent with respect to the Sponsor; or the revocation of the Sponsor's
charter and the expiration of 90 days after the date of revocation without a
reinstatement thereof;
(iii) following the distribution of a Like Amount of the Debentures to the
Holders, provided that, the Property Trustee has received written notice from
the Sponsor directing the Property Trustee to terminate the Trust (which
direction is optional, and except as otherwise expressly provided below, within
the discretion of the Sponsor) and provided, further, that such direction and
such distribution is conditioned on (i) the receipt by the Sponsor or the Trust,
as the case requires, of any required regulatory approval, and (ii) the
Administrative Trustees' receipt of an opinion of an independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may rely
on published rulings of the Internal Revenue Service, to the effect that the
Holders will not recognize any gain or loss for United States federal income tax
purposes as a result of the dissolution of the Trust and the distribution of
Debentures;
(iv) upon the entry of a decree of judicial dissolution of the Trust by a
court of competent jurisdiction;
(v) when all of the Securities shall have been called for redemption and
the amounts necessary for redemption thereof shall have been paid to the Holders
in accordance with the terms of the Securities;
(vi) upon the repayment of the Debentures or at such time as no Debentures
are outstanding; or
(vii) the expiration of the term of the Trust provided in Section 3.14.
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(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Administrative Trustees shall file a
certificate of cancellation with the Secretary of State of the State of
Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities. (a) Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration and in the terms of the Securities. Any transfer
or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Capital Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration. Any transfer or purported transfer of any
security not made in accordance with this Declaration shall be null and void.
(c) The Sponsor may not transfer the Common Securities.
(d) The Administrative Trustees shall provide for the registration of
Capital Securities and of the transfer of Securities, which will be effected
without charge but only upon payment (with such indemnity as the Administrative
Trustees may require) in respect of any tax or other governmental charges that
may be imposed in relation to it. Upon surrender for registration of transfer
of any Capital Securities, the Administrative Trustees shall cause one or more
new Securities to be issued in the name of the designated transferee or
transferees. Every Capital Security surrendered for registration of transfer
shall be accompanied by a written instrument of transfer in form satisfactory to
the Administrative Trustees and the Registrar duly executed by the Holder or
such Holder's attorney duly authorized in writing. Each Capital Security
surrendered for registration of transfer shall be canceled by the Property
Trustee. A transferee of a Capital Security shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Capital Security. By acceptance of a Security, each transferee
shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.2 Transfer Procedures and Restrictions (a) General.
Except as otherwise provided in Section 9.2(b), if Capital Securities are issued
upon the transfer, exchange or replacement of Capital Securities bearing the
Restricted Securities Legend set forth in Exhibit A-1 hereto, or if a request is
made to remove such Restricted Securities Legend on Capital Securities, the
Capital Securities so issued shall bear the Restricted Securities Legend, or the
Restricted Securities Legend shall not be removed, as the case may be, unless
there is delivered to the Trust and the
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Property Trustee such satisfactory evidence, which shall include an Opinion of
Counsel as may be reasonably required by the Sponsor and the Property Trustee,
that neither the legend nor the restrictions on transfer set forth therein are
required to ensure that transfers thereof are made pursuant to an exception from
the registration requirements of the Securities Act or, with respect to
Restricted Securities, that such Securities are not "restricted" within the
meaning of Rule 144. Upon provision of such satisfactory evidence, the Property
Trustee, at the written direction of the Trust, shall authenticate and deliver
Capital Securities that do not bear the legend.
(b) Transfers After Effectiveness of a Registration Statement. After
the effectiveness of a Registration Statement with respect to any Capital
Securities, all requirements pertaining to legends on such Capital Securities
will cease to apply, and beneficial interests in a Capital Security in global
form without legends will be available to transferees of such Capital
Securities, upon exchange of the transferring holder's Restricted Definitive
Capital Security or directions to transfer such Holder's beneficial interest
in the Global Capital Security. No such transfer or exchange of a Restricted
Definitive Capital Security or of an interest in the Global Capital Security
shall be effective unless the transferor delivers to the Trust a certificate in
a form substantially similar to that attached hereto as the "Form of Assignment"
in Exhibit A-1. Except as otherwise provided in Section 9.2(m), after the
effectiveness of a Registration Statement, the Trust shall issue and the
Property Trustee, upon a written order of the Trust signed by one Administrative
Trustee, shall authenticate a Capital Security in global form without the
Restricted Securities Legend (the "Unrestricted Global Capital Security") to
deposit with the Clearing Agency to evidence transfers of beneficial interests
from the (i) Global Capital Security and (ii) Restricted Definitive Capital
Securities.
(c) Transfer and Exchange of Definitive Capital Securities. When
Definitive Capital Securities are presented to the Registrar
(x) to register the transfer of such Definitive Capital Securities, or
(y) to exchange such Definitive Capital Securities for an equal number
of Definitive Capital Securities,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Capital Securities surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Trust and the Registrar or
co-registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) in the case of Definitive Capital Securities that are Restricted
Definitive Capital Securities:
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(A) if such Restricted Capital Securities are being delivered to
the Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect; or
(B) if such Restricted Capital Securities are being transferred:
(i) a certification from the transferor in a form substantially similar to
that attached hereto as the "Form of Assignment" in Exhibit A-1, and (ii)
if the Trust or Registrar so requests, evidence reasonably satisfactory to
them as to the compliance with the restrictions set forth in the Restricted
Securities Legend.
(d) Restrictions on Transfer of a Definitive Capital Security for a
Beneficial Interest in a Global Capital Security. A Definitive Capital Security
may not be exchanged for a beneficial interest in a Global Capital Security
except upon satisfaction of the requirements set forth below. Upon receipt by
the Property Trustee of a Definitive Capital Security, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the
Property Trustee and the Administrative Trustees, together with:
(i) if such Definitive Capital Security is a Restricted Capital
Security, certification (in a form substantially similar to that attached
hereto as the "Form of Assignment" in Exhibit A-1); and
(ii) whether or not such Definitive Capital Security is a Restricted
Capital Security, written instructions directing the Property Trustee to
make, or to direct the Clearing Agency to make, an adjustment on its books
and records with respect to the appropriate Global Capital Security to
reflect an increase in the number of the Capital Securities represented by
such Global Capital Security,
then the Property Trustee shall cancel such Definitive Capital Security and
cause, or direct the Clearing Agency to cause, the aggregate number of Capital
Securities represented by the appropriate Global Capital Security to be
increased accordingly. If no Global Capital Securities are then outstanding,
the Trust shall issue and the Property Trustee shall authenticate, upon written
order of any Administrative Trustee, an appropriate number of Capital Securities
in global form.
(e) Transfer and Exchange of Global Capital Securities. Subject to
Section 9.2(f), the transfer and exchange of Global Capital Securities or
beneficial interests therein shall be effected through the Clearing Agency, in
accordance with this Declaration (including applicable restrictions on transfer
set forth herein, if any) and the procedures of the Clearing Agency therefor.
(f) Transfer of a Beneficial Interest in a Global Capital Security for
a Definitive Capital Security.
(i) Any Person having a beneficial interest in a Global Capital
Security may upon request, but only upon 20 days prior notice to the
Property Trustee, and if accompanied by
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the information specified below, exchange such beneficial interest for a
Definitive Capital Security representing the same number of Capital
Securities. Upon receipt by the Property Trustee from the Clearing Agency
or its nominee on behalf of any Person having a beneficial interest in a
Global Capital Security of written instructions or such other form of
instructions as is customary for the Clearing Agency or the Person
designated by the Clearing Agency as having such a beneficial interest in a
Restricted Capital Security and a certification from the transferor (in a
form substantially similar to that attached hereto as the "Form of
Assignment" in Exhibit A-1), which may be submitted by facsimile, then the
Property Trustee will cause the aggregate number of Capital Securities
represented by Global Capital Securities to be reduced on its books and
records and, following such reduction, the Trust will execute and the
Property Trustee will authenticate and make available for delivery to the
transferee a Definitive Capital Security.
(ii) Definitive Capital Securities issued in exchange for a beneficial
interest in a Global Capital Security pursuant to this Section 9.2(f) shall
be registered in such names and in such authorized denominations as the
Clearing Agency, pursuant to instructions from its Participants or indirect
participants or otherwise, shall instruct the Property Trustee in writing.
The Property Trustee shall deliver such Capital Securities to the persons
in whose names such Capital Securities are so registered in accordance with
such instructions of the Clearing Agency.
(g) Restrictions on Transfer and Exchange of Global Capital
Securities. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in subsection (h) of this Section 9.2), a Global
Capital Security may not be transferred as a whole except by the Clearing Agency
to a nominee of the Clearing Agency or another nominee of the Clearing Agency or
by the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.
(h) Authentication of Definitive Capital Securities. If at any time:
(i) there occurs a Default or an Event of Default which is continuing,
or
(ii) the Trust, in its sole discretion, notifies the Property Trustee
in writing that it elects to cause the issuance of Definitive Capital
Securities under this Declaration,
then the Trust will execute, and the Property Trustee, upon receipt of a written
order of the Trust signed by one Administrative Trustee requesting the
authentication and delivery of Definitive Capital Securities to the Persons
designated by the Trust, will authenticate and make available for delivery
Definitive Capital Securities, equal in number to the number of Capital
Securities represented by the Global Capital Securities, in exchange for such
Global Capital Securities.
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(i) Legend.
-------
(i) Except as permitted by the following paragraph (ii), each Capital
Security certificate evidencing the Global Capital Securities and the
Definitive Capital Securities (and all Capital Securities issued in exchange
therefor or substitution thereof) shall bear a legend (the "Restricted
Securities Legend") in substantially the following form:
THE CAPITAL SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS
CAPITAL SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS CAPITAL
SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY) ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (E) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED
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STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (F) TO
AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT, OR (G) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E), (F) OR (G) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
REASONABLY SATISFACTORY TO EACH OF THEM, AND (ii) PURSUANT TO CLAUSE (F) TO
REQUIRE THAT THE TRANSFEROR DELIVER TO THE TRUST A LETTER FROM THE
TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING MEMORANDUM
DATED JANUARY 17, 1997. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
(ii) Upon any sale or transfer of a Restricted Capital Security (including
any Restricted Capital Security represented by a Global Capital Security)
pursuant to an effective registration statement under the Securities Act or
pursuant to Rule 144 under the Securities Act after such registration statement
ceases to be effective:
(A) in the case of any Restricted Capital Security that is a
Definitive Capital Security, the Registrar shall permit the Holder thereof
to exchange such Restricted Capital Security for a Definitive Capital
Security that does not bear the Restricted Securities Legend and rescind
any restriction on the transfer of such Restricted Capital Security; and
(B) in the case of any Restricted Capital Security that is represented
by a Global Capital Security, the Registrar shall permit the Holder of such
Global Capital Security to exchange such Global Capital Security for
another Global Capital Security that does not bear the Restricted
Securities Legend.
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(j) Cancellation or Adjustment of Global Capital Security. At such
time as all beneficial interests in a Global Capital Security have either been
exchanged for Definitive Capital Securities to the extent permitted by this
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Capital Security shall be returned to the Property
Trustee for cancellation or retained and canceled by the Property Trustee. At
any time prior to such cancellation, if any beneficial interest in a Global
Capital Security is exchanged for Definitive Capital Securities, Capital
Securities represented by such Global Capital Security shall be reduced and an
adjustment shall be made on the books and records of the Property Trustee (if it
is then the custodian for such Global Capital Security) with respect to such
Global Capital Security, by the Property Trustee or the Securities Custodian, to
reflect such reduction.
(k) Obligations with Respect to Transfers and Exchanges of Capital
Securities.
(i) To permit registrations of transfers and exchanges, the Trust
shall execute and the Property Trustee shall authenticate Definitive
Capital Securities and Global Capital Securities at the Registrar's or co-
Registrar's request in accordance with the terms of this Declaration.
(ii) Registrations of transfers or exchanges will be effected without
charge, but only upon payment (with such indemnity as the Trust or the
Sponsor may require) in respect of any tax or other governmental charge
that may be imposed in relation to it.
(iii) The Registrar or co-Registrar shall not be required to register
the transfer of or exchange of (a) Capital Securities during a period
beginning at the opening of business 15 days before the day of mailing of a
notice of redemption or any notice of selection of Capital Securities for
redemption and ending at the close of business on the day of such mailing;
or (b) any Capital Security so selected for redemption in whole or in part,
except the unredeemed portion of any Capital Security being redeemed in
part.
(iv) Prior to the due presentation for registration of transfer of any
Capital Security, the Trust, the Property Trustee, the Paying Agent, the
Registrar or any co-Registrar may deem and treat the person in whose name a
Capital Security is registered as the absolute owner of such Capital
Security for the purpose of receiving Distributions on such Capital
Security and for all other purposes whatsoever, and none of the Trust, the
Property Trustee, the Paying Agent, the Registrar or any co-Registrar shall
be affected by notice to the contrary.
(v) All Capital Securities issued upon any transfer or exchange
pursuant to the terms of this Declaration shall evidence the same security
and shall be entitled to the same benefits under this Declaration as the
Capital Securities surrendered upon such transfer or exchange.
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(l) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Capital Security, a Participant in the
Clearing Agency or other Person with respect to the accuracy of the records
of the Clearing Agency or its nominee or of any Participant thereof, with
respect to any ownership interest in the Capital Securities or with respect
to the delivery to any Participant, beneficial owner or other Person (other
than the Clearing Agency) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to such
Capital Securities. All notices and communications to be given to the
Holders and all payments to be made to Holders under the Capital Securities
shall be given or made only to or upon the order of the registered Holders
(which shall be the Clearing Agency or its nominee, in the case of a Global
Capital Security). The rights of beneficial owners in any Global Capital
Security shall be exercised only through the Clearing Agency subject to the
applicable rules and procedures of the Clearing Agency. The Property
Trustee may conclusively rely and shall be fully protected in relying upon
information furnished by the Clearing Agency or any agent thereof with
respect to its Participants and any beneficial owners.
(ii) The Property Trustee and Registrar shall have no obligation or
duty to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Declaration or under applicable
law with respect to any transfer of any interest in any Capital Security
(including any transfers between or among Clearing Agency Participants or
beneficial owners in any Global Capital Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the
terms of this Declaration, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
(m) Exchange of Series A Capital Securities for Series B Capital
Securities. The Series A Capital Securities may be exchanged for Series B
Securities pursuant to the terms of the Exchange Offer. The Trustee shall make
the exchange as follows:
The Sponsor shall present the Property Trustee with an Officers'
Certificate certifying the following:
(A) upon issuance of the Series B Capital Securities, the transactions
contemplated by the Exchange Offer have been consummated; and
(B) the number of Series A Capital Securities properly tendered in the
Exchange Offer that are represented by a Global Capital Security
and the number of Series A Capital Securities properly tendered in
the Exchange Offer that are represented by Definitive Capital
Securities, the name of each Holder of such Definitive Capital
Securities, the liquidation amount of Capital Securities properly
tendered in the Ex-
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change Offer by each such Holder and the name and address to which
Definitive Capital Securities for Series B Capital Securities shall be
registered and sent for each such Holder.
The Property Trustee, upon receipt of (i) such Officers' Certificate,
(ii) an Opinion of Counsel (x) to the effect that the Series B Capital
Securities have been registered under Section 5 of the Securities Act and
the Indenture has been qualified under the Trust Indenture Act and (y) with
respect to the matters set forth in Section 3(p) of the Registration Rights
Agreement and (iii) a Company Order, shall authenticate (A) a Global
Capital Security for Series B Capital Securities in an aggregate
liquidation amount equal to the aggregate liquidation amount of Series A
Capital Securities represented by a Global Capital Security indicated in
such Officers' Certificate as having been properly tendered and (B)
Definitive Capital Securities representing Series B Capital Securities
registered in the names, and in the liquidation amounts, indicated in such
Officers' Certificate.
If, upon consummation of the Exchange Offer, less than all the
outstanding Series A Capital Securities shall have been properly tendered
and not withdrawn, the Property Trustee shall make an endorsement on the
Global Capital Security for Series A Capital Securities indicating the
reduction in the number and aggregate liquidation amount represented
thereby as a result of the Exchange Offer.
The Trust shall deliver such Definitive Capital Securities for Series
B Capital Securities to the Holders thereof as indicated in such Officers'
Certificate.
(n) Minimum Transfers. Series A Capital Securities may only be
transferred in minimum blocks of $100,000 aggregate liquidation amount until
such Series A Capital Securities are registered pursuant to an effective
registration statement filed under the Securities Act.
SECTION 9.3 Deemed Security Holders. The Trustees may treat the
Person in whose name any Security shall be registered on the books and records
of the Trust as the sole owner of such Security for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall
not be bound to recognize any equitable or other claim to or interest in such
Security on the part of any Person, whether or not the Trust shall have actual
or other notice thereof.
SECTION 9.4 Book Entry Interests. Global Capital Securities shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of the Clearing Agency, and no Capital Security
Beneficial Owner will receive a definitive Capital Security Certificate
representing such Capital Security Beneficial Owner's interests in such Global
Capital Securities, except as provided in Section 9.2 and Section 7.9. Unless
and until definitive, fully registered Capital Securities certificates have
been issued to the Capital Security Beneficial Owners pursuant to Section 9.2 or
Section 7.9:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
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(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Capital Securities and receiving approvals,
votes or consents hereunder) as the Holder of the Capital Securities and
the sole holder of the Global Certificates and shall have no obligation to
the Capital Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Capital Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Capital Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants; and
the Clearing Agency shall make book entry transfers among the Clearing
Agency Participants and receive and transmit payments of Distributions on
the Global Certificates to such Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency. Whenever a notice or other
communication to the Capital Security Holders is required under this
Declaration, the Trustees shall give all such notices and communications
specified herein to be given to the Holders of Global Capital Securities to the
Clearing Agency, and shall have no notice obligations to the Capital Security
Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency. If any
Clearing Agency elects to discontinue its services as securities depositary with
respect to the Capital Securities, the Administrative Trustees may, in their
sole discretion, appoint a successor Clearing Agency with respect to such
Capital Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability. (a) Except as expressly set forth in this
Declaration, the Securities Guarantees and the terms of the Securities, the
Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
(ii) be required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
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(b) The Sponsor shall be liable for all of the debts and obligations
of the Trust (other than with respect to the Securities) to the extent not
satisfied out of the Trust's assets.
(c) Pursuant to section 3803(a) of the Business Trust Act, the Holders
of the Capital Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of the authority conferred on such Indemnified Person by
this Declaration or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty. (a) To the extent that, at law or in
equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than the duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities,
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the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification. (a) (i) The Debenture Issuer shall
indemnify, to the full extent permitted by law, any Company Indemnified Person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Trust) by reason of the fact that he or she is or was a Company Indemnified
Person against expenses (including attorneys' fees and expenses), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him or
her in connection with such action, suit or proceeding if he or she acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Company Indemnified Person
did not act in good faith and in a manner which he or she reasonably believed to
be in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his or
her conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he or she is or was a Company Indemnified
Person against expenses (including attorneys' fees and expenses) actually
and reasonably incurred by him or her in connection with the defense or
settlement of such action or suit if he
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or she acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he or she shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he or she has met the applicable standard of conduct
set forth in paragraphs (i) and (ii). Such determination shall be made (1)
by the Administrative Trustees by a majority vote of a quorum consisting of
such Administrative Trustees who were not parties to such action, suit or
proceeding, (2) if such a quorum is not obtainable, or, even if obtainable,
if a quorum of disinterested Administrative Trustees so directs, by
independent legal counsel in a written opinion, or (3) by the Common
Security Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he or
she is not entitled to be indemnified by the Debenture Issuer as authorized
in this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Administrative Trustees by a majority vote of a quorum of
disinterested Administrative Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a
written opinion or (iii) the Common Security Holder of the Trust, that,
based upon the facts known to the Administrative Trustees, counsel or the
Common Security Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such person did
not believe to be in or not opposed to the best
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interests of the Trust, or, with respect to any criminal proceeding, that
such Company Indemnified Person believed or had reasonable cause to
believe his or her conduct was unlawful. In no event shall any advance be
made in instances where the Administrative Trustees, independent legal
counsel or the Common Security Holder reasonably determine that such person
deliberately breached his or her duty to the Trust or its Common or Capital
Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or Capital Security Holders of the Trust or otherwise, both as to
action in his or her official capacity and as to action in another capacity
while holding such office. All rights to indemnification under this Section
10.4(a) shall be deemed to be provided by a contract between the Debenture
Issuer and each Company Indemnified Person who serves in such capacity at
any time while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect any rights or
obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him or her and incurred by
him or her in any such capacity, or arising out of his or her status as
such, whether or not the Debenture Issuer would have the power to indemnify
him or her against such liability under the provisions of this Section
10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the Trust"
shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as he or her would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee and the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense including
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taxes (other than taxes based on the income of such Fiduciary Indemnified
Person) incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses. Any Covered Person, the Sponsor,
the Delaware Trustee and the Property Trustee may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the business of the Trust, and the
Trust and the Holders shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the Trust,
shall not be deemed wrongful or improper. No Covered Person, the Sponsor, the
Delaware Trustee or the Property Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the Property
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year. The fiscal year ("Fiscal Year") of the
Trust shall be the calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters. (a) At all times during
the existence of the Trust, the Administrative Trustees shall keep, or cause to
be kept, full books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for United States federal income tax
purposes. The books of account and the records of the Trust shall be examined
by and reported upon as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Administrative
Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders, within 90 days after the end of each Fiscal
Year of the Trust, annual financial
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statements of the Trust, including a balance sheet of the Trust as of the end of
such Fiscal Year, and the related statements of income or loss.
(c) The Administrative Trustees shall cause to be duly prepared and
delivered to each of the Holders, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and
the Treasury Regulations. Notwithstanding any right under the Code to deliver
any such statement at a later date, the Administrative Trustees shall endeavor
to deliver all such information statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Administrative Trustees on behalf of the Trust with any state or
local taxing authority.
SECTION 11.3 Banking. The Trust shall maintain one or more bank
accounts in the name and for the sole benefit of the Trust; provided, however,
that all payments of funds in respect of the Debentures held by the Property
Trustee shall be made directly to the Property Trustee Account and no other
funds of the Trust shall be deposited in the Property Trustee Account. The sole
signatories for such accounts shall be designated by the Administrative
Trustees; provided, however, that the Property Trustee shall designate the
signatories for the Property Trustee Account.
SECTION 11.4 Withholding. The Trust and the Administrative Trustees
shall comply with all withholding requirements under United States federal,
state and local law. The Trust shall request, and the Holders shall provide to
the Trust, such forms or certificates as are necessary to establish an exemption
from withholding with respect to each Holder, and any representations and forms
as shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Administrative
Trustees shall file required forms with applicable jurisdictions and, unless an
exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To
the extent that the Trust is required to withhold and pay over any amounts to
any authority with respect to Distributions or allocations to any Holder, the
amount withheld shall be deemed to be a Distribution in the amount of the
withholding to the Holder. In the event of any claimed over withholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual Distributions
made, the Trust may reduce subsequent Distributions by the amount of such
withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments. (a) Except as otherwise provided in this
Decla-
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ration or by any applicable terms of the Securities, this Declaration may
only be amended by a written instrument approved and executed by:
(i) the Administrative Trustees (or, if there are more than two
Administrative Trustees, a majority of the Administrative Trustees);
(ii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Property Trustee, the Property Trustee; and
(iii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Delaware Trustee, the Delaware Trustee.
(b) No amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate from the Sponsor
that such amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Property Trustee,
the Property Trustee shall have first received:
(A) an Officers' Certificate from the Sponsor that such amendment
is permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities),
provided, however, that the Property Trustee shall not be required to sign
any such amendment; and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required
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to be registered under the Investment Company Act;
(c) At such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities.
(f) The rights of the holders of the Common Securities under Article V
to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity, correct or supplement any provision in this
Declaration that may be inconsistent with any other provision of this
Declaration or to make any other provisions with respect to matters or
questions arising under this Declaration which shall not be inconsistent
with the other provisions of this Declaration; and
(ii) to modify, eliminate or add to any provisions of this Declaration
to such extent as shall be necessary to ensure that the Trust will be
classified for United States federal income tax purposes as a grantor trust
at all times that any Securities are outstanding or to ensure that the
Trust will not be required to register as an Investment Company under the
Investment Company Act.
provided, however, that in the case of clause (i), such action shall not
adversely affect in any material respect the interests of the Holders, and any
amendments of this Declaration shall become effective when notice thereof is
given to the Holders.
SECTION 12.2 Meetings of the Holders; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called at any time
by the Administrative Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the Capital Securities
are listed or admitted for trading. The Administrative Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Administrative Trustees one or more notices
in a
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<PAGE>
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders calling a meeting shall specify in writing the Security
Certificates held by the Holders exercising the right to call a meeting and only
those Securities specified shall be counted for purposes of determining whether
the required percentage set forth in the second sentence of this paragraph has
been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) Notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least seven days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders is permitted or required under this Declaration or
the rules of any stock exchange on which the Capital Securities are listed
or admitted for trading, such vote, consent or approval may be given at a
meeting of the Holders. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if a consent in
writing setting forth the action so taken is signed by the Holders of
Securities owning not less than the minimum amount of Securities in
liquidation amount that would be necessary to authorize or take such action
at a meeting at which all Holders having a right to vote thereon were
present and voting. Prompt notice of the taking of action without a meeting
shall be given to the Holders entitled to vote who have not consented in
writing. The Administrative Trustees may specify that any written ballot
submitted to the Security Holder for the purpose of taking any action with
out a meeting shall be returned to the Trust within the time specified by
the Administrative Trustees.
(ii) Each Holder may authorize any Person to act for it by proxy on
all matters in which a Holder is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. No proxy
shall be valid after the expiration of 11 months from the date thereof
unless otherwise provided in the proxy. Every proxy shall be revocable at
the pleasure of the Holder of Securities executing it. Except as otherwise
provided herein, all matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation Law of the State of
Delaware relating to proxies, and judicial interpretations thereunder, as
if the Trust were a Delaware corporation and the Holders were stock holders
of a Delaware corporation.
(iii) Each meeting of the Holders shall be conducted by the
Administrative Trustees or by such other Person that the Administrative
Trustees may designate.
(iv) Unless the Business Trust Act, this Declaration, the terms of the
Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Capital Securities are then listed or trading,
otherwise provides, the Administrative Trustees, in their sole discretion,
shall establish all other provisions relating to meetings of Holders,
including notice of the time, place or purpose of any meeting at which any
matter is to be voted on by
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<PAGE>
any Holders of Securities, waiver of any such notice, action by consent without
a meeting, the establishment of a record date, quorum requirements, voting in
person or by proxy or any other matter with respect to the exercise of any such
right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee. The
Trustee that acts as initial Property Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and each Successor
Property Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a corporation with trust powers and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(b) The execution, delivery and performance by the Property Trustee of
this Declaration has been duly authorized by all necessary corporate action
on the part of the Property Trustee. This Declaration has been duly
executed and delivered by the Property Trustee and constitutes a legal,
valid and binding obligation of the Property Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Property Trustee.
(d) No consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the
execution, delivery or performance by the Property Trustee of this
Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust power and
authority to execute and
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deliver, and to carry out and perform its obligations under the terms of,
this Declaration.
(b) The execution, delivery and performance by the Delaware Trustee of
this Declaration has been duly authorized by all necessary corporate action
on the part of the Delaware Trustee. This Declaration has been duly
executed and delivered by the Delaware Trustee and constitutes a legal,
valid and binding obligation of the Delaware Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Declaration.
(d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.1 Registration Rights Agreement. The Holders of the
Capital Securities, the Debentures and the Capital Securities Guarantee
(collectively, the "Registrable Securities") are entitled to the benefits of a
Registration Rights Agreement.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices. All notices provided for in this Declaration
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Administrative Trustees at
the Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders):
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<PAGE>
ComEd Financing II
c/o Commonwealth Edison Company
10 South Dearborn Street - 37th Floor
Chicago, Illinois 60603
Attention: Dennis F. O'Brien, Administrative Trustee
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
(c) if given to the Property Trustee, at the Property Trustee's mailing
address set forth below (or such other address as the Property Trustee may give
notice of to the Holders):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
(d) if given to the Holder of the Common Securities, at the mailing address
of the Sponsor set forth below (or such other address as the Holder of the
Common Securities may give notice to the Trust):
Commonwealth Edison Company
10 South Dearborn Street - 37th Floor
Chicago, Illinois 60690-0767
Attention: Treasurer
(e) if given to any other Holder, at the address set forth on the books and
records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
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SECTION 15.2 Governing Law. This Declaration and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws.
SECTION 15.3 Intention of the Parties. It is the intention of the
parties hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
SECTION 15.4 Headings. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.
SECTION 15.5 Successors and Assigns. Whenever in this Declaration
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Declaration by the Sponsor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether so expressed.
SECTION 15.6 Partial Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
SECTION 15.7 Counterparts. This Declaration may contain more than one
counterpart of the signature page and this Declaration may be executed by the
affixing of the signature of each of the Trustees to one of such counterpart
signature pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the signers
had signed a single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
/s/ John C. Bukovski
-------------------------------------------
John C. Bukovski, as Administrative Trustee
/s/ Dennis F. O'Brein
--------------------------------------------
Dennis F. O'Brien, as Administrative Trustee
WILMINGTON TRUST COMPANY,
Not in its individual capacity but solely as
Delaware Trustee and Property Trust
By: /s/ Lario M. Marini
----------------------------------------
Name: Lario M. Marini
Title: Vice President
COMMONWEALTH EDISON COMPANY,
as Sponsor
By: /s/ Dennis F. O'Brein
---------------------------------------
Dennis F. O'Brien
Treasurer
<PAGE>
ANNEX I
TERMS OF
8.50% SERIES A/SERIES B CAPITAL SECURITIES
8.50% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of January 24, 1997 (as amended from time to time, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Securities are set out below (each capitalized term used
but not defined herein has the meaning set forth in the Declaration or, if not
defined in such Declaration, as defined in the Offering Memorandum referred to
below in Section 2(c) of this Annex I):
1. Designation and Number.
----------------------
(a) Capital Securities. 150,000 Series A Capital Securities of the
Trust and 150,000 Series B Capital Securities of the Trust, each series with an
aggregate liquidation amount with respect to the assets of the Trust of one
hundred fifty million dollars ($150,000,000), and each with a liquidation amount
with respect to the assets of the Trust of $1,000 per security, are hereby
designated for the purposes of identification only as "8.50% Series A Capital
Securities" and "8.50% Series B Capital Securities", respectively (collectively,
the "Capital Securities"). The certificates evidencing the Capital Securities
shall be substantially in the form of Exhibit A-1 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of any stock
exchange on which the Capital Securities are listed.
(b) Common Securities. 4,640 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of four
million six hundred forty thousand dollars ($4,640,000) and a liquidation amount
with respect to the assets of the Trust of $1,000 per security, are hereby
designated for the purposes of identification only as "8.50% Common Securities"
(the "Common Securities"). The certificates evidencing the Common Securities
shall be substantially in the form of Exhibit A-2 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a rate
per annum of 8.50% (the "Coupon Rate") of the liquidation amount of $1,000 per
Security (the "Liquidation Amount"), such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one semi-annual period will bear additional distributions
thereon compounded semi-annually at the Coupon Rate (to the extent permitted by
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<PAGE>
applicable law). The term "Distributions", as used herein, includes
distributions of any such interest unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds on
hand legally available therefor.
(b) Distributions on the Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from January 24, 1997, and will be payable
semi-annually in arrears on January 15, and July 15 of each year, commencing on
July 15, 1997 (each, a "Distribution Date"), except as otherwise described
below. Distributions will be computed on the basis of a 360-day year consisting
of twelve 30-day months and for any period less than a full calendar month on
the basis of the actual number of days elapsed in such month. As long as no
Event of Default has occurred and is continuing under the Indenture, the
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period at any time and from time to time on
the Debentures for a period not exceeding 10 consecutive semi-annual periods,
including the first such semi-annual period during such period (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures, provided that no Extension Period shall end in a day
other than an Interest Payment Date for the Debentures or shall extend beyond
the Maturity Date of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, Distributions will
continue to accumulate with additional Distributions thereon (to the extent
permitted by applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Coupon Rate compounded semi-
annually during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further defer payments of interest by
further extending such Extension Period; provided that such Extension Period,
together with all such previous and further extensions within such Extension
Period, may not exceed 10 consecutive semi-annual periods, including the first
semi-annual period during such Extension Period, or extend beyond the Maturity
Date of the Debentures. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the first day of
the month in which the relevant Distribution Date occurs, which Distribution
Dates correspond to the interest payment dates on the Debentures. Subject to any
applicable laws and regulations and the provisions of the Declaration, each such
payment in respect of the Capital Securities will be made as described under the
heading "Description of Capital Securities -- Form, Denomination, Book-Entry
Procedures and Transfer" in the Offering Memorandum dated January 17, 1997, of
the Debenture Issuer and the Trust relating to the Securities and the
Debentures. Payments in respect of Capital Securities held in certificated form
will be made by check mailed to the Holder entitled thereto. The relevant record
dates for the Common Securities shall be the same as the record dates for the
Capital Securities. Distributions payable on any Securities that are not
punctually paid on any Distribution Date, as a result of the Debenture Issuer
having failed to make a payment under the Debentures, will cease to be payable
to the Holder on the relevant record date, and such defaulted Distribution will
instead be payable to
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the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), with the same force and effect as if made on such
date.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any termination of the Trust or the Sponsor otherwise gives
notice of its election to liquidate the Trust pursuant to Section 8.1(a)(iii) of
the Declaration, the Trust shall be liquidated by the Administrative Trustees as
expeditiously as the Administrative Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to the Holders a Like Amount (as defined below) of
the Debentures, unless such distribution is determined by the Property Trustee
not to be practicable, in which event such Holders will be entitled to receive
out of the assets of the Trust legally available for distribution to Holders,
after satisfaction of liabilities to creditors of the Trust as provided by
applicable law, an amount equal to the aggregate of the liquidation amount of
$1,000 per Security plus accumulated and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the Securities,
Securities having a Liquidation Amount equal to the principal amount of
Debentures to be paid in accordance with their terms and (ii) with respect to a
distribution of Debentures upon the liquidation of the Trust, Debentures having
a principal amount equal to the Liquidation Amount of the Securities of the
Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets on hand legally available
to pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Debentures in whole or in part, at
maturity or upon early redemption (either at the option of the Debenture Issuer
or pursuant to a Tax Event, as described below), the proceeds from such
repayment shall be simultaneously applied by the Property Trustee (subject to
the Property Trustee having received notice no later than 45 days prior to such
repayment) to redeem a Like Amount of the Securities at a redemption price equal
to (i) in the case of the repayment of the Debentures at maturity, the Maturity
Redemption Price (as defined below), (ii) in the case of the optional redemption
of the Debentures upon the occurrence and continuation
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of a Tax Event, the Tax Event Redemption Price (as defined below) and (iii) in
the case of the optional redemption of the Debentures other than as a result of
the occurrence and continuance of a Tax Event, the Optional Redemption Price (as
defined below). The Maturity Redemption Price, the Tax Event Redemption Price
and the Optional Redemption Price are referred to collectively as the
"Redemption Price". Holders will be given not less than 30 nor more than 60 days
notice of such redemption.
(b) (i) The "Maturity Redemption Price", with respect to a
redemption of Securities, shall mean an amount equal to the principal of
and accrued and unpaid interest on the Debentures as of the maturity date
thereof.
(ii) In the case of an optional redemption, if fewer than all the
outstanding Securities are to be so redeemed, the Capital Securities will
be redeemed Pro Rata and the Capital Securities to be redeemed will be
determined as described in Section 4(f)(ii) below. Upon the entry of an
order for the dissolution of the Trust by a court of competent
jurisdiction, the Debentures thereafter will be subject to optional
repayment, in whole, but not in part, on or after January 15, 2007 (the
"Initial Optional Redemption Date").
The Debenture Issuer shall have the right (subject to the conditions
in the Indenture) to elect to redeem the Debentures in whole or in part at
any time on or after the Initial Optional Redemption Date, upon not less
than 30 days and not more than 60 days notice, at the Optional Redemption
Price and, simultaneous with such redemption, to cause a Like Amount of the
Securities to be redeemed by the Trust at the Optional Redemption Price on
a Pro Rata basis. "Optional Redemption Price" shall mean a price equal to
the percentage of the liquidation amount of Securities to be redeemed plus
accumulated and unpaid Distributions thereon, if any, to the date of such
redemption if redeemed during the 12-month period beginning January 15 of
the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2007 104.250
2008 103.825
2009 103.400
2010 102.975
2011 102.550
2012 102.125
2013 101.700
2014 101.275
2015 100.850
2016 100.425
2017 and thereafter 100.000
</TABLE>
(c) If at any time a Tax Event (as defined below) occurs, the Debenture
Issuer
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shall have the right (subject to the conditions set forth in the Indenture) at
any time prior to the Initial Optional Redemption Date, upon not less than 30
nor more than 60 days notice, to redeem the Debentures in whole, but not in
part, within the 90 days following the occurrence of such Tax Event (the "90 Day
Period"), and, simultaneous with such redemption, to cause a Like Amount of the
Securities to be redeemed by the Trust at the Tax Event Redemption Price on a
Pro Rata basis.
"Tax Event" shall occur upon receipt by the Company and the Trust of
an opinion of a nationally recognized tax counsel (a "Tax Event Opinion")
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in, the laws or any
regulations thereunder of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or such
pronouncement or decision is announced on or after January 24, 1997, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90 days
of the date of such opinion, subject to United States federal income tax with
respect to income received or accrued on the Debentures, (ii) interest payable
by the Debenture Issuer on the Debentures is not, or within 90 days of the date
of such opinion, will not be, deductible by the Debenture Issuer, in whole or in
part, for United States federal income tax purposes, or (iii) the Trust is, or
will be within 90 days of the date of such opinion, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Tax Event Redemption Price" shall mean, with respect to a redemption
of Securities, a price equal to the greater of (i) 100% of the principal of a
Like Amount of Debentures to be redeemed or (ii) the sum, as determined by a
Quotation Agent (as defined in the Indenture), of the present values of the
principal amount and premium payable with respect to an optional redemption of a
Like Amount of the Debentures on the Initial Optional Redemption Date, together
with scheduled payments of interest on the Debentures from the redemption date
to and including the Initial Optional Redemption Date, discounted to the
redemption date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (as defined in the
Indenture), plus, in each case, accumulated and unpaid Distributions thereon, if
any, to the date of such redemption.
(d) On and from the date fixed by the Administrative Trustees for any
distribution of Debentures and liquidation of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) the Clearing Agency or its nominee
(or any successor Clearing Agency or its nominee), as the Holder of the Capital
Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and any
certificates representing Securities not held by the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee) will be deemed to
represent beneficial interests in a Like Amount of Debentures until such
certificates are presented to the Debenture Issuer or its agent for transfer or
reissue.
(e) The Trust may not redeem fewer than all the outstanding
Securities unless all
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<PAGE>
accumulated and unpaid Distributions have been paid on all Securities for all
semi-annual Distribution periods terminating on or before the date of
redemption.
(f) The procedure with respect to redemptions or distributions of
Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder to be redeemed
or exchanged not fewer than 30 nor more than 60 days before the date fixed
for redemption or exchange thereof which, in the case of a redemption, will
be the date fixed for redemption of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on which
notices are given pursuant to this Section 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders.
Each Redemption/Distribution Notice shall be addressed to the Holders of
Securities at the address of each such Holder appearing in the books and
records of the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any
other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Capital Securities, it being understood that, in
respect of Capital Securities registered in the name of and held of record
by the Clearing Agency or its nominee (or any successor Clearing Agency or
its nominee) or any nominee, the distribution of the proceeds of such
redemption will be made to the Clearing Agency and disbursed by such
Clearing Agency in accordance with the procedures applied by such agency or
nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice (which notice will be irrevocable), then (A)
with respect to Capital Securities issued in book-entry form, by 12:00
noon, New York City time, on the redemption date, provided that the
Debenture Issuer has paid the Property Trustee a sufficient amount of cash
in connection with the related redemption or maturity of the Debentures by
10:00 a.m., New York City time, on the maturity date or the date of
redemption, as the case requires, the Property Trustee will deposit
irrevocably with the Clearing Agency or its nominee (or successor Clearing
Agency or its nominee) funds sufficient to pay the applicable Redemption
Price with respect to such Capital Securities and will give the Clearing
Agency irrevocable instructions and authority to pay the Redemption Price
to the relevant Clearing Agency Participants, and (B) with respect to
Capital Securities issued in certificated form and Common Securities,
provided that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Property Trustee will pay the relevant
Redemption Price to the Holders by check mailed to the address of the
relevant Holder
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<PAGE>
appearing on the books and records of the Trust on the redemption date. If
a Redemption/Distribution Notice shall have been given and funds deposited
as required, if applicable, then immediately prior to the close of business
on the date of such deposit, or on the redemption date, as applicable,
Distributions will cease to accumulate on the Securities so called for
redemption and all rights of Holders so called for redemption will cease,
except the right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption Price, and such
Securities shall cease to be outstanding.
(iv) Payment of accumulated and unpaid Distributions on the Redemption
Date of the Securities will be subject to the rights of Holders of
Securities on the close of business on a regular record date in respect of
a Distribution Date occurring on or prior to such Redemption Date.
Neither the Administrative Trustees nor the Trust shall be required to
register or cause to be registered the transfer of (i) any Securities beginning
on the opening of business 15 days before the day of mailing of a notice of
redemption or any notice of selection of Securities for redemption or (ii) any
Securities selected for redemption except the unredeemed portion of any Security
being redeemed. If any date fixed for redemption of Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), with the same force and effect as
if made on such date fixed for redemption. If payment of the Redemption Price in
respect of any Securities is improperly withheld or refused and not paid either
by the Property Trustee or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities will continue to
accumulate from the original redemption date to the actual date of payment, in
which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(v) Redemption/Distribution Notices shall be sent by the Property
Trustee on behalf of the Trust to (A) in respect of the Capital Securities,
the Clearing Agency or its nominee (or any successor Clearing Agency or its
nominee) if the Global Certificates have been issued or, if Definitive
Capital Security Certificates have been issued, to the Holder thereof, and
(B) in respect of the Common Securities, to the Holder thereof.
(vi) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), provided the acquiror
is not the Holder of the Common Securities or the obligor under the
Indenture, the Sponsor or any of its subsidiaries may at any time and from
time to time purchase outstanding Capital Securities by tender, in the open
market or by private agreement.
I-7
<PAGE>
5. Voting Rights - Capital Securities.
----------------------------------
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Capital Securities will
have no voting rights.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 6.06 of
the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a majority in liquidation amount
of all outstanding Capital Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior approval of each Holder of the Capital Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Capital Securities except by subsequent vote of such Holders. The
Property Trustee shall notify each Holder of Capital Securities of any notice of
default with respect to the Debentures. In addition to obtaining the foregoing
approvals of such Holders of the Capital Securities, prior to taking any of the
foregoing actions, the Trustees shall obtain an opinion of counsel experienced
in such matters to the effect that the Trust will not be classified as an
association taxable as a corporation for United States federal income tax
purposes on account of such action.
If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or premium, if any, or interest on the Debentures on the due
date (or in the case of redemption, on the redemption date), then a Holder of
Capital Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or premium, if any, or interest on a
Like Amount of Debentures (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such Direct Action, the
rights of the Common Securities Holder will be subrogated to the rights of such
Holder of Capital Securities to the extent of any payment made by the Debenture
Issuer to such Holder of Capital Securities in such Direct Action. Except as
provided in the second preceding sentence, the Holders of Capital Securities
will not be able to exercise directly any other remedy available to the holders
of the Debentures.
Any approval or direction of Holders of Capital Securities may be
given at a separate meeting of Holders of Capital Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Property Trustees will cause a notice of any
meeting at which Holders of Capital Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Capital Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution
I-8
<PAGE>
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Capital Securities will be
required for the Trust to redeem and cancel Capital Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
Notwithstanding that Holders of Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Sponsor or any Affiliate of the Sponsor
shall not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 6(b), 6(c), and 7 or as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) Unless an Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by the holder of the Common Securities.
If an Event of Default has occurred and is continuing, the Property Trustee and
the Delaware Trustee may be removed at such time by the holders of a majority in
liquidation amount of the outstanding Capital Securities. In no event will the
holders of the Capital Securities have the right to vote to appoint, remove or
replace the Administrative Trustees, which voting rights are vested exclusively
in the Sponsor as the holder of the Common Securities. No resignation or removal
of a Trustee and no appointment of a successor trustee shall be effective until
the acceptance of appointment by the successor trustee in accordance with the
provisions of the Declaration.
(c) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 6.06 of
the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a majority in liquidation amount
of all outstanding Common Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior approval of each Holder of the Common Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Common Securities except by subsequent vote of such Holders. The Property
Trustee shall notify each Holder of Common Securities of any notice of default
with respect to the Debentures. In addition to obtaining the foregoing approvals
of such Holders of the Common Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an opinion of counsel experienced in such
matters
I-9
<PAGE>
to the effect that the Trust will not be classified as an association taxable as
a corporation for United States federal income tax purposes on account of such
action.
If an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Debenture Issuer to pay principal of or
premium, if any, or interest on the Debentures on the due date (or in the case
of redemption, on the redemption date), then a Holder of Common Securities may
institute a Direct Action for enforcement of payment to such Holder of the
principal of or premium, if any, or interest on a Like Amount of Debentures on
or after the respective due date specified in the Debentures. In connection with
any Direct Action, the rights of the Common Securities Holder will be
subordinated to the rights of such Holder of Capital Securities to the extent of
any payment made by the Debenture Issuer to such Holder of Common Securities in
such Direct Action. Except as provided in the second preceding sentence, the
Holders of Common Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Administrative Trustees will cause a notice of any meeting
at which Holders of Common Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
---------------------------------------
In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration may be amended from time to time by the Sponsor,
the Property Trustee and the Administrative Trustees, without the consent of the
Holders of the Securities (i) to cure any ambiguity, correct or supplement any
provisions in the Declaration that may be inconsistent with any other
provisions, or to make any other provisions with respect to matters or questions
arising under the Declaration which shall not be inconsistent with the other
provisions of the Declaration, or (ii) to modify, eliminate or add to any
provisions of the Declaration to such extent as shall be necessary to ensure
that the Trust will be classified for United States federal income tax purposes
as a grantor trust at all times that any Securities are outstanding or to ensure
that the Trust will not be required to register as an "Investment Company" under
the Investment Company Act; provided, however, that in the case of clause (i),
such action shall not adversely affect in any material respect the interests
I-10
<PAGE>
of any Holder of Securities, and any amendments of the Declaration shall become
effective when notice thereof is given to the holders of the Securities. The
Declaration may be amended by the Trustees and the Sponsor with (i) the consent
of Holders representing a majority in liquidation amount of all outstanding
Securities, and (ii) receipt by the Trustees of an Opinion of Counsel to the
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust for United States federal income tax purposes or the Trust's
exemption from status as an Investment Company under the Investment Company Act,
provided that, without the consent of each Holder of Trust Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date.
8. Pro Rata.
--------
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default has
occurred and is continuing, in which case any funds available to make such
payment shall be paid first to each Holder of the Capital Securities pro rata
according to the aggregate liquidation amount of Capital Securities held by the
relevant Holder relative to the aggregate liquidation amount of all Capital
Securities outstanding, and only after satisfaction of all amounts owed to the
Holders of the Capital Securities, to each Holder of Common Securities pro rata
according to the aggregate liquidation amount of Common Securities held by the
relevant Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
9. Ranking.
-------
The Capital Securities rank pari passu with the Common Securities and
payment thereon shall be made Pro Rata with the Common Securities, except that,
if an Event of Default occurs and is continuing, no payments in respect of
Distributions on, or payments upon liquidation, redemption or otherwise with
respect to, the Common Securities shall be made until the Holders of the Capital
Securities shall be paid in full the Distributions, Redemption Price,
Liquidation Distribution and other payments to which they are entitled at such
time.
10. Acceptance of Securities Guarantee and Indenture.
------------------------------------------------
Each Holder of Capital Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Capital Securities Guarantee
and the Common Securities Guarantee, respectively, including the subordination
provisions therein and to the provisions of the Indenture.
I-11
<PAGE>
11. No Preemptive Rights.
--------------------
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
12. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Capital
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture (including any supplemental indenture) to a Holder without
charge on written request to the Sponsor at its principal place of business.
I-12
<PAGE>
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS GLOBAL SECURITY IS A GLOBAL CAPITAL SECURITY, INSERT: THIS
CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS
CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY
THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.]
UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[IF THIS SECURITY IS A RESTRICTED CAPITAL SECURITY, INSERT: THE
CAPITAL SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF
THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
"AFFILIATE" OF THE COMPANY WAS
A1-1
<PAGE>
THE OWNER OF THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY)
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE),
(E) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (F)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, OR (G) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE
TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSE (D), (E), (F) OR (G) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION REASONABLY SATISFACTORY TO EACH OF THEM,
AND (ii) PURSUANT TO CLAUSE (F) TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE
TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE
OFFERING MEMORANDUM DATED JANUARY 17, 1997. SUCH HOLDER FURTHER AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
A1-2
<PAGE>
Certificate Number Aggregate Liquidation
Amount of Capital Securities
CUSIP NO.
----------
Certificate Evidencing Capital Securities
of
ComEd Financing II
8.50% Series __ Capital Securities
(liquidation amount $1,000 per Capital Security)
ComEd Financing II, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that ______________
(the "Holder") is the registered owner of [$_________ in aggregate liquidation
amount of Capital Securities of the Trust]* [the aggregate liquidation amount of
Capital Securities of the Trust specified in Schedule A hereto.]** representing
undivided beneficial interests in the assets of the Trust designated the 8.50%
Series __ Capital Securities (liquidation amount $1,000 per Capital Security)
(the "Capital Securities"). The Capital Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities represented hereby are issued and shall in
all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of January 24, 1997, as the same may
be amended from time to time (the "Declaration"), including the designation of
the terms of the Capital Securities as set forth in Annex I to the Declaration.
Capitalized terms used but not defined herein shall have the meaning given them
in the Declaration. The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Capital Securities Guarantee to the extent provided therein.
- ---------------
* Insert in Definitive Capital Securities only.
** Insert in Global Capital Securities only.
A1-3
<PAGE>
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Capital Securities
as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of __________, ____.
COMED FINANCING II
By:
-------------------------------
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the within-
mentioned Declaration.
Dated: _____________,____
WILMINGTON TRUST COMPANY,
Not in Its Individual Capacity But Solely as
Property Trustee
By:
-------------------------------------
Authorized Signatory
A1-4
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed at a rate
per annum of 8.50% (the "Coupon Rate") of the liquidation amount of $1,000 per
Capital Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
semi-annual period will bear interest thereon compounded semi-annually at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions", as used herein, includes such cash distributions and any such
interest unless otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the Property Trustee
and to the extent the Property Trustee has funds on hand legally available
therefor.
Distributions on the Capital Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if any Distributions have been paid, from January 24, 1997 and will be payable
semi-annually in arrears, on January 15 and July 15 of each year, commencing on
July 15, 1997, except as otherwise described below. Distributions will be
computed on the basis of a 360-day year consisting of twelve 30-day months and,
for any period less than a full calendar month, the number of days elapsed in
such month. As long as no Event of Default has occurred and is continuing under
the Indenture, the Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period at any time and
from time to time on the Debentures for a period not exceeding 10 consecutive
calendar semi-annual periods, including the first such semi-annual period during
such extension period (each an "Extension Period"), provided that no Extension
Period shall extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, semi-annual Distributions will continue to accumulate with interest
thereon (to the extent permitted by applicable law, but not at a rate exceeding
the rate of interest then accruing on the Debentures) at the Coupon Rate
compounded semi-annually during any such Extension Period. Prior to the
termination of any such Extension Period, the Debenture Issuer may further defer
payments of interest by further extending such Extension Period; provided that
such Extension Period, together with all such previous and further extensions
within such Extension Period, may not exceed 10 consecutive semi-annual periods,
including the first semi-annual period during such Extension Period, or extend
beyond the Maturity Date of the Debentures. Payments of accumulated
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
Subject to certain conditions set forth in the Declaration and the
Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time liquidate the Trust and cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust or, simultaneous with any
redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Capital Securities shall be redeemable as provided in the
Declaration.
A1-5
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Security
Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
--------------------------------------------
Signature:
---------------------------------------
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature Guarantee*:
----------------------------
_____________________
* Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A1-6
<PAGE>
[Include the following if the Capital Security bears a Restricted Capital
Securities Legend --
In connection with any transfer of any of the Capital Securities evidenced by
this certificate, the undersigned confirms that such Capital Securities are
being:
<TABLE>
<CAPTION>
CHECK ONE BOX BELOW
<S> <C> <C>
(1) [_] exchanged for the undersigned's own account without transfer; or
(2) [_] transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
(3) [_] transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
(4) [_] transferred to an institutional "accredited investor" within the
meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
under the Securities Act of 1933 that is acquiring the Capital
Securities for its own account, or for the account of such an
institutional "accredited investor," for investment purposes and
not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act of 1933; or
(5) [_] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933; or
(6) [_] transferred pursuant to an effective registration statement.
</TABLE>
Unless one of the boxes is checked, the Exchange Agent will refuse to register
any of the Capital Securities evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if box
(3), (4) or (5) is checked, the Registrar may require, prior to registering any
such transfer of the Capital Securities such legal opinions, certifications and
other information as the Trust has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, such as
the exemption provided by Rule 144 under such Act; provided, further, that (i)
if box 2 is checked, the transferee must also certify that it is a qualified
institutional buyer as defined in Rule 144A or (ii) if box (4) is checked, the
transferee must also provide to the Registrar a Transferee Letter of
Representation in the form attached to the Offering Memorandum of the Trust
dated January 17 , 1997; provided, further, that after the date that a
Registration Statement has been filed and so long as such Registration Statement
continues to be effective, the Registrar may only permit transfers for which box
(5) has been checked.
---------------------------------------
Signature
A1-7
<PAGE>
SCHEDULE A*
The initial aggregate liquidation amount of Capital Securities
evidenced by the Certificate to which this Schedule is attached is $__________
(equivalent to ________ Capital Securities). The notations on the following
table evidence decreases and increases in the number of Capital Securities
evidenced by such Certificate.
<TABLE>
<CAPTION>
Liquidation Amount
of Capital Securities
Decrease in Increase in Remaining After
Liquidation Amount Liquidation Amount Such Decrease or Notation by
of Capital Securities of Capital Securities Increase Registration
- --------------------- --------------------- --------------------- ------------
<S> <C> <C> <C>
</TABLE>
- -----------------
* Append to Global Capital Securities only.
A-1
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS COMMON SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF
THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
"AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS CAPITAL SECURITY (OR ANY
PREDECESSOR OF THIS CAPITAL SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (F) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (G) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E), (F) OR (G) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
INFORMATION REASONABLY SATISFACTORY TO EACH OF THEM, AND (ii) PURSUANT TO CLAUSE
(F) TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE TRUST A LETTER FROM THE
TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING
A2-1
<PAGE>
MEMORANDUM DATED JANUARY 17, 1997. SUCH HOLDER FURTHER AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
A2-2
<PAGE>
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
ComEd Financing II
8.50% Common Securities
(Liquidation Amount $1,000 per Common Security)
ComEd Financing II, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that Commonwealth Edison
Company, an Illinois corporation (the "Holder"), is the registered owner of
__________ common securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the 8.50% Common Securities
(Liquidation Amount $1,000 per Common Security) (the "Common Securities"). The
Common Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of January 24, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common Securities
as set forth in Annex I to the Declaration. Capitalized terms used but not
defined herein shall have the meaning given them in the Declaration. The Sponsor
will provide a copy of the Declaration, the Common Securities Guarantee and the
Indenture (including any supplemental indenture) to a Holder without charge upon
written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the Declaration
and is entitled to the benefits thereunder and to the benefits of the Common
Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A2-3
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ___ day
of _________, ____.
COMED FINANCING II
By:________________________________
Name:
Administrative Trustee
A2-4
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of 8.50% (the "Coupon Rate") of the liquidation amount of $1,000 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
semi-annual period will bear interest thereon compounded semi-annually at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions", as used herein, includes such cash distributions and any such
interest unless otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the Property Trustee
and to the extent the Property Trustee has funds available therefor.
Distributions on the Common Securities will be cumulative, will accrue from
the most recent date to which Distributions have been paid or, if no
Distributions have been paid, from January 24, 1997 and will be payable semi-
annually in arrears, on January 15 and July 15 of each year, commencing on July
15, 1997, except as otherwise described below. Distributions will be computed on
the basis of a 360-day year consisting of twelve 30-day months and, for any
period less than a full calendar month, the number of days elapsed in such
month. As long as no Event of Default has occurred and is continuing under the
Indenture, the Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period at any time and
from time to time on the Debentures for a period not exceeding 10 consecutive
calendar semi-annual periods, including the first such semi-annual period during
such extension period (each an "Extension Period"), provided that no Extension
Period shall extend beyond the Maturity Date of the Debentures. As a consequence
of such deferral, Distributions will also be deferred. Despite such deferral,
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate of interest
then accruing on the Debentures) at the Coupon Rate compounded semi-annually
during any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further extensions within such Extension Period, may
not exceed 10 consecutive semi-annual periods, including the first semi-annual
period during such Extension Period, or extend beyond the Maturity Date of the
Debentures. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Subject to certain conditions set forth in the Declaration and the
Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time liquidate the Trust and cause the Debentures to be distributed to the
holders to the Securities in liquidation of the Trust or, simultaneous with any
redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Common Securities shall be redeemable as provided in the Declaration.
A2-5
<PAGE>
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
----------------------------------------------------------------------
Signature:
-----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee*:
-------------------------------------------------------
- --------------------
* Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A2-6
<PAGE>
[Include the following if the Common Security bears a Restricted Common
Securities Legend --
In connection with any transfer of any of the Common Securities evidenced by
this certificate, the undersigned confirms that such Common Securities are
being:
CHECK ONE BOX BELOW
(1) [_] exchanged for the undersigned's own account without transfer; or
(2) [_] transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
(3) [_] transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
(4) [_] to an institutional "accredited investor" within the meaning of
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the
Securities Act that is acquiring the Preferred Security for its
own account, or for the account of such an institutional
"accredited investor," for investment purposes and not with a
view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act; or
(5) [_] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933; or
(6) [_] transferred pursuant to an effective Registration Statement.
Unless one of the boxes is checked, the Exchange Agent will refuse to register
any of the Common Securities evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if box
(3), (4) or (5) is checked, the Exchange Agent may require, prior to registering
any such transfer of the Preferred Securities such legal opinions,
certifications and other information as the Trust has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
of 1933, such as the exemption provided by Rule 144 under such Act; provided,
further, that (i) if box 2 is checked, the transferee must also certify that it
is a qualified institutional buyer as defined in Rule 144A or (ii) if box 4 is
checked, the transferee must also provide a Transferee Representation Letter in
the form attached to the Offering Memorandum of the Trust, dated January 17,
1997, after the date that a Registration Statement has been filed and so long as
such Registration Statement continues to be effective, the Exchange Agent may
only permit transfers for which box (5) has been checked.
-------------------------------------
Signature
A2-7
<PAGE>
Exhibit (4)-10
Commonwealth Edison Company
Form S-4 File No. 333-
=================================================
SERIES A CAPITAL SECURITIES GUARANTEE AGREEMENT
COMMONWEALTH EDISON COMPANY
and
WILMINGTON TRUST COMPANY
Dated as of January 24, 1997
=================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions..................................................2
SECTION 1.2 Interpretation...............................................5
ARTICLE II TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.............................6
SECTION 2.2 Lists of Holders of Securities...............................6
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee..........6
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee.....6
SECTION 2.5 Evidence of Compliance with Conditions Precedent.............7
SECTION 2.6 Events of Default; Waiver....................................7
SECTION 2.7 Event of Default; Notice.....................................7
SECTION 2.8 Conflicting Interests........................................7
ARTICLE III POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee
Trustee.............................................................8
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee.......9
SECTION 3.3 Not Responsible for Recitals or Issuance of Series A Capital
Securities Guarantee...............................................11
ARTICLE IV CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility...........12
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities
Guarantee Trustee..................................................12
ARTICLE V GUARANTEE
SECTION 5.1 Guarantee...................................................13
SECTION 5.2 Waiver of Notice and Demand.................................13
SECTION 5.3 Obligations Not Affected....................................13
SECTION 5.4 Rights of Holders...........................................14
SECTION 5.5 Guarantee of Payment........................................15
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 5.6 Subrogation.................................................15
SECTION 5.7 Independent Obligations.....................................15
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions..................................15
SECTION 6.2 Ranking.....................................................16
ARTICLE VII TERMINATION
SECTION 7.1 Termination.................................................16
ARTICLE VIII COMPENSATION AND EXPENSES OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
ARTICLE IX INDEMNIFICATION
SECTION 9.1 Exculpation.................................................17
SECTION 9.2 Indemnification.............................................18
ARTICLE X MISCELLANEOUS
SECTION 10.1 Successors and Assigns....................................18
SECTION 10.2 Amendments................................................18
SECTION 10.3 Notices...................................................18
SECTION 10.4 Exchange Offer............................................19
SECTION 10.5 Benefit...................................................20
SECTION 10.6 Governing Law.............................................20
</TABLE>
iii
<PAGE>
SERIES A CAPITAL SECURITIES GUARANTEE AGREEMENT
THIS SERIES A CAPITAL SECURITIES GUARANTEE AGREEMENT (the "Series A
Capital Securities Guarantee"), dated as of January 24, 1997, is executed and
delivered by Commonwealth Edison Company, an Illinois corporation (the
"Guarantor"), and Wilmington Trust Company, a Delaware banking corporation, as
trustee (the "Capital Securities Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Series A Capital Securities
(as defined herein) of ComEd Financing II, a Delaware statutory business trust
(the "Issuer").
WITNESSETH:
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of January 24, 1997, among the trustees of the Issuer,
the Guarantor, as sponsor, and the holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing on the
date hereof 150,000 capital securities, having an aggregate liquidation amount
of $150,000,000, such capital securities being designated the "8.50% Series A
Capital Securities (Liquidation Amount $1,000 per Capital Security)" (the
"Series A Capital Securities") and, in connection with an Exchange Offer (as
defined in the Declaration) has agreed to execute and deliver the Series B
Capital Securities Guarantee (as defined in the Declaration) for the benefit of
holders of the Series B Capital Securities (as defined in the Declaration);
WHEREAS, as incentive for the Holders to purchase the Series A Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Series A Capital Securities Guarantee, to pay to
the Holders the Guarantee Payments (as defined below); and the Guarantor agrees
to make certain other payments on the terms and conditions set forth herein;
WHEREAS, the Guarantor is executing and delivering a guarantee
agreement (the "Common Securities Guarantee"), with substantially identical
terms to this Series A Capital Securities Guarantee, for the benefit of the
holders of the Common Securities (as defined herein), except that if an Event of
Default (as defined in the Declaration) has occurred and is continuing, the
rights of holders of the Common Securities to receive Guarantee Payments under
the Common Securities Guarantee are subordinated, to the extent and in the
manner set forth in the Common Securities Guarantee, to the rights of holders of
Series A Capital Securities and the Series B Capital Securities to receive
Guarantee Payments under this Series A Capital Securities Guarantee and the
Series B Capital Securities Guarantee, as the case may be;
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby acknowledges shall benefit the Guarantor, the
Guarantor executes and delivers this Series A Capital Securities Guarantee for
the benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions. In this Series A Capital Securities
Guarantee, unless the context otherwise requires, capitalized terms used in this
Series A Capital Securities Guarantee but not defined in the preamble above have
the respective meanings assigned to them in this Section 1.1; terms defined in
the Declaration as at the date of execution of this Series A Capital Securities
Guarantee have the same meaning when used in this Series A Capital Securities
Guarantee unless otherwise defined in this Series A Capital Securities
Guarantee; a term defined anywhere in this Series A Capital Securities Guarantee
has the same meaning throughout; and a term defined in the Trust Indenture Act
has the same meaning when used in this Series A Capital Securities Guarantee,
unless otherwise defined in this Series A Capital Securities Guarantee or unless
the context otherwise requires.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, or any successor rule thereunder.
"Business Day" means any day other than a Saturday or a Sunday, or a
day on which banking institutions in Wilmington, Delaware or New York, New
York are authorized or required by law or executive order to close.
"Capital Securities Guarantee Trustee" means Wilmington Trust Company,
a Delaware banking corporation, until a Successor Capital Securities
Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Series A Capital Securities Guarantee and
thereafter means each such Successor Capital Securities Guarantee Trustee.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Capital Securities
Guarantee Trustee at which the corporate trust business of the Capital
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Series A
Capital Securities Guarantee is located at Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890.
"Covered Person" means any Holder or beneficial owner of Series A
Capital Securities.
2
<PAGE>
"Debentures" means the series of subordinated debt securities of the
Guarantor designated the "8.50% Series A Subordinated Deferrable Interest
Debentures due January 15, 2027" held by the Property Trustee (as defined
in the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Series A Capital Securities
Guarantee.
"Exchange Offer" means the Exchange Offer defined and described in the
Registration Rights Agreement.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Series A Capital Securities, to
the extent not paid or made by the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid
on such Series A Capital Securities to the extent the Issuer has funds on
hand legally available therefor at such time, (ii) the redemption price,
including all accumulated and unpaid Distributions to the date of
redemption (the "Redemption Price") to the extent the Issuer has funds on
hand legally available therefor at such time, with respect to any Series A
Capital Securities called for redemption by the Issuer, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Debentures to the
Holders in exchange for Series A Capital Securities as provided in the
Declaration), the lesser of (a) the Liquidation Distribution and (b) the
amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer. If an Indenture Event of Default has
occurred and is continuing, no guarantee payments under the Common
Securities Guarantee with respect to the Common Securities or any guarantee
payment under any Other Common Securities Guarantees shall be made until
the Holders shall be paid in full the Guarantee Payments to which they are
entitled under this Series A Capital Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Series A Capital Securities; provided, however, that,
in determining whether the holders of the requisite percentage of Series A
Capital Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Affiliate of the
Guarantor.
"Indemnified Person" means the Capital Securities Guarantee Trustee,
any Affiliate of the Capital Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Capital Securities Guarantee Trustee.
"Indenture" means the Indenture dated as of September 1, 1995, among
the Guarantor (the "Debenture Issuer") and Wilmington Trust Company, as
trustee (the "Debenture Trustee"), as supplemented by the First
Supplemental Indenture dated as of
3
<PAGE>
September 19, 1995, between the Debenture Issuer and the Debenture Trustee,
and the Second Supplemental Indenture.
"Indenture Event of Default" shall mean any event specified in Section
6.01 of the Indenture.
"Liquidation Distribution" means the aggregate of the liquidation
amount and all accumulated and unpaid Distributions on the Series A Capital
Securities to the date of payment.
"Majority in liquidation amount of the Series A Capital Securities"
means, except as provided by the Trust Indenture Act, a vote by Holder(s)
of more than 50% of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all Series A Capital Securities.
"Officers' Certificate" means a certificate signed by any two of the
Chairman, a Vice Chairman, the Chief Executive Officer, the President, a
Vice President, the Comptroller, the Treasurer, the Secretary, an Assistant
Treasurer or an Assistant Secretary of the Guarantor. Any Officers'
Certificate delivered with respect to compliance with a condition or
covenant provided for in this Series A Capital Securities Guarantee (other
than pursuant to Section 314(d)(4) of the Trust Indenture Act) shall
include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(c) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same meaning as
"Other Guarantees" in the Common Securities Guarantee.
"Other Guarantees" means all guarantees issued, or to be issued, by
the Guarantor with respect to capital securities similar to the Series A
Capital Securities issued by other trusts established, or to be
established, by the Guarantor, in each case similar to the Issuer. "Other
Guarantees" shall include the Preferred Securities Guarantee Agreement
dated as of September 26, 1995 issued by the Guarantor with respect to the
8.48% Trust Originated Preferred Securities of ComEd Financing I.
4
<PAGE>
"Other Indebtedness" means all subordinated notes, debentures or other
indebtedness issued by the Guarantor from time to time and sold to trusts
established, or to be established, by the Guarantor, in each case similar
to the Issuer. "Other Indebtedness" shall include the 8.48% Subordinated
Deferrable Interest Notes due September 30, 2035, issued by the Guarantor
to ComEd Financing I.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated association, or government
or any agency or political subdivision thereof, or any other entity of
whatever nature.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of January 24, 1997, among the Guarantor, the Issuer and
the Initial Purchasers named therein as such agreement may be amended,
modified or supplemented from time to time.
"Responsible Officer" means, with respect to the Capital Securities
Guarantee Trustee, the chairman of the board of directors, the president,
any vice president, the secretary, any assistant vice president, any
assistant secretary, the treasurer, any assistant treasurer, any trust
officer or assistant trust officer or other officer of the Capital
Securities Guarantee 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 that officer's knowledge of and
familiarity with the particular subject.
"Second Supplemental Indenture" means the Second Supplemental
Indenture dated as of January 24, 1997, between the Debenture Issuer and
the Debenture Trustee.
"Successor Capital Securities Guarantee Trustee" means a successor
Capital Securities Guarantee Trustee possessing the qualifications to act
as Capital Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939.
"Trust Securities" means the Common Securities, the Series A Capital
Securities and the Series B Capital Securities, collectively.
SECTION 1.2. Interpretation. Each definition in this Series A
Capital Securities Guarantee Agreement includes the singular and the plural, and
references to the neuter gender include the masculine and feminine where
appropriate. Terms which relate to accounting matters shall be interpreted in
accordance with generally accepted accounting principles in effect from time to
time. All references to "the Series A Capital Securities Guarantee Agreement" or
"this Series A Capital Securities Guarantee Agreement" are to this Series A
Capital Securities Guarantee Agreement as modified, supplemented or amended from
time to time. References to any statute
5
<PAGE>
mean such statute as amended at the time and include any successor legislation.
The word "or" is not exclusive, and the words "herein," "hereof" and "hereunder"
refer to this Series A Capital Securities Guarantee Agreement as a whole. The
headings to the Articles and Sections are for convenience of reference and shall
not affect the meaning or interpretation of this Series A Capital Securities
Guarantee Agreement. References to Articles and Sections mean the Articles and
Sections of this Series A Capital Securities Guarantee Agreement unless
otherwise specified.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application. (a) This Series A
Capital Securities Guarantee is subject to the provisions of the Trust Indenture
Act that are required to be part of this Series A Capital Securities Guarantee
and shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Series A Capital
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities. (a) The Guarantor shall
provide the Capital Securities Guarantee Trustee (unless the Capital Securities
Guarantee Trustee is otherwise the registrar of the Capital Securities) with a
list, in such form as the Capital Securities Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of
such date, (i) within ten Business Days after January 1 and June 30 of each
year, and (ii) at any other time within 30 days of receipt by the Guarantor of a
written request for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Capital Securities Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Capital Securities Guarantee Trustee by the
Guarantor. The Capital Securities Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Capital Securities Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee.
Within 60 days after May 15 of each year, commencing May 15, 1997, the Capital
Securities Guarantee Trustee shall provide to the Holders such reports as are
required by Section 313(a) of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Capital
Securities Guarantee Trustee shall also comply with the other requirements of
Section 313 of the Trust Indenture Act.
6
<PAGE>
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee.
The Guarantor shall provide to the Capital Securities Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act. Delivery of such reports, information and documents to the
Capital Securities Guarantee Trustee is for informational purposes only and the
Capital Securities Guarantee Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Capital Securities Guarantee Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Capital Securities Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Series A Capital Securities Guarantee that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver. The Holders of a Majority in
liquidation amount of the Series A Capital Securities may, by vote, on behalf of
all the Holders, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Series A Capital Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice. (a) The Capital Securities
Guarantee Trustee shall, within 90 days after a Responsible Officer has
knowledge of the occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to all Holders, notices of all Events of Default actually
known to a Responsible Officer of the Capital Securities Guarantee Trustee,
unless such Events of Default have been cured before the giving of such notice,
provided, that, except in the case of default in the payment of any Guarantee
Payment, the Capital Securities Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, or a trust committee of directors and/or Responsible Officers of the
Capital Securities Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the holders of the Series A
Capital Securities.
(b) The Capital Securities Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Capital Securities Guarantee
Trustee shall have received written notice from the Guarantor or a Holder, or a
Responsible Officer of the Capital Securities Guarantee Trustee charged with
the administration of the Declaration shall have obtained actual knowledge, of
such Event of Default.
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SECTION 2.8 Conflicting Interests. The Declaration shall be deemed to
be specifically described in this Series A Capital Securities Guarantee for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee
Trustee. (a) This Series A Capital Securities Guarantee shall be held by the
Capital Securities Guarantee Trustee for the benefit of the Holders, and the
Capital Securities Guarantee Trustee shall not transfer this Series A Capital
Securities Guarantee to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(b) or to a Successor Capital Securities Guarantee
Trustee on acceptance by such Successor Capital Securities Guarantee Trustee of
its appointment to act as Successor Capital Securities Guarantee Trustee. The
right, title and interest of the Capital Securities Guarantee Trustee shall
automatically vest in any Successor Capital Securities Guarantee Trustee, and
such vesting and succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Capital Securities Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Capital Securities Guarantee Trustee has occurred and is continuing, the
Capital Securities Guarantee Trustee shall enforce this Series A Capital
Securities Guarantee for the benefit of the Holders.
(c) The Capital Securities Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Series A Capital Securities Guarantee, and no implied covenants
shall be read into this Series A Capital Securities Guarantee against the
Capital Securities Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) and is actually
known to a Responsible Officer of the Capital Securities Guarantee Trustee, the
Capital Securities Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Series A Capital Securities Guarantee, and use the
same degree of care and skill in its exercise thereof as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Series A Capital Securities Guarantee shall
be construed to relieve the Capital Securities Guarantee Trustee from liability
for its own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
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(A) the duties and obligations of the Capital Securities
Guarantee Trustee shall be determined solely by the express provisions
of this Series A Capital Securities Guarantee, and the Capital
Securities Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Series A Capital Securities Guarantee, and no implied
covenants or obligations shall be read into this Series A Capital
Securities Guarantee against the Capital Securities Guarantee Trustee;
and
(B) in the absence of bad faith on the part of the Capital
Securities Guarantee Trustee, the Capital Securities Guarantee Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Capital Securities Guarantee Trustee and
conforming to the requirements of this Series A Capital Securities
Guarantee; but in the case of any such certificates or opinions that
by any provision hereof are specifically required to be furnished to
the Capital Securities Guarantee Trustee, the Capital Securities
Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Series A Capital Securities Guarantee;
(ii) the Capital Securities Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of the
Capital Securities Guarantee Trustee, unless it shall be proved that the
Capital Securities Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Capital Securities Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Series A Capital Securities relating to the
time, method and place of conducting any proceeding for any remedy avail
able to the Capital Securities Guarantee Trustee, or exercising any trust
or power conferred upon the Capital Securities Guarantee Trustee under this
Series A Capital Securities Guarantee; and
(iv) no provision of this Series A Capital Securities Guarantee shall
require the Capital Securities Guarantee Trustee to expend or risk its own
funds or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers, if the
Capital Securities Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Series A Capital Securities Guarantee
or indemnity, reasonably satisfactory to the Capital Securities Guarantee
Trustee, against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
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(i) The Capital Securities Guarantee Trustee may conclusively rely,
and shall be fully protected in acting or refraining from acting, upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this Series
A Capital Securities Guarantee may be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Series A Capital
Securities Guarantee, the Capital Securities Guarantee Trustee shall deem
it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Capital Securities
Guarantee Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Guarantor.
(iv) The Capital Securities Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Capital Securities Guarantee Trustee may consult with counsel
of its selection, and the advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include any of
its employees. The Capital Securities Guarantee Trustee shall have the
right at any time to seek instructions concerning the administration of
this Series A Capital Securities Guarantee from any court of competent
jurisdiction.
(vi) The Capital Securities Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Series A Capital Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Capital Securities
Guarantee Trustee such security and indemnity, reasonably satisfactory to
the Capital Securities Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the Capital
Securities Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Capital Securities Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the Capital Securities
Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Series A
Capital Securities Guarantee.
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(vii) The Capital Securities Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Capital Securities
Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(viii) The Capital Securities Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the Capital
Securities Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the Capital Securities Guarantee Trustee or
its agents hereunder shall bind the Holders, and the signature of the
Capital Securities Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Capital Securities
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Series A Capital Securities Guarantee, both of which
shall be conclusively evidenced by the Capital Securities Guarantee
Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Series A Capital Securities
Guarantee the Capital Securities Guarantee Trustee shall deem it desirable
to receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Capital Securities Guarantee Trustee
(i) may request instructions from the Holders of a Majority in liquidation
amount of the Series A Capital Securities, (ii) may refrain from enforcing
such remedy or right or taking such other action until such instructions
are received, and (iii) shall be protected in conclusively relying on or
acting in accordance with such instructions.
(xi) The Capital Securities Guarantee Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Series
A Capital Securities Guarantee.
(b) No provision of this Series A Capital Securities Guarantee shall
be deemed to impose any duty or obligation on the Capital Securities Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Capital Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Capital Securities Guarantee
Trustee shall be construed to be a duty.
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SECTION 3.3 Not Responsible for Recitals or Issuance of Series A
Capital Securities Guarantee. The recitals contained in this Series A Capital
Securities Guarantee shall be taken as the statements of the Guarantor, and the
Capital Securities Guarantee Trustee does not assume any responsibility for
their correctness. The Capital Securities Guarantee Trustee makes no represen
tation as to the validity or sufficiency of this Series A Capital Securities
Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility. (a)
There shall at all times be a Capital Securities Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least fifty
million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Capital Securities Guarantee Trustee shall
cease to be eligible to so act under Section 4.1(a), the Capital Securities
Guarantee Trustee shall immediately resign in the manner and with the effect set
out in Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital Securities Guarantee Trustee and the Guarantor shall
in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act, subject to the penultimate paragraph thereof.
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities
Guarantee Trustee. (a) Subject to Section 4.2(b), the Capital Securities
Guarantee Trustee may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default.
(b) The Capital Securities Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Capital Securities Guarantee
Trustee has been appointed and
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has accepted such appointment by written instrument executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guarantor.
(c) The Capital Securities Guarantee Trustee shall hold office until a
Successor Capital Securities Guarantee Trustee shall have been appointed or
until its removal or resignation. The Capital Securities Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Capital Securities Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take effect until a
Successor Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guarantor and the
resigning Capital Securities Guarantee Trustee.
(d) If no Successor Capital Securities Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of removal or resignation, the Capital
Securities Guarantee Trustee resigning or being removed may petition any court
of competent jurisdiction for appointment of a Successor Capital Securities
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Capital Securities Guarantee
Trustee.
(e) No Capital Securities Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Capital Securities Guarantee Trustee.
(f) Upon termination of this Series A Capital Securities Guarantee or
removal or resignation of the Capital Securities Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Capital Securities Guarantee
Trustee all amounts due to the Capital Securities Guarantee Trustee accrued to
the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of this Series A Capital Securities Guarantee and of any
liability to which it applies or may apply, presentment, demand for payment, any
right to require a proceeding first against the Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
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SECTION 5.3 Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Series A Capital Securities
Guarantee shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Series A Capital
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Series A Capital Securities
or the extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Series A Capital Securities
(other than an extension of time for payment of Distributions, Redemption
Price, Liquidation Distribution or other sums payable that results from the
extension of any interest payment period on the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Series A
Capital Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Series A
Capital Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred;
(g) the consummation of the Exchange Offer; or
(h) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.3 that the obligations of the Guarantor with
respect to the Guarantee Payments shall be absolute and unconditional under
any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders. (a) The Holders of a Majority in
liquidation amount of the Series A Capital Securities have the right to direct
the time, method and place of
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conducting any proceeding for any remedy available to the Capital Securities
Guarantee Trustee in respect of this Series A Capital Securities Guarantee or
exercising any trust or power conferred upon the Capital Securities Guarantee
Trustee under this Series A Capital Securities Guarantee provided, however,
that, subject to the duties and responsibilities of the Debenture Trustee
pursuant to the Indenture, the Capital Securities Guarantee Trustee shall have
the right to decline to follow any such direction if the Capital Securities
Guarantee Trustee shall determine that the action so directed would be unjustly
prejudicial to the holders not taking part in such direction or if the Capital
Securities Guarantee Trustee being advised by counsel determines that the action
or proceeding so directed may not lawfully be taken or if the Capital Securities
Guarantee Trustee in good faith by its board of directors or trustees, executive
committee, or a trust committee of directors or trustees and/or Responsible
Officers shall determine that the action or proceedings so directed would
involve the Capital Securities Guarantee Trustee in personal liability.
(b) If the Capital Securities Guarantee Trustee fails to enforce such
Series A Capital Securities Guarantee, any Holder may institute a legal
proceeding directly against the Guarantor to enforce the Capital Securities
Guarantee Trustee's rights under this Series A Capital Securities Guarantee,
without first instituting a legal proceeding against the Issuer, the Capital
Securities Guarantee Trustee or any other person or entity. The Guarantor waives
any right or remedy to require that any action be brought first against the
Issuer or any other person or entity before proceeding directly against the
Guarantor.
SECTION 5.5 Guarantee of Payment. This Series A Capital Securities
Guarantee creates a guarantee of payment and not of collection.
SECTION 5.6 Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
such Holders by the Guarantor under this Series A Capital Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Series A Capital
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Series A Capital Securities Guarantee. If any amount shall
be paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Issuer with
respect to the Series A Capital Securities, and that the Guarantor shall be
liable as principal and as debtor hereunder to make Guarantee Payments pursuant
to the terms of this Series A Capital Securities Guarantee notwith standing the
occurrence of any event referred to in subsections (a) through (h), inclusive,
of Section 5.3 hereof.
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions. So long as any Capital
Securities remain outstanding, the Guarantor shall not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Guarantor's capital stock (which
includes common, preference and preferred stock) or (ii) make any payment of
principal, interest or premium, if any, on or repay or repurchase or redeem any
debt securities of the Guarantor (including any Other Indebtedness) that rank
pari passu with or junior in right of payment to the Debentures or (iii) make
any guarantee payments with respect to any guarantee by the Guarantor of any
securities of any subsidiary of the Guarantor (including Other Guarantees) if
such guarantee ranks pari passu or junior in right of payment to the Debentures,
if at such time (i) an Indenture Event of Default has occurred and is
continuing, (ii) there shall have occurred any event of which the Guarantor has
actual knowledge that (a) is, or with the giving of notice or the lapse of time,
or both, would be an Indenture Event of Default and (b) in respect of which the
Guarantor shall not have taken reasonable steps to cure, (iii) the Guarantor
shall be in default with respect to its payment of any obligations under this
Series A Capital Securities Guarantee or (iv) the Guarantor shall have given
notice of its election of the exercise of its right to extend the interest
payment period pursuant to Section 4.2 of the Second Supplemental Indenture, or
any extension thereof, and shall not have rescinded such notice, and such period
of interest payment extension, or any extension thereof, shall have commenced.
SECTION 6.2 Ranking. This Series A Capital Securities Guarantee will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to Senior Indebtedness (as defined in
the Second Supplemental Indenture), to the same extent and in the same manner
that the Debentures are subordinated to Senior Indebtedness pursuant to the
Second Supplemental Indenture, it being understood that the terms of Article VI
of the Second Supplemental Indenture shall apply to the obligations of the
Guarantor under this Series A Capital Securities Guarantee as if (x) such
Article VI were set forth herein in full and (y) such obligations were
substituted for the term "Debentures" appearing in such Article VI, (ii)
subordinate and junior in right of payment to the Debentures and any Other
Indebtedness, (iii) pari passu with the most senior preferred stock now or
hereafter issued by the Guarantor and with any Other Guarantees and any Other
Common Securities Guarantee and any guarantee now or hereafter entered into by
the Guarantor in respect of any preferred stock of any Affiliate of the
Guarantor, and (iv) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination. This Series A Capital Securities Guarantee
shall terminate (i) upon full payment of the applicable Redemption Price (as
defined in the Declaration) of all Series A Capital Securities, (ii) upon full
payment of the Liquidation Amount or the distribution of
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the Debentures to the Holders of all of the Series A Capital Securities or (iii)
upon exchange of all the Series A Capital Securities for the Series B Capital
Securities in the Exchange Offer. Notwithstanding the foregoing, this Series A
Capital Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore payment
of any sums paid under the Series A Capital Securities or under this Series A
Capital Securities Guarantee.
ARTICLE VIII
COMPENSATION AND EXPENSES OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
The Guarantor covenants and agrees to pay to the Capital Securities
Guarantee Trustee from time to time, and the Capital Securities Guarantee
Trustee shall be entitled to, such compensation as shall be agreed to in writing
between the Guarantor and the Capital Securities Guarantee Trustee (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust), and the Guarantor will pay or reimburse the
Capital Securities Guarantee Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Capital Securities
Guarantee Trustee in accordance with any of the provisions of this Capital
Securities Guarantee (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Guarantor also covenants to indemnify each of the
Capital Securities Guarantee Trustee (and its officers, agents, directors and
employees) for, and to hold it harmless against, any and all loss, damage,
claim, liability or expense including taxes (other than taxes based on the
income of the Capital Securities Guarantee Trustee) incurred without negligence
or bad faith on the part of the Capital Securities Guarantee Trustee and arising
out of or in connection with the acceptance or administration of this guarantee,
including the costs and expenses of defending itself against any claim of
liability in the premises. The obligations of the Guarantor under this Article
VIII to compensate and indemnify the Capital Securities Guarantee Trustee and to
pay or reimburse the Capital Securities Guarantee Trustee for expenses,
disbursements and advances shall be secured by a lien prior to that of the
Series A Capital Securities upon all property and funds held or collected by the
Capital Securities Guarantee Trustee as such, except funds held in trust for the
benefit of the holders of particular Series A Capital Securities.
The provisions of this Article shall survive the termination of this
Capital Securities Guarantee.
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ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Series A Capital Securities Guarantee and in a manner that
such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Series A Capital
Securities Guarantee or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 9.2 Indemnification. The Guarantor agrees to indemnify each
Indemnified Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The obligation
to indemnify as set forth in this Section 9.2 shall survive the termination of
this Series A Capital Securities Guarantee.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Successors and Assigns. All guarantees and agreements
contained in this Series A Capital Securities Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders then outstanding.
SECTION 10.2 Amendments. Except with respect to any changes that do
not materially adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Series A Capital Securities Guarantee may
only be amended with the prior approval of the Holders of a Majority in
liquidation amount of the Series A Capital Securities. The provisions
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of the Declaration with respect to consents to amendments thereof (whether at a
meeting or otherwise) shall apply to the giving of such approval.
SECTION 10.3 Notices. All notices provided for in this Series A
Capital Securities Guarantee shall be in writing, duly signed by the party
giving such notice, and shall be delivered, telecopied or mailed by first class
mail, as follows:
(a) If given to the Issuer, in care of the Administrative Trustee at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Holders and the Capital Securities
Guarantee Trustee):
ComEd Financing II
c/o Commonwealth Edison Company
10 South Dearborn Street - 37th Floor
Chicago, Illinois 60603
Attention: Dennis F. O'Brien
Administrative Trustee
Telecopy: (312) 394-3110
(b) If given to the Capital Securities Guarantee Trustee, at the
Capital Securities Guarantee Trustee's mailing address set forth below (or
such other address as the Capital Securities Guarantee Trustee may give
notice of to the Holders and the Issuer):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telecopy: (302) 651-8882
(c) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to
the Holders and the Capital Securities Guarantee Trustee):
Commonwealth Edison Company
10 South Dearborn Street - 37th Floor
Chicago, Illinois 60603
Attention: Treasurer
Telecopy: (312) 394-3110
(d) If given to any Holder, at the address for such Holder set forth
on the books and records of the Issuer.
19
<PAGE>
All such notices shall be deemed to have been given when received in person,
telecopied with receipt confirmed, or mailed by first class mail, postage
prepaid except that if a notice or other document is refused delivery or cannot
be delivered because of a changed address of which no notice was given, such
notice or other document shall be deemed to have been delivered on the date of
such refusal or inability to deliver.
SECTION 10.4 Exchange Offer. In the event an Exchange Offer
Registration Statement (as defined in the Registration Rights Agreement) becomes
effective and the Issuer issues any Series B Capital Securities in the Exchange
Offer, the Guarantor will enter into a new capital securities guarantee
agreement, in substantially the same form as this Series A Capital Securities
Guarantee, with respect to the Series B Capital Securities.
SECTION 10.5 Benefit. This Series A Capital Securities Guarantee
is solely for the benefit of the Holders and, subject to Section 3.1(a), is not
separately transferable from the Series A Capital Securities.
SECTION 10.6 Governing Law. THIS SERIES A CAPITAL SECURITIES
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
20
<PAGE>
THIS SERIES A CAPITAL SECURITIES GUARANTEE is executed as of the day
and year first above written.
COMMONWEALTH EDISON COMPANY,
as Guarantor
By: Dennis O'Brien
--------------------------------------------------
Dennis O'Brien
Treasurer
WILMINGTON TRUST COMPANY,
Not in its individual capacity but solely as Capital
Securities Guarantee Trustee
By: W. Chris Sponenberg
--------------------------------------------------
Name: W. Chris Sponenberg
Title: Senior Financial Services Officer
<PAGE>
Exhibit (4)-11
Commonwealth Edison Company
Form S-4 File No. 333-
================================================================================
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
COMMONWEALTH EDISON COMPANY
and
WILMINGTON TRUST COMPANY
Dated as of _____________, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions................................................... 2
SECTION 1.2 Interpretation................................................ 5
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.............................. 6
SECTION 2.2 Lists of Holders of Securities................................ 6
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee........... 6
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee...... 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent.............. 7
SECTION 2.6 Events of Default; Waiver..................................... 7
SECTION 2.7 Event of Default; Notice...................................... 7
SECTION 2.8 Conflicting Interests......................................... 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee Trustee. 7
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee........ 9
SECTION 3.3 Not Responsible for Recitals or Issuance of Series B
Capital Securities Guarantee................................. 11
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility............. 11
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities
Guarantee Trustee............................................ 12
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee..................................................... 13
SECTION 5.2 Waiver of Notice and Demand................................... 13
SECTION 5.3 Obligations Not Affected...................................... 13
SECTION 5.4 Rights of Holders............................................. 14
</TABLE>
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<TABLE>
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<S> <C> <C>
SECTION 5.5 Guarantee of Payment.......................................... 15
SECTION 5.6 Subrogation................................................... 15
SECTION 5.7 Independent Obligations....................................... 15
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.................................... 15
SECTION 6.2 Ranking....................................................... 16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination................................................... 16
SECTION 7.2 Termination of Guarantee...................................... 16
ARTICLE VIII
COMPENSATION AND EXPENSES OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Exculpation................................................... 17
SECTION 9.2 Indemnification............................................... 17
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Successors and Assigns....................................... 18
SECTION 10.2 Amendments................................................... 18
SECTION 10.3 Notices...................................................... 18
SECTION 10.4 Benefit...................................................... 19
SECTION 10.5 Governing Law................................................ 19
</TABLE>
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<PAGE>
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
THIS SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT (the "Series B
Capital Securities Guarantee"), dated as of ___________, 1997, is executed and
delivered by Commonwealth Edison Company, an Illinois corporation (the
"Guarantor"), and Wilmington Trust Company, a Delaware banking corporation, as
trustee (the "Capital Securities Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of ComEd Financing II, a Delaware statutory business trust (the
"Issuer").
WITNESSETH:
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of January 24, 1997, among the trustees of the Issuer,
the Guarantor, as sponsor, and the holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer issued 150,000
capital securities, having an aggregate liquidation amount of $150,000,000, such
capital securities being designated the "8.50% Series A Capital Securities
(Liquidation Amount $1,000 per Capital Security)" (the "Old Capital
Securities");
WHEREAS, as incentive for the Holders to purchase the Old Capital
Securities, the Guarantor irrevocably and unconditionally agreed, to the extent
set forth in that certain Series A Capital Securities Guarantee dated as of
January 24, 1997 (the "Series A Capital Securities Guarantee"), to pay to the
Holders the Guarantee Payments (as defined below); and to make certain other
payments on the terms and conditions set forth therein;
WHEREAS, pursuant to that certain Registration Rights Agreement, dated
as of January 24, 1997 (the "Registration Rights Agreement"), among the
Guarantor, the Issuer and certain Purchasers named therein, the Guarantor and
the Issuer agreed that if the Guarantor and the Issuer filed a registration
statement (the "Registration Statement") to exchange the Series A Capital
Securities for a like aggregate Liquidation Amount of new 8.50% Series B Capital
Securities, Liquidation Amount $1,000 per Capital Security (the "New Capital
Securities" and, together with the Old Capital Securities, the "Capital
Securities"), then the Guarantor and the Issuer will simultaneously include in
the Registration Statement an offer to exchange the Series A Capital Securities
Guarantee for the Series B Capital Securities Guarantee for the benefit of the
Holders of the Capital Securities;
WHEREAS, on ___________, 1997, the Registration Statement was declared
effective under the Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, pursuant to the Registration Rights Agreement, the Guarantor
and the Issuer wish to exchange the Series A Capital Securities Guarantee for
the Series B Capital Securities Guarantee;
WHEREAS, the Series B Capital Securities Guarantee is substantially
identical to the Series A Capital Securities Guarantee except that the Series B
Capital Securities Guarantee is
<PAGE>
registered under the Securities Act pursuant to the Registration Statement and
the Series A Capital Securities Guarantee will not contain provisions
restricting transfer in the absence of registration under the Securities Act;
and
WHEREAS, as required by the Registration Rights Agreement, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Capital Securities the Guarantee
Payments and to make certain other payments on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby acknowledges shall benefit the Guarantor, the
Guarantor executes and delivers this Series B Capital Securities Guarantee for
the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions. In this Series B Capital Securities
Guarantee, unless the context otherwise requires, capitalized terms used in this
Series B Capital Securities Guarantee but not defined in the preamble above have
the respective meanings assigned to them in this Section 1.1; terms defined in
the Declaration as at the date of execution of this Series B Capital Securities
Guarantee have the same meaning when used in this Series B Capital Securities
Guarantee unless otherwise defined in this Series B Capital Securities
Guarantee; a term defined anywhere in this Series B Capital Securities Guarantee
has the same meaning throughout; and a term defined in the Trust Indenture Act
has the same meaning when used in this Series B Capital Securities Guarantee,
unless otherwise defined in this Series B Capital Securities Guarantee or unless
the context otherwise requires.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, or any successor rule thereunder.
"Business Day" means any day other than a Saturday or a Sunday, or a
day on which banking institutions in Wilmington, Delaware or New York, New York
are authorized or required by law or executive order to close.
"Capital Securities Guarantee Trustee" means Wilmington Trust Company,
a Delaware banking corporation, until a Successor Capital Securities Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the
terms of this Series B Capital Securities Guarantee and thereafter means each
such Successor Capital Securities Guarantee Trustee.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
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<PAGE>
"Corporate Trust Office" means the office of the Capital Securities
Guarantee Trustee at which the corporate trust business of the Capital
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Series B Capital
Securities Guarantee is located at Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890.
"Covered Person" means any Holder or beneficial owner of Capital
Securities.
"Debentures" means the series of subordinated debt securities of the
Guarantor designated the "8.50% Series B Subordinated Deferrable Interest
Debentures due January 15, 2027" held by the Property Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Series B Capital Securities Guarantee.
"Exchange Offer" means the Exchange Offer defined and described in the
Registration Rights Agreement.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by the Issuer: (i) any accumulated and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Capital
Securities to the extent the Issuer has funds on hand legally available therefor
at such time, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds on hand legally available therefor at such time, with
respect to any Capital Securities called for redemption by the Issuer, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Debentures to the
Holders in exchange for Capital Securities as provided in the Declaration), the
lesser of (a) the Liquidation Distribution and (b) the amount of assets of the
Issuer remaining available for distribution to Holders in liquidation of the
Issuer. If an Indenture Event of Default has occurred and is continuing, no
guarantee payments under the Common Securities Guarantee with respect to the
Common Securities or any guarantee payment under any Other Common Securities
Guarantees shall be made until the Holders shall be paid in full the Guarantee
Payments to which they are entitled under this Capital Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Capital Securities Guarantee Trustee,
any Affiliate of the Capital Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Capital Securities Guarantee Trustee.
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<PAGE>
"Indenture" means the Indenture dated as of September 1, 1995, among
the Guarantor (the "Debenture Issuer") and Wilmington Trust Company, as trustee
(the "Debenture Trustee"), as supplemented by the First Supplemental Indenture
dated as of September 19, 1995, between the Debenture Issuer and the Debenture
Trustee, the Second Supplemental Indenture and the Third Supplemental Indenture.
"Indenture Event of Default" shall mean any event specified in Section
6.01 of the Indenture.
"Liquidation Distribution" means the aggregate of the liquidation
amount and all accumulated and unpaid Distributions on the Capital Securities to
the date of payment.
"Majority in liquidation amount of the Series B Capital Securities"
means, except as provided by the Trust Indenture Act, a vote by Holder(s) of
more than 50% of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accumulated and
unpaid Distributions to the date upon which the voting percentages are
determined) of all Capital Securities.
"Officers' Certificate" means a certificate signed by any two of the
Chairman, a Vice Chairman, the Chief Executive Officer, the President, a Vice
President, the Comptroller, the Treasurer, the Secretary, an Assistant Treasurer
or an Assistant Secretary of the Guarantor. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Series B Capital Securities Guarantee (other than pursuant to Section 314(d)(4)
of the Trust Indenture Act) shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(c) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same meaning as
"Other Guarantees" in the Common Securities Guarantee.
"Other Guarantees" means all guarantees issued, or to be issued, by
the Guarantor with respect to capital securities similar to the Capital
Securities issued by other trusts established, or to be established, by the
Guarantor, in each case similar to the Issuer. "Other Guarantees" shall include
the Preferred Securities Guarantee Agreement dated as of September 26, 1995
issued by the Guarantor with respect to the 8.48% Trust Originated Preferred
Securities of ComEd Financing I.
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<PAGE>
"Other Indebtedness" means all subordinated notes, debentures or other
indebtedness issued by the Guarantor from time to time and sold to trusts
established, or to be established, by the Guarantor, in each case similar to the
Issuer. "Other Indebtedness" shall include the 8.48% Subordinated Deferrable
Interest Notes due September 30, 2035, issued by the Guarantor to ComEd
Financing I.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Capital Securities
Guarantee Trustee, the chairman of the board of directors, the president, any
vice president, the secretary, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or other officer of the Capital Securities Guarantee
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 that officer's knowledge of and familiarity with the particular
subject.
"Second Supplemental Indenture" means the Second Supplemental
Indenture dated as of January 24, 1997, between the Debenture Issuer and the
Debenture Trustee.
"Successor Capital Securities Guarantee Trustee" means a successor
Capital Securities Guarantee Trustee possessing the qualifications to act as
Capital Securities Guarantee Trustee under Section 4.1.
"Third Supplemental Indenture" means the Third Supplemental Indenture
dated as of ___________, 1997, between the Debenture Issuer and the Debenture
Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939.
"Trust Securities" means the Common Securities, the Series A Capital
Securities and the Series B Capital Securities, collectively.
SECTION 1.2 Interpretation. Each definition in this Series B Capital
Securities Guarantee Agreement includes the singular and the plural, and
references to the neuter gender include the masculine and feminine where
appropriate. Terms which relate to accounting matters shall be interpreted in
accordance with generally accepted accounting principles in effect from time to
time. All references to "the Series B Capital Securities Guarantee Agreement" or
"this Series B Capital Securities Guarantee Agreement" are to this Series B
Capital Securities Guarantee Agreement as modified, supplemented or amended from
time to time. References to any statute mean such statute as amended at the time
and include any successor legislation. The word "or" is not exclusive, and the
words "herein," "hereof" and "hereunder" refer to this Series B Capital
Securities Guarantee Agreement as a whole. The headings to the Articles and
Sections are for
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<PAGE>
convenience of reference and shall not affect the meaning or interpretation of
this Series B Capital Securities Guarantee Agreement. References to Articles
and Sections mean the Articles and Sections of this Series B Capital Securities
Guarantee Agreement unless otherwise specified.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application. (a) This Series B
Capital Securities Guarantee is subject to the provisions of the Trust Indenture
Act that are required to be part of this Series B Capital Securities Guarantee
and shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Series B Capital
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities. (a) The Guarantor shall
provide the Capital Securities Guarantee Trustee (unless the Capital Securities
Guarantee Trustee is otherwise the registrar of the Capital Securities) with a
list, in such form as the Capital Securities Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of
such date, (i) within ten Business Days after January 1 and June 30 of each
year, and (ii) at any other time within 30 days of receipt by the Guarantor of a
written request for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Capital Securities Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Capital Securities Guarantee Trustee by the
Guarantor. The Capital Securities Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Capital Securities Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee.
Within 60 days after May 15 of each year, commencing May 15, 1997, the Capital
Securities Guarantee Trustee shall provide to the Holders such reports as are
required by Section 313(a) of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Capital
Securities Guarantee Trustee shall also comply with the other requirements of
Section 313 of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee.
The Guarantor shall provide to the Capital Securities Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314
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<PAGE>
of the Trust Indenture Act. Delivery of such reports, information and documents
to the Capital Securities Guarantee Trustee is for informational purposes only
and the Capital Securities Guarantee Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Guarantor's
compliance with any of its covenants hereunder (as to which the Capital
Securities Guarantee Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Capital Securities Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Series B Capital Securities Guarantee that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver. The Holders of a Majority in
liquidation amount of the Capital Securities may, by vote, on behalf of all the
Holders, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Series B Capital Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice. (a) The Capital Securities
Guarantee Trustee shall, within 90 days after a Responsible Officer has
knowledge of the occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to all Holders, notices of all Events of Default actually
known to a Responsible Officer of the Capital Securities Guarantee Trustee,
unless such Events of Default have been cured before the giving of such notice,
provided, that, except in the case of default in the payment of any Guarantee
Payment, the Capital Securities Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, or a trust committee of directors and/or Responsible Officers of the
Capital Securities Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the holders of the Capital
Securities.
(b) The Capital Securities Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Capital Securities Guarantee
Trustee shall have received written notice from the Guarantor or a Holder, or a
Responsible Officer of the Capital Securities Guarantee Trustee charged with the
administration of the Declaration shall have obtained actual knowledge, of such
Event of Default.
SECTION 2.8 Conflicting Interests. The Declaration shall be deemed
to be specifically described in this Series B Capital Securities Guarantee for
the purposes of clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
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<PAGE>
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee
Trustee. (a) This Series B Capital Securities Guarantee shall be held by the
Capital Securities Guarantee Trustee for the benefit of the Holders, and the
Capital Securities Guarantee Trustee shall not transfer this Series B Capital
Securities Guarantee to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(b) or to a Successor Capital Securities Guarantee
Trustee on acceptance by such Successor Capital Securities Guarantee Trustee of
its appointment to act as Successor Capital Securities Guarantee Trustee. The
right, title and interest of the Capital Securities Guarantee Trustee shall
automatically vest in any Successor Capital Securities Guarantee Trustee, and
such vesting and succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Capital Securities Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Capital Securities Guarantee Trustee has occurred and is continuing, the
Capital Securities Guarantee Trustee shall enforce this Series B Capital
Securities Guarantee for the benefit of the Holders.
(c) The Capital Securities Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Series B Capital Securities Guarantee, and no implied covenants
shall be read into this Series B Capital Securities Guarantee against the
Capital Securities Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) and is actually
known to a Responsible Officer of the Capital Securities Guarantee Trustee, the
Capital Securities Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Series B Capital Securities Guarantee, and use the
same degree of care and skill in its exercise thereof as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Series B Capital Securities Guarantee shall
be construed to relieve the Capital Securities Guarantee Trustee from liability
for its own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Capital Securities
Guarantee Trustee shall be determined solely by the express provisions
of this Series B Capital Securities Guarantee, and the Capital
Securities Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Series B Capital Securities Guarantee, and no implied
covenants or obligations shall be read into this Series B Capital
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<PAGE>
Securities Guarantee against the Capital Securities Guarantee Trustee;
and
(B) in the absence of bad faith on the part of the Capital
Securities Guarantee Trustee, the Capital Securities Guarantee Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Capital Securities Guarantee Trustee and
conforming to the requirements of this Series B Capital Securities
Guarantee; but in the case of any such certificates or opinions that
by any provision hereof are specifically required to be furnished to
the Capital Securities Guarantee Trustee, the Capital Securities
Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Series B Capital Securities Guarantee;
(ii) the Capital Securities Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of the
Capital Securities Guarantee Trustee, unless it shall be proved that the
Capital Securities Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Capital Securities Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Capital Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Capital Securities Guarantee Trustee, or exercising any trust or power
conferred upon the Capital Securities Guarantee Trustee under this Series B
Capital Securities Guarantee; and
(iv) no provision of this Series B Capital Securities Guarantee shall
require the Capital Securities Guarantee Trustee to expend or risk its own
funds or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers, if the
Capital Securities Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Series B Capital Securities Guarantee
or indemnity, reasonably satisfactory to the Capital Securities Guarantee
Trustee, against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Capital Securities Guarantee Trustee may conclusively rely,
and shall be fully protected in acting or refraining from acting, upon any
resolution,
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<PAGE>
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this Series
B Capital Securities Guarantee may be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Series B Capital
Securities Guarantee, the Capital Securities Guarantee Trustee shall deem
it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Capital Securities
Guarantee Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Guarantor.
(iv) The Capital Securities Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Capital Securities Guarantee Trustee may consult with counsel
of its selection, and the advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include any of
its employees. The Capital Securities Guarantee Trustee shall have the
right at any time to seek instructions concerning the administration of
this Series B Capital Securities Guarantee from any court of competent
jurisdiction.
(vi) The Capital Securities Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Series B Capital Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Capital Securities
Guarantee Trustee such security and indemnity, reasonably satisfactory to
the Capital Securities Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the Capital
Securities Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Capital Securities Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the Capital Securities
Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Series B
Capital Securities Guarantee.
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(vii) The Capital Securities Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Capital Securities
Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(viii) The Capital Securities Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys, and
the Capital Securities Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Capital Securities Guarantee Trustee or
its agents hereunder shall bind the Holders, and the signature of the
Capital Securities Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Capital Securities
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Series B Capital Securities Guarantee, both of which
shall be conclusively evidenced by the Capital Securities Guarantee
Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Series B Capital Securities
Guarantee the Capital Securities Guarantee Trustee shall deem it desirable
to receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Capital Securities Guarantee Trustee
(i) may request instructions from the Holders of a Majority in liquidation
amount of the Capital Securities, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively relying on or acting
in accordance with such instructions.
(xi) The Capital Securities Guarantee Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Series
B Capital Securities Guarantee.
(b) No provision of this Series B Capital Securities Guarantee shall
be deemed to impose any duty or obligation on the Capital Securities Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Capital Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Capital Securities Guarantee
Trustee shall be construed to be a duty.
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SECTION 3.3 Not Responsible for Recitals or Issuance of Series B
Capital Securities Guarantee. The recitals contained in this Series B Capital
Securities Guarantee shall be taken as the statements of the Guarantor, and the
Capital Securities Guarantee Trustee does not assume any responsibility for
their correctness. The Capital Securities Guarantee Trustee makes no
representation as to the validity or sufficiency of this Series B Capital
Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility. (a)
There shall at all times be a Capital Securities Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least fifty
million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Capital Securities Guarantee Trustee shall
cease to be eligible to so act under Section 4.1(a), the Capital Securities
Guarantee Trustee shall immediately resign in the manner and with the effect set
out in Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital Securities Guarantee Trustee and the Guarantor shall
in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act, subject to the penultimate paragraph thereof.
SECTION 4.2 Appointment, Removal and Resignation of Capital
Securities Guarantee Trustee. (a) Subject to Section 4.2(b), the Capital
Securities Guarantee Trustee may be appointed or removed without cause at any
time by the Guarantor except during an Event of Default.
(b) The Capital Securities Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Capital Securities Guarantee
Trustee has been appointed and
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has accepted such appointment by written instrument executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guarantor.
(c) The Capital Securities Guarantee Trustee shall hold office until a
Successor Capital Securities Guarantee Trustee shall have been appointed or
until its removal or resignation. The Capital Securities Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Capital Securities Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take effect until a
Successor Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guarantor and the
resigning Capital Securities Guarantee Trustee.
(d) If no Successor Capital Securities Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of removal or resignation, the Capital
Securities Guarantee Trustee resigning or being removed may petition any court
of competent jurisdiction for appointment of a Successor Capital Securities
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Capital Securities Guarantee
Trustee.
(e) No Capital Securities Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Capital Securities Guarantee Trustee.
(f) Upon termination of this Series B Capital Securities Guarantee or
removal or resignation of the Capital Securities Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Capital Securities Guarantee
Trustee all amounts due to the Capital Securities Guarantee Trustee accrued to
the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of this Series B Capital Securities Guarantee and of any
liability to which it applies or may apply, presentment, demand for payment, any
right to require a proceeding first against the Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
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SECTION 5.3 Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Series B Capital Securities
Guarantee shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Capital Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Capital Securities or the
extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Capital Securities (other than
an extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sums payable that results from the
extension of any interest payment period on the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Capital
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.3 that the obligations of the Guarantor with
respect to the Guarantee Payments shall be absolute and unconditional under
any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders. (a) The Holders of a Majority in
liquidation amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Capital Securities Guarantee Trustee in respect of
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this Series B Capital Securities Guarantee or exercising any trust or power
conferred upon the Capital Securities Guarantee Trustee under this Series B
Capital Securities Guarantee provided, however, that, subject to the duties and
responsibilities of the Debenture Trustee pursuant to the Indenture, the Capital
Securities Guarantee Trustee shall have the right to decline to follow any such
direction if the Capital Securities Guarantee Trustee shall determine that the
action so directed would be unjustly prejudicial to the holders not taking part
in such direction or if the Capital Securities Guarantee Trustee being advised
by counsel determines that the action or proceeding so directed may not lawfully
be taken or if the Capital Securities Guarantee Trustee in good faith by its
board of directors or trustees, executive committee, or a trust committee of
directors or trustees and/or Responsible Officers shall determine that the
action or proceedings so directed would involve the Capital Securities Guarantee
Trustee in personal liability.
(b) If the Capital Securities Guarantee Trustee fails to enforce such
Series B Capital Securities Guarantee, any Holder may institute a legal
proceeding directly against the Guarantor to enforce the Capital Securities
Guarantee Trustee's rights under this Series B Capital Securities Guarantee,
without first instituting a legal proceeding against the Issuer, the Capital
Securities Guarantee Trustee or any other person or entity. The Guarantor
waives any right or remedy to require that any action be brought first against
the Issuer or any other person or entity before proceeding directly against the
Guarantor.
SECTION 5.5 Guarantee of Payment. This Series B Capital Securities
Guarantee creates a guarantee of payment and not of collection.
SECTION 5.6 Subrogation. The Guarantor shall be subrogated to all
(if any) rights of the Holders against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Series B Capital Securities
Guarantee; provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise any
right that it may acquire by way of subrogation or any indemnity, reimbursement
or other agreement, in all cases as a result of payment under this Series B
Capital Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Series B Capital Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 Independent Obligations. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Issuer with
respect to the Series B Capital Securities, and that the Guarantor shall be
liable as principal and as debtor hereunder to make Guarantee Payments pursuant
to the terms of this Series B Capital Securities Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (h), inclusive,
of Section 5.3 hereof.
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions. So long as any Capital
Securities remain outstanding, the Guarantor shall not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Guarantor's capital stock (which
includes common, preference and preferred stock) or (ii) make any payment of
principal, interest or premium, if any, on or repay or repurchase or redeem any
debt securities of the Guarantor (including any Other Indebtedness) that rank
pari passu with or junior in right of payment to the Debentures or (iii) make
any guarantee payments with respect to any guarantee by the Guarantor of any
securities of any subsidiary of the Guarantor (including Other Guarantees) if
such guarantee ranks pari passu or junior in right of payment to the Debentures,
if at such time (i) an Indenture Event of Default has occurred and is
continuing, (ii) there shall have occurred any event of which the Guarantor has
actual knowledge that (a) is, or with the giving of notice or the lapse of time,
or both, would be an Indenture Event of Default and (b) in respect of which the
Guarantor shall not have taken reasonable steps to cure, (iii) the Guarantor
shall be in default with respect to its payment of any obligations under this
Series B Capital Securities Guarantee or (iv) the Guarantor shall have given
notice of its election of the exercise of its right to extend the interest
payment period pursuant to Section 4.2 of the Third Supplemental Indenture, or
any extension thereof, and shall not have rescinded such notice, and such period
of interest payment extension, or any extension thereof, shall have commenced.
SECTION 6.2 Ranking. This Series B Capital Securities Guarantee will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to Senior Indebtedness (as defined in
the Second Supplemental Indenture), to the same extent and in the same manner
that the Debentures are subordinated to Senior Indebtedness pursuant to the
Second Supplemental Indenture, it being understood that the terms of Article VI
of the Second Supplemental Indenture shall apply to the obligations of the
Guarantor under this Series B Capital Securities Guarantee as if (x) such
Article VI were set forth herein in full and (y) such obligations were
substituted for the term "Debentures" appearing in such Article VI, (ii)
subordinate and junior in right of payment to the Debentures and any Other
Indebtedness, (iii) pari passu with the most senior preferred stock now or
hereafter issued by the Guarantor and with any Other Guarantees and any Other
Common Securities Guarantee and any guarantee now or hereafter entered into by
the Guarantor in respect of any preferred stock of any Affiliate of the
Guarantor, and (iv) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination. This Series B Capital Securities Guarantee
shall terminate (i) upon full payment of the applicable Redemption Price (as
defined in the Declaration)
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of all Capital Securities or (ii) upon full payment of the Liquidation Amount or
the distribution of the Debentures to the Holders of all of the Capital
Securities. Notwithstanding the foregoing, this Series B Capital Securities
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid under the
Capital Securities or under this Series B Capital Securities Guarantee.
SECTION 7.2 Termination of Guarantee. The Series A Capital
Securities Guarantee is hereby terminated and shall have no further force and
effect except insofar as required by Section 7.1 therein.
ARTICLE VIII
COMPENSATION AND EXPENSES OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
The Guarantor covenants and agrees to pay to the Capital Securities
Guarantee Trustee from time to time, and the Capital Securities Guarantee
Trustee shall be entitled to, such compensation as shall be agreed to in writing
between the Guarantor and the Capital Securities Guarantee Trustee (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust), and the Guarantor will pay or reimburse the
Capital Securities Guarantee Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Capital Securities
Guarantee Trustee in accordance with any of the provisions of this Capital
Securities Guarantee (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Guarantor also covenants to indemnify each of the
Capital Securities Guarantee Trustee (and its officers, agents, directors and
employees) for, and to hold it harmless against, any and all loss, damage,
claim, liability or expense including taxes (other than taxes based on the
income of the Capital Securities Guarantee Trustee) incurred without negligence
or bad faith on the part of the Capital Securities Guarantee Trustee and arising
out of or in connection with the acceptance or administration of this guarantee,
including the costs and expenses of defending itself against any claim of
liability in the premises. The obligations of the Guarantor under this Article
VIII to compensate and indemnify the Capital Securities Guarantee Trustee and to
pay or reimburse the Capital Securities Guarantee Trustee for expenses,
disbursements and advances shall be secured by a lien prior to that of the
Capital Securities upon all property and funds held or collected by the Capital
Securities Guarantee Trustee as such, except funds held in trust for the benefit
of the holders of particular Capital Securities.
The provisions of this Article shall survive the termination of this
Capital Securities Guarantee.
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ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Series B Capital Securities Guarantee and in a manner that
such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Series B Capital
Securities Guarantee or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 9.2 Indemnification. The Guarantor agrees to indemnify each
Indemnified Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 9.2 shall survive the
termination of this Series B Capital Securities Guarantee.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Successors and Assigns. All guarantees and agreements
contained in this Series B Capital Securities Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders then outstanding.
SECTION 10.2 Amendments. Except with respect to any changes that do
not materially adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Series B Capital Securities Guarantee may
only be amended with the prior approval of the Holders of a Majority in
liquidation amount of the Capital Securities. The provisions of the
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Declaration with respect to consents to amendments thereof (whether at a meeting
or otherwise) shall apply to the giving of such approval.
SECTION 10.3 Notices. All notices provided for in this Series B
Capital Securities Guarantee shall be in writing, duly signed by the party
giving such notice, and shall be delivered, telecopied or mailed by first class
mail, as follows:
(a) If given to the Issuer, in care of the Administrative Trustee at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Holders and the Capital Securities
Guarantee Trustee):
ComEd Financing II
c/o Commonwealth Edison Company
10 South Dearborn Street - 37th Floor
Chicago, Illinois 60603
Attention: Dennis F. O'Brien
Administrative Trustee
Telecopy: (312) 394-3110
(b) If given to the Capital Securities Guarantee Trustee, at the
Capital Securities Guarantee Trustee's mailing address set forth below (or
such other address as the Capital Securities Guarantee Trustee may give
notice of to the Holders and the Issuer):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telecopy:
(c) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to
the Holders and the Capital Securities Guarantee Trustee):
Commonwealth Edison Company
10 South Dearborn Street - 37th Floor
Chicago, Illinois 60603
Attention: Treasurer
Telecopy: (312) 394-3110
(d) If given to any Holder, at the address for such Holder set forth
on the books and records of the Issuer.
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All such notices shall be deemed to have been given when received in person,
telecopied with receipt confirmed, or mailed by first class mail, postage
prepaid except that if a notice or other document is refused delivery or cannot
be delivered because of a changed address of which no notice was given, such
notice or other document shall be deemed to have been delivered on the date of
such refusal or inability to deliver.
SECTION 10.4 Benefit. This Series B Capital Securities Guarantee is
solely for the benefit of the Holders and, subject to Section 3.1(a), is not
separately transferable from the Capital Securities.
SECTION 10.5 Governing Law. THIS SERIES B CAPITAL SECURITIES
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
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THIS SERIES B CAPITAL SECURITIES GUARANTEE is executed as of the day
and year first above written.
COMMONWEALTH EDISON COMPANY,
as Guarantor
By: ________________________________
Dennis O'Brien
Treasurer
WILMINGTON TRUST COMPANY,
Not in its individual capacity but solely
as Capital Securities Guarantee Trustee
By: _________________________________
Name:
Title:
<PAGE>
Exhibit (4)-12
Commonwealth Edison Company and ComEd Financing II
Form S-4 File No. 333-
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated January 24, 1997
among
COMMONWEALTH EDISON COMPANY
COMED FINANCING II
and
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
as Initial Purchasers
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. Definitions............................................................. 1
2. Registration Under the Securities Act................................... 5
(a) Exchange Offer..................................................... 5
(b) Shelf Registration................................................. 8
(c) Expenses........................................................... 9
(d) Effective Registration Statement................................... 10
(e) Postponement....................................................... 10
(f) Specific Enforcement............................................... 10
3. Registration Procedures................................................. 10
4. Indemnification and Contribution........................................ 18
5. Participation in Underwritten Registrations............................. 22
6. Selection of Underwriter................................................ 22
7. Miscellaneous........................................................... 22
(a) Rule 144 and Rule 144A............................................. 22
(b) No Inconsistent Agreements......................................... 23
(c) Amendments and Waivers............................................. 23
(d) Notices............................................................ 23
(e) Successors and Assigns............................................. 24
(f) Third Party Beneficiary............................................ 24
(g) Counterparts....................................................... 24
(h) Headings........................................................... 24
(i) GOVERNING LAW...................................................... 24
(j) Severability....................................................... 24
(k) Securities Held by the Company, the Trust or its Affiliates........ 25
</TABLE>
i
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of January 24, 1997 among Commonwealth Edison Company, an Illinois
corporation (the "Company"), ComEd Financing II, a business trust formed under
the laws of the state of Delaware (the "Trust"), and MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED ("Merrill Lynch") PAINEWEBBER INCORPORATED and
SALOMON BROTHERS INC (together with Merrill Lynch, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated January 17,
1997 (the "Purchase Agreement"), among the Company, as issuer of the 8.50%
Series A Subordinated Deferrable Interest Debentures due January 15, 2027 (the
"Subordinated Debentures"), the Trust and the Initial Purchasers, which provides
for, among other things, the sale by the Trust to the Initial Purchasers of
150,000 of the Trust's 8.50% Series A Capital Securities (Liquidation Amount
$1,000 per Capital Security) (the "Capital Securities") the proceeds of which
will be used by the Trust to purchase the Subordinated Debentures. The Capital
Securities, together with the Subordinated Debentures and the Company's
guarantee of the Capital Securities (the "Capital Securities Guarantee") are
collectively referred to as the "Securities". In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company and the Trust have
agreed to provide to the Initial Purchasers and their direct and indirect
transferees the registration rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the closing under the Purchase
Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"Applicable Period" shall have the meaning set forth in Section 3(t)
hereof.
"Business Day" means any day other than a Saturday, a Sunday, or a day
on which banking institutions in Wilmington, Delaware or New York, New York
are authorized or required by law or executive order to close.
"Closing Time" shall mean the Closing Time as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
"Declaration" or "Declaration of Trust" shall mean the Amended and
Restated Declaration of Trust, dated as of January 24, 1997, by the
trustees named therein and the Company as sponsor.
<PAGE>
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Trust; provided, however, that such depositary
must have an address in the Borough of Manhattan, in The City of New York.
"Effectiveness Period" shall have the meaning set forth in Section
2(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Exchange Offer" shall mean the offer by the Company and the Trust to
the Holders to exchange all of the Registrable Securities (other than
Private Exchange Securities) for a like principal amount of Exchange
Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2(a)
hereof.
"Exchange Securities" shall mean (i) with respect to the Subordinated
Debentures, the 8.50% Series B Subordinated Deferrable Interest Debentures
due January 15, 2027 (the "Exchange Debentures") containing terms identical
to the Subordinated Debentures (except that they will not contain terms
with respect to the transfer restrictions under the Securities Act and will
not require transfers thereof to be in minimum blocks of $100,000 principal
amount), (ii) with respect to the Capital Securities, the Trust's 8.50%
Series B Capital Securities (Liquidation Amount $1,000 per Capital
Security) (the "Exchange Capital Securities") which will have terms
identical to the Capital Securities (except they will not contain terms
with respect to transfer restrictions under the Securities Act and will not
require minimum transfers thereof to be in blocks of $100,000 liquidation
amount) and (iii) with respect to the Capital Securities Guarantee, the
Company's guarantee (the "Exchange Capital Securities Guarantee") of the
Exchange Capital Securities which will have terms identical to the Capital
Securities Guarantee.
"Holder" shall mean the Initial Purchasers, for so long as they own
any Registrable Securities, and each of their respective successors,
assigns and direct and indirect transferees who become registered owners of
Registrable Securities under the Indenture or the Declaration of Trust.
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"Indenture" shall mean the Indenture dated as of September 1, 1995
between the Company, as issuer, and Wilmington Trust Company, as trustee,
as supplemented by a First Supplemental Indenture dated as of September 19,
1995 and a Second Supplemental Indenture dated as of January 24, 1997, and
as the same may be further supplemented or amended from time to time in
accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the preamble
to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n) hereof.
"Issue Date" shall mean January 24, 1997.
"Majority Holders" shall mean the Holders of a majority of the
aggregate liquidation amount of outstanding Capital Securities.
"Participating Broker-Dealer" shall have the meaning set forth in
Section 3(t) hereof.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability company, or a government or
agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section 2(a)
hereof.
"Private Exchange Securities" shall have the meaning set forth in
Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble
to this Agreement.
"Records" shall have the meaning set forth in Section 3(n) hereof.
"Registrable Securities" shall mean the Securities and, if issued, the
Private Exchange Securities; provided, however, that Securities or Private
Exchange Securities, as the case may be, shall cease to be Registrable
Securities when (i) a Registration
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Statement with respect to such Securities or Private Exchange Securities
for the exchange or resale thereof, as the case may be, shall have been
declared effective under the Securities Act and such Securities or Private
Exchange Securities, as the case may be, shall have been disposed of
pursuant to such Registration Statement, (ii) such Securities or Private
Exchange Securities, as the case may be, shall have been sold to the public
pursuant to Rule 144(k) (or any similar provision then in force, but not
Rule 144A) under the Securities Act, (iii) such Securities or Private
Exchange Securities, as the case may be, shall have ceased to be
outstanding or (iv) with respect to the Securities, such Securities have
been exchanged for Exchange Securities upon consummation of the Exchange
Offer and are thereafter freely tradeable by the holder thereof (other than
an affiliate of the Company).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities
Dealers, Inc. (the "NASD") registration and filing fees, including, if
applicable, the fees and expenses of any "qualified independent
underwriter" (and its counsel) that is required to be retained by any
Holder of Registrable Securities in accordance with the rules and
regulations of the NASD, (ii) all fees and expenses incurred in connection
with compliance with state securities or blue sky laws (including
reasonable fees and disbursements of counsel for any underwriters or
Holders in connection with blue sky qualification of any of the Exchange
Securities or Registrable Securities) and compliance with the rules of the
NASD, (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus and any amendments or supplements thereto, and in
preparing or assisting in preparing, printing and distributing any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all
rating agency fees, (v) the fees and disbursements of counsel for the
Company and of the independent certified public accountants of the Company,
including the expenses of any "cold comfort" letters required by or
incident to such performance and compliance, (vi) the fees and expenses of
the Trustees, and any exchange agent or custodian, (vii) all fees and
expenses incurred in connection with the listing, if any, of any of the
Registrable Securities on any securities exchange or exchanges, and (viii)
the reasonable fees and expenses of any special experts retained by the
Company in connection with any Registration Statement.
"Registration Statement" shall mean any registration statement of the
Company and the Trust which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and
all amendments and supplements to any such Registration Statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
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<PAGE>
"Rule 144(k) Period" shall mean the period of three years (or such
shorter period as may hereafter be referred to in Rule 144(k) under the
Securities Act (or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble to this
Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in Section
2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company and the Trust pursuant to the provisions of
Section 2(b) hereof which covers all of the Registrable Securities or all
of the Private Exchange Securities, as the case may be, on an appropriate
form under Rule 415 under the Securities Act, or any similar rule that may
be adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Subordinated Debentures" shall have the meaning set forth in the
preamble to this Agreement.
"TIA" shall have the meaning set forth in Section 3(l) hereof.
"Trustees" shall mean any and all trustees with respect to (i) the
Capital Securities under the Declaration, (ii) the Subordinated Debentures
under the Indenture and (iii) the Capital Securities Guarantee.
2. Registration Under the Securities Act.
-------------------------------------
(a) Exchange Offer. To the extent not prohibited by any applicable
law or applicable interpretation of the staff of the SEC, the Company and the
Trust shall, for the benefit of the Holders, at the Company's cost, use their
best efforts to (i) cause to be filed with the SEC within 150 days after the
Issue Date an Exchange Offer Registration Statement on an appropriate form under
the Securities Act covering the Exchange Offer, (ii) cause such Exchange Offer
Registration Statement to be declared effective under the Securities Act by the
SEC not later than
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the date which is 180 days after the Issue Date, and (iii) keep such Exchange
Offer Registration Statement effective for not less than 30 calendar days (or
longer if required by applicable law) after the date notice of the Exchange
Offer is mailed to the Holders. Upon the effectiveness of the Exchange Offer
Registration Statement, the Company and the Trust shall promptly commence the
Exchange Offer, it being the objective of such Exchange Offer to enable each
Holder eligible and electing to exchange Registrable Securities for a like
principal amount of Exchange Debentures or a like liquidation amount of Exchange
Capital Securities, together with the Exchange Guarantee, as applicable
(assuming that such Holder is not an affiliate of the Company within the meaning
of Rule 405 under the Securities Act and is not a broker-dealer tendering
Registrable Securities acquired directly from the Company for its own account,
acquires the Exchange Securities in the ordinary course of such Holder's
business and has no arrangements or understandings with any Person to
participate in the Exchange Offer for the purpose of distributing the Exchange
Securities) to transfer such Exchange Securities from and after their receipt
without any limitations or restrictions under the Securities Act and under state
securities or blue sky laws.
In connection with the Exchange Offer, the Company and the Trust
shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of not
less than 30 days after the date notice thereof is mailed to the Holders
(or longer if required by applicable law) (such period referred to herein
as the "Exchange Period");
(iii) utilize the services of the Depositary for the Exchange Offer;
(iv) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York time, on the last Business Day of
the Exchange Period, by sending to the institution specified in the notice,
a telegram, telex, facsimile transmission or letter setting forth the name
of such Holder, the principal amount of Securities delivered for exchange,
and a statement that such Holder is withdrawing his election to have such
Securities exchanged;
(v) notify each Holder that any Security not tendered by such Holder
in the Exchange Offer will remain outstanding and continue to accrue
interest or accumulate distributions, as the case may be, but will not
retain any rights under this Agreement (except in the case of the Initial
Purchasers and Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
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<PAGE>
If any Initial Purchaser determines upon advice of its outside counsel
that it is not eligible to participate in the Exchange Offer with respect to the
exchange of Securities constituting any portion of an unsold allotment in the
initial distribution, as soon as practicable upon receipt by the Company and the
Trust of a written request from such Initial Purchaser, the Company and the
Trust, as applicable, shall issue and deliver to such Initial Purchaser in
exchange (the "Private Exchange") for the Securities held by such Initial
Purchaser, a like liquidation amount of Capital Securities of the Trust,
together with the Exchange Guarantee, or a like principal amount of the
Subordinated Debentures of the Company, as applicable, that are identical
(except that such securities may bear a customary legend with respect to
restrictions on transfer pursuant to the Securities Act) to the Exchange
Securities (the "Private Exchange Securities") and which are issued pursuant to
the Indenture, the Declaration or the Guarantee (which provides that the
Exchange Securities will not be subject to the transfer restrictions set forth
in the Indenture or the Declaration, as applicable, and that the Exchange
Securities, the Private Exchange Securities and the Securities will vote and
consent together on all matters as one class and that neither the Exchange
Securities, the Private Exchange Securities nor the Securities will have the
right to vote or consent as a separate class on any matter). The Private
Exchange Securities shall be of the same series as the Exchange Securities and
the Company and the Trust will seek to cause the CUSIP Service Bureau to issue
the same CUSIP Numbers for the Private Exchange Securities as for the Exchange
Securities issued pursuant to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer and, if
applicable, the Private Exchange, the Company and the Trust, as the case
requires, shall:
(i) accept for exchange all Securities or portions thereof tendered
and not validly withdrawn pursuant to the Exchange Offer or the Private
Exchange;
(ii) deliver, or cause to be delivered, to the applicable Trustee for
cancellation all Securities or portions thereof so accepted for exchange by
the Company; and
(iii) issue, and cause the applicable Trustee under the Indenture,
the Declaration or the Guarantee, as applicable, to promptly authenticate
and deliver to each Holder, new Exchange Securities or Private Exchange
Securities, as applicable, equal in principal amount to the principal
amount of the Subordinated Debentures or equal in liquidation amount to the
liquidation amount to the Capital Securities (together with the guarantee
thereof) as are surrendered by such Holder.
Distributions on each Exchange Capital Security and Private Exchange
Security, and interest on each Exchange Debenture, issued pursuant to the
Registered Exchange Offer and in the Private Exchange, as the case may be, will
accrue from the last date on which a Distribution or interest was paid on the
Capital Security or the Subordinated Debenture surrendered in exchange therefor
or, if no Distribution or interest has been paid on such Capital Security or
Subordinated Debenture, from the Issue Date. To the extent not prohibited by
any law or applicable interpretation of the staff of the SEC, the Company and
the Trust shall use their best efforts to complete the Exchange Offer as
provided above, and shall comply with the applicable
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<PAGE>
requirements of the Securities Act, the Exchange Act and other applicable laws
in connection with the Exchange Offer. The Exchange Offer shall not be subject
to any conditions, other than that the Exchange Offer does not violate
applicable law or any applicable interpretation of the staff of the SEC. Each
Holder of Registrable Securities who wishes to exchange such Registrable
Securities for Exchange Securities in the Exchange Offer will be required to
make certain customary representations in connection therewith, including, in
the case of any Holder of Capital Securities, representations that (i) it is not
an affiliate of the Trust or the Company, (ii) the Exchange Securities to be
received by it were acquired in the ordinary course of its business and (iii) at
the time of the Exchange Offer, it has no arrangement with any person to
participate in the distribution (within the meaning of the Securities Act) of
the Exchange Capital Securities. The Company and the Trust shall inform the
Initial Purchasers, after consultation with the Trustee, of the names and
addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchasers shall have the right to contact such Holders and otherwise facilitate
the tender of Registrable Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply, mutatis
mutandis, solely with respect to Registrable Securities that are Private
Exchange Securities and Exchange Securities held by Participating Broker-
Dealers, and the Company and the Trust shall have no further obligation to
register the Registrable Securities (other than Private Exchange Securities)
pursuant to Section 2(b) of this Agreement.
(b) Shelf Registration. In the event that:
------------------
(i) the Company, the Trust or the Majority Holders reasonably
determine, after conferring with counsel (which may be in-house
counsel), that the Exchange Offer Registration provided in Section
2(a) above is not available because of any change in law or in
currently prevailing interpretations of the staff of the SEC;
(ii) the Exchange Offer Registration Statement is not declared
effective within 180 days of the Issue Date; or
(iii) upon the request of any Initial Purchaser with respect to
any Registrable Securities held by it, if such Initial Purchaser is not
permitted, in the reasonable opinion of Winston & Strawn, pursuant to
applicable law or applicable interpretations of the staff of the SEC, to
participate in the Exchange Offer and thereby receive securities that are
freely tradeable without restriction under the Securities Act and
applicable blue sky or state securities laws (any of the events specified
in (i)-(iii) being a "Shelf Registration Event" and the date of occurrence
thereof, the "Shelf Registration Event Date"),
the Company and the Trust shall, at their cost, use their best efforts to cause
to be filed as promptly as practicable after such Shelf Registration Event Date,
as the case may be, and, in any event, subject to Section 2(e) hereof, within 45
days after such Shelf Registration Event Date
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<PAGE>
(which shall be no earlier than 75 days after the Closing Time), a Shelf
Registration Statement providing for the sale by the Holders of all of the
Registrable Securities, and shall use their best efforts to have such Shelf
Registration Statement declared effective by the SEC as soon as practicable. No
Holder of Registrable Securities shall be entitled to include any of its
Registrable Securities in any Shelf Registration pursuant to this Agreement
unless and until such Holder agrees in writing to be bound by all of the
provisions of this Agreement applicable to such Holder and furnishes to the
Company and the Trust in writing, within 15 days after receipt of a request
therefor, such information as the Company and the Trust may, after conferring
with counsel with regard to information relating to Holders that would be
required by the SEC to be included in such Shelf Registration Statement or
Prospectus included therein, reasonably request for inclusion in any Shelf
Registration Statement or Prospectus included therein. Each Holder as to which
any Shelf Registration is being effected agrees to furnish to the Company and
the Trust all information with respect to such Holder necessary to make the
information previously furnished to the Company by such Holder not materially
misleading.
The Company and the Trust agree to use their best efforts to keep the
Shelf Registration Statement continuously effective for the Rule 144(k) Period
(subject to extension pursuant to the last paragraph of Section 3 hereof) (180
days in the case of a Shelf Registration Statement filed at the request of an
Initial Purchaser) or for such shorter period which will terminate when all of
the Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement or cease to be outstanding
(the "Effectiveness Period"). The Company and the Trust shall not permit any
securities other than Registrable Securities to be included in the Shelf
Registration. The Company and the Trust will, in the event a Shelf Registration
Statement is declared effective, provide to each Holder a reasonable number of
copies of the Prospectus which is a part of the Shelf Registration Statement,
notify each such Holder when the Shelf Registration has become effective and use
its best efforts to take certain other actions as are required to permit certain
unrestricted resales of the Registrable Securities. The Company and the Trust
further agree, if necessary, to supplement or amend the Shelf Registration
Statement, if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement
or by the Securities Act or by any other rules and regulations thereunder for
shelf registrations, and the Company and the Trust agree to furnish to the
Holders of Registrable Securities copies of any such supplement or amendment
promptly after its being used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) or 2(b) hereof and
will reimburse the Initial Purchasers for the reasonable fees and disbursements
of Winston & Strawn, counsel for the Initial Purchasers, incurred in connection
with the Exchange Offer and, if applicable, the Private Exchange Offer, and
either Winston & Strawn or any one other counsel designated in writing by the
Majority Holders to act as counsel for the Holders of the Registrable Securities
in connection with a Shelf Registration Statement, which other counsel shall be
reasonably satisfactory to the Company. Except as provided herein, each Holder
shall pay all expenses of its counsel, underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to the Shelf Registration Statement.
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<PAGE>
(d) Effective Registration Statement. An Exchange Offer Registration
Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC; provided, however, that if,
after it has been declared effective, the offering of Registrable Securities
pursuant to a Shelf Registration Statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other governmental
agency or court, such Registration Statement will be deemed not to have been
effective during the period of such interference, until the offering of
Registrable Securities pursuant to such Registration Statement may legally
resume. The Company and the Trust will be deemed not to have used their best
efforts to cause the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, to become, or to remain, effective
during the requisite period if either of them voluntarily takes any action that
would result in any such Registration Statement not being declared effective or
in the Holders of Registrable Securities covered thereby not being able to
exchange or offer and sell such Registrable Securities during that period unless
such action is required by applicable law.
(e) Postponement. The Company shall be entitled to postpone for up to
60 days the filing of any Shelf Registration Statement otherwise required to be
prepared and filed pursuant to Section 2(b), if the Company determines, in its
good faith reasonable judgment, that such registration and the transfer of
Registrable Securities contemplated thereby would materially interfere with, or
require premature disclosure of, any material financing, acquisition or
reorganization involving the Company or any of its affiliates and the Company
promptly gives the Holders notice of such determination.
(f) Specific Enforcement. Without limiting the remedies available to
the Holders, the Company and the Trust acknowledge that any failure by the
Company or the Trust to comply with its obligations under Section 2(a) and
Section 2(b) hereof may result in material irreparable injury to the Holders for
which there is no adequate remedy at law, that it would not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, any Holder may obtain such relief as may be required to specifically
enforce the Company's and the Trust's obligations under Section 2(a) and Section
2(b) hereof.
3. Registration Procedures. In connection with the obligations of
the Company and the Trust with respect to the Registration Statements pursuant
to Sections 2(a) and 2(b) hereof, the Company and the Trust shall use their best
efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be selected
by the Company and the Trust, (ii) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Securities by
the selling Holders thereof and (iii) shall comply as to form in all
material respects with the requirements of the applicable form and include
all financial statements required by the SEC to be filed therewith; and use
its best efforts to cause such Registration Statement to become effective
10
<PAGE>
and remain effective in accordance with Section 2 hereof; provided,
however, that if (1) such filing is pursuant to Section 2(b), or (2) a
Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2(a) is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities, before filing any Registration Statement or Prospectus or any
amendments or supplements thereto, the Company and the Trust shall furnish
to and afford the Holders of the Registrable Securities and each such
Participating Broker-Dealer, as the case may be, covered by such
Registration Statement, their counsel and the managing underwriters, if
any, a reasonable opportunity to review copies of all such documents
(including copies of any previously filed documents to be incorporated by
reference therein) proposed to be filed. The Company and the Trust shall
not file any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders must be afforded an
opportunity to review prior to the filing of such document if the Majority
Holders or such Participating Broker-Dealer, as the case may be, their
counsel or the managing underwriters, if any, shall reasonably object;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the Effectiveness Period or the
Applicable Period, as the case may be; and cause each Prospectus to be
supplemented, if so determined by the Company or the Trust or requested by
the SEC, by any required prospectus supplement and as so supplemented to be
filed pursuant to Rule 424 (or any similar provision then in force) under
the Securities Act, and comply with the provisions of the Securities Act,
the Exchange Act and the rules and regulations promulgated thereunder
applicable to it with respect to the disposition of all securities covered
by each Registration Statement during the Effectiveness Period or the
Applicable Period, as the case may be, in accordance with the intended
method or methods of distribution by the selling Holders thereof described
in this Agreement (including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities included in the Shelf Registration Statement, at
least three Business Days prior to filing, that a Shelf Registration
Statement with respect to the Registrable Securities is being filed and
advising such Holder that the distribution of Registrable Securities will
be made in accordance with the method selected by the Majority Holders; and
(ii) furnish to each Holder of Registrable Securities included in the Shelf
Registration Statement and to each underwriter of an underwritten offering
of Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter
may reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) consent to the use of
the Prospectus or any amendment or supplement thereto by each of the
selling Holders of Registrable Securities included in the Shelf
Registration Statement in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
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<PAGE>
(d) in the case of a Shelf Registration, use its best efforts to
register or qualify the Registrable Securities under all applicable state
securities or "blue sky" laws of such jurisdictions by the time the
applicable Registration Statement is declared effective by the SEC as any
Holder of Registrable Securities covered by a Registration Statement and
each underwriter of an underwritten offering of Registrable Securities
shall reasonably request in writing in advance of such date of
effectiveness, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder and underwriter to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Company and
the Trust shall not be required to (i) qualify as a foreign corporation or
as a dealer in securities in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3(d), (ii) file any general
consent to service of process in any jurisdiction where it would not
otherwise be subject to such service of process or (iii) subject itself to
taxation in any such jurisdiction if it is not then so subject;
(e) in the case of (1) a Shelf Registration or (2) Participating
Broker-Dealers from whom the Company or the Trust has received prior
written notice that they will be utilizing the Prospectus contained in the
Exchange Offer Registration Statement as provided in Section 3(t) hereof,
notify each Holder of Registrable Securities, or such Participating Broker-
Dealers, as the case may be, their counsel and the managing underwriters,
if any, promptly and promptly confirm such notice in writing (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request by
the SEC or any state securities authority for amendments and supplements to
a Registration Statement or Prospectus or for additional information after
the Registration Statement has become effective, (iii) of the issuance by
the SEC or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the qualification of the
Registrable Securities or the Exchange Securities to be offered or sold by
any Participating Broker-Dealer in any jurisdiction described in paragraph
3(d) hereof or the initiation of any proceedings for that purpose, (iv) in
the case of a Shelf Registration, if, between the effective date of a
Registration Statement and the closing of any sale of Registrable
Securities covered thereby, the representations and warranties of the
Company and the Trust contained in any purchase agreement, securities sales
agreement or other similar agreement, if any cease to be true and correct
in all material respects, (v) of the happening of any event or the failure
of any event to occur or the discovery of any facts or otherwise, during
the Effectiveness Period which makes any statement made in such
Registration Statement or the related Prospectus untrue in any material
respect or which causes such Registration Statement or Prospectus to omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and
(vi) the Company and the Trust's reasonable determination that a post-
effective amendment to the Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
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(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities included within the coverage of such Shelf
Registration Statement, without charge, at least one conformed copy of each
Registration Statement relating to such Shelf Registration and any post-
effective amendment thereto (without documents incorporated therein by
reference, unless requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends and in such denominations (consistent
with the provisions of the Indenture and the Declaration) and registered in
such names as the selling Holders or the underwriters may reasonably
request at least two Business Days prior to the closing of any sale of
Registrable Securities pursuant to such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its best
efforts to prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and to notify each Holder to suspend use of the
Prospectus as promptly as practicable after the occurrence of such an
event, and each Holder hereby agrees to suspend use of the Prospectus until
the Company has amended or supplemented the Prospectus to correct such
misstatement or omission;
(j) in the case of a Shelf Registration, as promptly as practicable
after the filing of any document which is incorporated by reference into
the Registration Statement or Prospectus after the initial filing of a
Registration Statement, provide a reasonable number of copies of such
document to the Holders at their request; and make a financial
representative of the Company available for discussion of such document;
(k) obtain a CUSIP number for all Exchange Capital Securities and the
Capital Securities (and if the Trust has made a distribution of the
Subordinated Debentures to the Holders of the Capital Securities, the
Subordinated Debentures or the Exchange Subordinated Debentures) as the
case may be, not later than the effective date of a Registration Statement,
and provide the Trustee with printed certificates for the Exchange
Securities or the Registrable Securities, as the case may be, in a form
eligible for deposit with the Depositary;
(l) cause the Indenture, the Declaration, the Guarantee and the
Exchange Guarantee to be qualified under the Trust Indenture Act of 1939
(the "TIA") in connection with the registration of the Exchange Securities
or Registrable Securities, as the case may
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be, and effect such changes to such documents as may be required for them
to be so qualified in accordance with the terms of the TIA and execute, and
use its best efforts to cause the relevant trustee to execute, all
documents as may be required to effect such changes, and all other forms
and documents required to be filed with the SEC to enable such documents to
be so qualified in a timely manner;
(m) in the case of a Shelf Registration, enter into such agreements
(including underwriting agreements) as are customary in underwritten
offerings and take all such other appropriate actions as are reasonably
requested in order to expedite or facilitate the registration or the
disposition of such Registrable Securities, and in such connection, whether
or not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration, if requested by (x) any
Initial Purchaser, in the case where an Initial Purchaser holds Securities
acquired by it as part of its initial distribution and (y) other Holders of
Securities covered thereby: (i) make such representations and warranties
to Holders of such Registrable Securities and the underwriters (if any),
with respect to the business of the Trust, the Company and its subsidiaries
as then conducted and the Registration Statement, Prospectus and documents,
if any, incorporated or deemed to be incorporated by reference therein, in
each case, similar to those contained in the Purchase Agreement (modified
to reflect the filing of a registration statement under the Securities
Act), and confirm the same if and when requested; (ii) obtain opinions of
counsel to the Company and the Trust and updates thereof (which may be in
the form of a reliance letter) in form and substance reasonably
satisfactory to the managing underwriters (if any) and the Holders of a
majority in principal amount of the Registrable Securities being sold,
addressed to each selling Holder and the underwriters (if any) covering
matters similar in content to those set forth in the Purchase Agreement
(modified to reflect the filing of a registration statement under the
Securities Act); (iii) obtain "cold comfort" letters and updates thereof in
form comparable to those heretofore customarily provided by the Company in
underwritten public offerings of its debt securities and in substance
reasonably satisfactory to the managing underwriters from the independent
certified public accountants of the Company and the Trust (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company and the Trust or of any business acquired by the
Company and the Trust for which financial statements and financial data
are, or are required to be, included in the Registration Statement),
addressed to each of the underwriters; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in Section
4 hereof with respect to all parties to be indemnified pursuant to said
Section (including, without limitation, such underwriters and selling
Holders). The above shall be done at each closing under such underwriting
agreement, or as and to the extent required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section 2(b) or
(2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, make reasonably available
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<PAGE>
for inspection by any selling Holder of such Registrable Securities being
sold, or each such Participating Broker-Dealer, as the case may be, any
underwriter participating in any such disposition of Registrable
Securities, if any, and any attorney, accountant or other agent retained by
any such selling Holder or each such Participating Broker-Dealer, as the
case may be, or underwriter (collectively, the "Inspectors"), at the
offices where normally kept, during reasonable business hours, such
financial and other records, pertinent corporate documents and properties
of the Trust, the Company and its subsidiaries (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise
customary due diligence responsibilities, and cause the officers, directors
and employees of the Trust, the Company and its subsidiaries to supply all
relevant information in each case reasonably requested by any such
Inspector in connection with such Registration Statement, provided,
however, that the foregoing inspection and information gathering shall be
coordinated on behalf of the Purchasers by the Representatives and on
behalf of the other parties, by one counsel designated by the
Representatives and on behalf of such other parties as described in Section
2(c) hereof. Records which the Company and the Trust determine, in good
faith, to be confidential and any records which it notifies the Inspectors
are confidential shall not be disclosed by the Inspectors unless (i) the
disclosure of such Records is necessary to avoid or correct a material
misstatement or omission in such Registration Statement, (ii) the release
of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction or is necessary in connection with any
action, suit or proceeding or (iii) the information in such Records has
been made generally available to the public. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will be
required to agree in writing that information obtained by it as a result of
such inspections shall be deemed confidential and shall not be used by it
as the basis for any market transactions in the securities of the Trust or
the Company unless and until such is made generally available to the
public. Each selling Holder of such Registrable Securities and each such
Participating Broker-Dealer will be required to further agree in writing
that it will, upon learning that disclosure of such Records is sought in a
court of competent jurisdiction, give notice to the Company and allow the
Company at its expense to undertake appropriate action to prevent
disclosure of the Records deemed confidential;
(o) comply with all applicable rules and regulations of the SEC so
long as any provision of this Agreement shall be applicable and make
generally available to its securityholders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no
later than 45 days after the end of any 12-month period (or 90 days after
the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable Securities
are sold to underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company
after the effective date of a Registration Statement, which statements
shall cover said 12-month periods;
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<PAGE>
(p) upon consummation of an Exchange Offer or a Private Exchange, if
requested by a Trustee, obtain an opinion or opinions of counsel to the
Company addressed to the Trustee for the benefit of all Holders of
Registrable Securities participating in the Exchange Offer or the Private
Exchange, as the case may be, and which includes an opinion that (i) the
Company and the Trust, as the case requires, has duly authorized, executed
and delivered the Exchange Securities and Private Exchange Securities, and
(ii) each of the Exchange Securities or the Private Exchange Securities, as
the case may be, constitute a legal, valid and binding obligation of the
Company or the Trust, as the case requires, enforceable against the Company
or the Trust, as the case requires, in accordance with its respective terms
(in each case, with customary or otherwise appropriate exceptions including
those pertaining to enforcement of equitable remedies and to events of
bankruptcy);
(q) if an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Securities by Holders to the Company or
the Trust, as applicable (or to such other Person as directed by the
Company or the Trust, respectively), in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be, the
Company or the Trust, as applicable, shall mark, or cause to be marked, on
such Registrable Securities delivered by such Holders that such Registrable
Securities are being cancelled in exchange for the Exchange Securities or
the Private Exchange Securities, as the case may be; in no event shall such
Registrable Securities be marked as paid or otherwise satisfied;
(r) cooperate with each seller of Registrable Securities covered by
any Registration Statement and each underwriter, if any, participating in
the disposition of such Registrable Securities and their respective counsel
in connection with any filings required to be made with the NASD;
(s) use its best efforts to take all other steps necessary to effect
the registration of the Registrable Securities covered by a Registration
Statement contemplated hereby;
(t) (A) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section entitled
"Plan of Distribution," which section shall be reasonably acceptable to the
Initial Purchasers or another representative of the Participating Broker-
Dealers, and which shall contain a summary statement of the positions taken
or policies made by the staff of the SEC with respect to the potential
"underwriter" status of any broker-dealer (a "Participating Broker-Dealer")
that holds Registrable Securities acquired for its own account as a result
of market-making activities or other trading activities and that will be
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Securities to be received by such broker-dealer in the Exchange
Offer, whether such positions or policies have been publicly disseminated
by the staff of the SEC or such positions or policies, in the reasonable
judgment of the Initial Purchasers or such other representative, represent
the prevailing views of the staff of the SEC, including a statement that
any such broker-dealer who receives Exchange
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<PAGE>
Securities for Registrable Securities pursuant to the Exchange Offer may be
deemed a statutory underwriter and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Securities, (ii) furnish to each Participating Broker-Dealer who
has delivered to the Company the notice referred to in Section 3(e),
without charge, as many copies of each Prospectus included in the Exchange
Offer Registration Statement, including any preliminary prospectus, and any
amendment or supplement thereto, as such Participating Broker-Dealer may
reasonably request (each of the Company and the Trust hereby consents to
the use of the Prospectus forming part of the Exchange Offer Registration
Statement or any amendment or supplement thereto by any Person subject to
the prospectus delivery requirements of the Securities Act, including all
Participating Broker-Dealers, in connection with the sale or transfer of
the Exchange Securities covered by the Prospectus or any amendment or
supplement thereto), (iii) use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the Prospectus
contained therein in order to permit such Prospectus to be lawfully
delivered by all Persons subject to the prospectus delivery requirements of
the Securities Act for such period of time as such Persons must comply with
such requirements under the Securities Act and applicable rules and
regulations in order to resell the Exchange Securities; provided, however,
that such period shall not be required to exceed 180 days (or such longer
period if extended pursuant to the last sentence of Section 3 hereof) (the
"Applicable Period"), and (iv) include in the transmittal letter or similar
documentation to be executed by an exchange offeree in order to participate
in the Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding Registrable
Securities acquired for its own account as a result of market-making
activities or other trading activities, it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any
resale of Exchange Securities received in respect of such Registrable
Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer
will not be deemed to admit that it is an underwriter within the meaning of
the Securities Act; and
(B) in the case of any Exchange Offer Registration Statement, the
Company and the Trust agree to deliver to the Initial Purchasers or to
another representative of the Participating Broker-Dealers, if requested by
any such Initial Purchasers or such other representative of the
Participating Broker-Dealers, on behalf of the Participating Broker-Dealers
upon consummation of the Exchange Offer (i) an opinion of counsel in form
and substance reasonably satisfactory to the Initial Purchasers or such
other representative of the Participating Broker-Dealers, covering matters
similar in content to those set forth in the Purchase Agreement (modified
to reflect the filing of a registration statement under the Securities Act)
(it being agreed that the matters to be covered by such
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<PAGE>
opinion may be subject to customary qualifications and exceptions), (ii) an
officers' certificate containing certifications substantially similar to
those set forth in Section 4(c) of the Purchase Agreement and such
additional certifications as are customarily delivered in a public offering
of debt securities and (iii) as well as upon the effectiveness of the
Exchange Offer Registration Statement, a comfort letter comparable to those
heretofore customarily provided by the Company in underwritten public
offerings of its debt securities.
The Company or the Trust may require each seller of Registrable
Securities as to which any registration is being effected to furnish to the
Company or the Trust, as applicable, such information regarding such seller as
may be required by the staff of the SEC to be included in a Registration
Statement. The Company or the Trust may exclude from such registration the
Registrable Securities of any seller who unreasonably fails to furnish such
information within a reasonable time after receiving such request. The Company
shall have no obligation to register under the Securities Act the Registrable
Securities of a seller who so fails to furnish such information.
In the case of (1) a Shelf Registration Statement or (2) Participating
Broker-Dealers who have notified the Company and the Trust that they will be
utilizing the Prospectus contained in the Exchange Offer Registration Statement
as provided in Section 3(t) hereof, are seeking to sell Exchange Securities and
are required to deliver Prospectuses, each Holder agrees that, upon receipt of
any notice from the Company or the Trust of the happening of any event of the
kind described in Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to a Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof or until
it is advised in writing (the "Advice") by the Company and the Trust that the
use of the applicable Prospectus may be resumed, and, if so directed by the
Company and the Trust, such Holder will deliver to the Company or the Trust (at
the Company's or the Trust's expense, as the case requires) all copies in such
Holder's possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities or Exchange
Securities, as the case may be, current at the time of receipt of such notice.
If the Company or the Trust shall give any such notice to suspend the
disposition of Registrable Securities or Exchange Securities, as the case may
be, pursuant to a Registration Statement, the Company and the Trust shall use
their best efforts to file and have declared effective (if an amendment) as soon
as practicable an amendment or supplement to the Registration Statement and
shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days in the
period from and including the date of the giving of such notice to and including
the date when the Company and the Trust shall have made available to the Holders
(x) copies of the supplemented or amended Prospectus necessary to resume such
dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) In connection with any
Registration Statement, the Company and the Trust shall, jointly and severally,
indemnify and hold harmless each Initial Purchaser, each Holder, each
underwriter who participates in an offering of the
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<PAGE>
Registrable Securities, each Participating Broker-Dealer, each Person, if any,
who controls any of such parties within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and each of their respective
directors, officers, employees and agents, as follows:
(i) from and against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto), covering Registrable
Securities or Exchange Securities, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) from and against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any court or governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the prior written consent of the Company; and
(iii) agrees to reimburse each such indemnified party for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred;
provided, however, that (i) this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished in writing to the
Company or the Trust by such Holder, such Participating Broker-Dealer or any
underwriter, expressly for use in the Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto) and (ii) the
Company and the Trust shall not be liable to any such Holder, Participating
Broker-Dealer, any underwriter or controlling person, with respect to any untrue
statement or alleged untrue statement or omission or alleged omission in any
preliminary Prospectus to the extent that any such loss, liability, claim,
damage or expense of any Holder, Participating Broker-Dealer, any underwriter or
controlling person results from the fact that such Holder, any underwriter or
Participating Broker-Dealer sold Securities to a person to whom there was not
sent or given, at or prior to the written confirmation of such sale, a copy of
the final Prospectus as then amended or supplemented if the Company had
previously furnished copies thereof to such Holder, underwriter or Participating
Broker-Dealer and the loss, liability, claim, damage or expense of such Holder,
underwriter, Participating Broker-Dealer or controlling person results from an
untrue statement or omission of a material fact contained in the preliminary
Prospectus which was corrected in the final Prospectus. Any
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<PAGE>
amounts advanced by the Company or the Trust to an indemnified party pursuant to
this Section 4 as a result of such losses shall be returned to the Company or
the Trust if it shall be finally determined by such a court in a judgment not
subject to appeal or final review that such indemnified party was not entitled
to indemnification by the Company or the Trust.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Trust, any underwriter and the other selling
Holders and each of their respective directors, officers (including each officer
of the Company and the Trust who signed the Registration Statement), employees
and agents and each Person, if any, who controls the Company, the Trust, any
underwriter or any other selling Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
loss, liability, claim, damage and expense whatsoever described in the indemnity
contained in Section 4(a) hereof, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company or the Trust by such selling Holder expressly for use
in the Registration Statement (or any amendment thereto), or any such Prospectus
(or any amendment or supplement thereto); provided, however, that, in the case
of a Shelf Registration Statement, no such Holder shall be liable for any amount
hereunder in excess of the amount by which the net proceeds received by such
Holder from the sale of Registrable Securities pursuant to such Shelf
Registration Statement exceeds the amount of any damages which such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
(c) Promptly after receipt by an indemnified party under this Section
4 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 4, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 4. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party, unless the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will not be
liable to such indemnified party under this Section 4 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed separate
counsel in connection with the assertion of legal defenses in accordance with
the next preceding sentence (it being understood, however, that in no event
shall the indemnifying party be liable for the fees and
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<PAGE>
expenses of more than one separate counsel (in addition to local counsel),
approved by Merrill Lynch in the case of subparagraph (a), representing all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances), (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party; and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii). No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4 (whether or
not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Trust, and
the Holders shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company, the Trust and the Holders, as incurred; provided that
no Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any Person that
was not guilty of such fraudulent misrepresentation. As between the Company,
the Trust and the Holders, such parties shall contribute to such aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity agreement in such proportion as shall be appropriate to reflect
the relative fault of the Company and Trust, on the one hand, and the Holders,
on the other hand, with respect to the statements or omissions which resulted in
such loss, liability, claim, damage or expense, or action in respect thereof, as
well as any other relevant equitable considerations. The relative fault of the
Company and the Trust, on the one hand, and of the Holders, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Trust, on the one hand, or by or on behalf of the Holders, on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Trust and the
Holders of the Registrable Securities agree that it would not be just and
equitable if contribution pursuant to this Section 4 were to be determined by
pro rata allocation or by any other method of allocation that does not take into
account the relevant equitable considerations. For purposes of this Section 4,
each affiliate of a Holder, and each director, officer, employee, agent and
Person, if any, who controls a Holder or such affiliate within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Holder, and each director of
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each of the Company or the Trust, each officer of each of the Company or the
Trust who signed the Registration Statement, and each Person, if any, who
controls each of the Company and the Trust within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same rights
to contribution as each of the Company or the Trust.
5. Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents reasonably required under the terms of such underwriting
arrangements.
6. Selection of Underwriters. The Holders of Registrable Securities
covered by the Shelf Registration Statement who desire to do so may sell the
securities covered by such Shelf Registration in an underwritten offering. In
any such underwritten offering, the underwriter or underwriters and manager or
managers that will administer the offering will be selected by the Holders of a
majority in aggregate principal amount of the Registrable Securities included in
such offering; provided, however, that such underwriters and managers must be
reasonably satisfactory to the Company and the Trust.
7. Miscellaneous.
-------------
(a) Rule 144 and Rule 144A. For so long as the Company or the Trust
is subject to the reporting requirements of Section 13 or 15 of the Exchange Act
and any Registrable Securities remain outstanding, the Company and the Trust, as
the case may be, will use its best efforts to file the reports required to be
filed by it under the Securities Act and Section 13(a) or 15(d) of the Exchange
Act and the rules and regulations adopted by the SEC thereunder, or, if it
ceases to be so required to file such reports, it will, upon the request of any
Holder of Registrable Securities (a) make publicly available such information as
is necessary to permit sales of securities of the Company and the Trust pursuant
to Rule 144 under the Securities Act, (b) deliver such information to a
prospective purchaser as is necessary to permit sales of securities of the
Company and the Trust pursuant to Rule 144A under the Securities Act and it will
take such further action as any Holder of Registrable Securities may reasonably
request, and (c) take such further action that is reasonable in the
circumstances, in each case, to the extent required from time to time to enable
such Holder to sell its Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rule 144
under the Securities Act, as such rule may be amended from time to time, (ii)
Rule 144A under the Securities Act, as such rule may be amended from time to
time, or (iii) any similar rules or regulations hereafter adopted by the SEC.
Upon the request of any Holder of Registrable Securities, the Company and the
Trust will deliver to such Holder a written statement as to whether they have
complied with such requirements.
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(b) No Inconsistent Agreements. The Company or the Trust has not
entered into nor will the Company or the Trust on or after the date of this
Agreement enter into any agreement which is inconsistent with the rights granted
to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's or the Trust's other issued and
outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company and the Trust has obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or departure; provided no amendment, modification or
supplement or waiver or consent to the departure with respect to the provisions
of Section 4 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder of Registrable
Securities. Notwithstanding the foregoing sentence, (i) this Agreement may be
amended, without the consent of any Holder of Registrable Securities, by written
agreement signed by the Company, the Trust and Merrill Lynch, to cure any
ambiguity, correct or supplement any provision of this Agreement that may be
inconsistent with any other provision of this Agreement or to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with other provisions of this Agreement, (ii)
this Agreement may be amended, modified or supplemented, and waivers and
consents to departures from the provisions hereof may be given, by written
agreement signed by the Company, the Trust and Merrill Lynch to the extent that
any such amendment, modification, supplement, waiver or consent is, in their
reasonable judgment, necessary or appropriate to comply with applicable law
(including any interpretation of the Staff of the SEC) or any change therein and
(iii) to the extent any provision of this Agreement relates to the Initial
Purchasers, such provision may be amended, modified or supplemented, and waivers
or consents to departures from such provisions may be given, by written
agreement signed by Merrill Lynch, the Company and the Trust.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery
(i) if to a Holder, at the most current address given by such Holder to the
Company or the Trust by means of a notice given in accordance with the
provisions of this Section 7(d), which address initially is, with respect to the
Initial Purchasers, the address set forth in the Purchase Agreement; and (ii) if
to the Company or the Trust, initially at the Company's address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 7(d).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is
23
<PAGE>
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchasers, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement or
the Indenture. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiary. Each of the Initial Purchasers shall be
a third party beneficiary of the agreements made hereunder between the Company
and the Trust, on the one hand, and the Holders, on the other hand, and shall
have the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE
IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE PARTIES
HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable,
24
<PAGE>
the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be affected
or impaired thereby.
(k) Securities Held by the Company, the Trust or its Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by the
Company, the Trust or its affiliates (as such term is defined in Rule 405 under
the Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
25
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
COMMONWEALTH EDISON COMPANY
By: Dennis F. O'Brien
---------------------
Dennis F. O'Brien
Treasurer
COMED FINANCING II
By: John C. Bukovski
--------------------
John C. Bukovski
Administrative Trustee
By: Dennis F. O'Brien
---------------------
Dennis F. O'Brien
Administrative Trustee
<PAGE>
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
By: MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED, as Representative of the
Several Initial Purchasers
By: John Thorndike
--------------------------
Name: John Thorndike
Title: Managing Director
<PAGE>
Exhibit (5)-1
Commonwealth Edison Company and ComEd Financing II
Form S-4 File No. 333-
[Letterhead of Sidley & Austin]
June 3, 1997
The Board of Directors
Commonwealth Edison Company
10 South Dearborn Street - 37th Floor
Post Office Box 767
Chicago, Illinois 60690-0767
Re: Commonwealth Edison Company
Registration Statement on Form S-4
-----------------------------------
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-4 (the "Registration
Statement") being filed by Commonwealth Edison Company, an Illinois corporation
(the "Company"), and ComEd Financing II, a special purpose statutory business
trust created under the laws of the State of Delaware (the "Trust"), with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Securities Act"), relating to: (i) the exchange offer by the Trust of
$150,000,000 aggregate Liquidation Amount of the 8.50% Series B Capital
Securities (liquidation amount $1,000 per Capital Security) of the Trust (the
"New Capital Securities") for up to $150,000,000 aggregate Liquidation Amount of
the outstanding 8.50% Series A Capital Securities (liquidation amount $1,000 per
Capital Security) of the Trust (the "Old Capital Securities"); (ii) the exchange
by the Company with the Trust of $154,640,000 aggregate principal amount of the
Company's 8.50% Series B Subordinated Deferrable Interest Debentures due January
15, 2027 (the "New Debentures") for $154,640,000 aggregate principal amount of
the Company's outstanding 8.50% Series A Subordinated Deferrable Interest
Debentures due January 15, 2027 (the "Old Debentures"); and (iii) the guarantee
(the "New Guarantee") by the Company of the payment of Distributions on, and
payments on liquidation or redemption of, the New Capital Securities pursuant to
the Capital Securities Guarantee Agreement (the "New Guarantee Agreement") to be
entered into between the Company and Wilmington Trust Company, as Trustee (the
"Guarantee Trustee"), which is to be exchanged for the guarantee (the "Old
Guarantee") by the Company of the payment of the Distributions on, and payments
on liquidation or redemption of, the Old Capital Securities pursuant to the
Capital Securities Guarantee Agreement dated as of January 24, 1997 between the
Company and Wilmington Trust Company, as Trustee. The New Capital Securities are
to be issued under the Amended and Restated Trust Agreement dated as of January
24, 1997 (the "Trust Agreement") among the Company, as Depositor, Wilmington
Trust Company, as Property Trustee, the Administrative Trustees named
<PAGE>
S i d l e y & A u s t i n C h i c a g o
The Board of Directors
Commonwealth Edison Company
June 3, 1997
Page 2
therein and the holders, from time to time, of undivided beneficial interests in
the assets of the Trust. The New Debentures are to be issued under the
Indenture dated as of September 1, 1995 between the Company and Wilmington Trust
Company, as Debenture Trustee, as supplemented from time to time (collectively,
the "Indenture"). Capitalized terms not defined herein have the meanings
specified in the Registration Statement.
We have relied, as to various questions of fact material to such
opinions, upon certificates of officers of the Company. We have also examined
originals, or copies of originals certified to our satisfaction, of such
agreements, documents, certificates and other statements of government officials
and other instruments, have examined such questions of law and have satisfied
ourselves as to such matters of fact as we have considered relevant and
necessary as a basis for such opinions. We have assumed the authenticity of all
documents submitted to us as originals, the genuineness of all signatures, the
legal capacity of all natural persons and the conformity with the original
documents of any copies thereof submitted to us for our examination.
Based on the foregoing, we are of the opinion that:
1. All necessary corporate action has been taken by the Company to
authorize and issue the New Debentures and the New Guarantee.
2. The New Debentures will be legally issued and binding obligations
of the Company (except to the extent enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to or affecting the enforcement of
creditors' rights generally and by the effect of general principles of
equity, regardless of whether enforceability is considered in a proceeding
in equity or at law) when (i) the Registration Statement, as finally
amended, shall have become effective under the Securities Act and the
Indenture shall have been qualified under the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"), and (ii) the New Debentures shall
have been duly executed and authenticated as provided in the Indenture and
shall have been duly delivered against surrender and cancellation of a like
principal amount of the Old Debentures in the manner described in the
Registration Statement.
3. The New Guarantee will be a legally issued and binding obligation
of the Company (except to the extent enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to or affecting the enforcement of
creditors' rights generally and by the effect of general principles of
equity, regardless of whether
<PAGE>
S i d l e y & A u s t i n C h i c a g o
The Board of Directors
Commonwealth Edison Company
June 3, 1997
Page 3
enforceability is considered in a proceeding in equity or at law) when (i)
the Registration Statement, as finally amended, shall have become effective
under the Securities Act and the New Guarantee Agreement shall have been
qualified under the Trust Indenture Act and (ii) the New Guarantee
Agreement shall have been duly executed and delivered by the Company and
the Guarantee Trustee.
The opinions expressed above are limited to the laws of the States of
New York and Illinois and the federal laws of the United States of America.
We do not find it necessary for the purposes of this opinion to cover,
and accordingly we express no opinion as to, the application of the securities
or blue sky laws of the various states to the issuance of the New Debentures in
exchange for the Old Debentures or to the issuance of the New Guarantee in
exchange for the Old Guarantee.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references to our firm included in or made a
part of the Registration Statement.
Very truly yours,
Sidley & Austin
<PAGE>
Exhibit (5)-2
ComEd Financing II
Form S-4 File No. 333-
[Letterhead of Richards, Layton & Finger]
June 3, 1997
ComEd Financing II
c/o Commonwealth Edison Company
10 South Dearborn Street
37th Floor
Chicago, Illinois
Re: ComEd Financing II
------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Commonwealth Edison
Company, an Illinois corporation ("ComEd"), and ComEd Financing II, a Delaware
business trust (the "Trust"), in connection with the matters set forth herein.
At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of November 20,
1996 (the "Certificate"), as filed in the office of the Secretary
of State of the State of Delaware (the "Secretary of State") on
November 20, 1996;
<PAGE>
ComEd Financing II
June 3, 1997
Page 2
(b) The Trust Agreement of the Trust, dated as of November 19, 1996,
as amended by the Amended and Restated Trust Agreement of the
Trust, dated as of January 24, 1997 (collectively, the "Trust
Agreement"), among ComEd, as Sponsor, the trustees of the Trust
named therein (collectively, the "Trustees") and the holders,
from time to time, of undivided beneficial interests in the
assets of the Trust;
(c) The Registration Statement (the "Registration Statement") on Form
S-4, including a prospectus with respect to the Trust (the
"Prospectus"), relating to the 8.50% Series B Capital Securities
of the Trust representing undivided beneficial interests in the
assets of the Trust (each, a "New Capital Security" and
collectively, the "New Capital Securities"), filed by ComEd and
the Trust with the Securities and Exchange Commission; and
(d) A Certificate of Good Standing for the Trust, dated June 3, 1997,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed above, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
<PAGE>
ComEd Financing II
June 3, 1997
Page 3
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a New Capital Security is to be issued by the Trust (collectively, the "Security
Holders") of a certificate for such New Security and the payment for the New
Capital Security acquired by it, in accordance with the Trust Agreement and the
Prospectus, and (vii) that the New Capital Securities are issued and sold to the
Security Holders in accordance with the Trust Agreement and the Prospectus. We
have not participated in the preparation of the Prospectus and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Business Trust Act.
2. The New Capital Securities will represent valid and, subject to
the qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Security Holders, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We note that the Security Holders may be obligated to
make payments as set forth in the Trust Agreement.
<PAGE>
ComEd Financing II
June 3, 1997
Page 4
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Validity of Securities"
in the Prospectus. In giving the foregoing consents, we do not thereby admit
that we come within the category of Persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
Richards, Layton & Finger
<PAGE>
Exhibit (8)
Commonwealth Edison Company and ComEd Financing II
Form S-4 File No. 333-
[Letterhead of Sidley & Austin]
June 3, 1997
Commonwealth Edison Company
10 South Dearborn Street - 37th Floor
Post Office Box 767
Chicago, IL 60690-0767
Ladies and Gentlemen:
We have acted as counsel to Commonwealth Edison Company, an Illinois
corporation (the "Company"), and ComEd Financing II, a Delaware statutory
business trust (the "Trust"), in connection with the offer (the "Exchange
Offer") by the Trust to exchange its registered 8.50% Series B Capital
Securities for its outstanding non-registered 8.50% Series A Capital Securities,
as described in the Registration Statement on Form S-4 (the "Registration
Statement"), which is being filed by the Company and the Trust with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended. The Registration Statement includes the Prospectus (the "Prospectus")
relating to such offer. Capitalized terms not defined herein have the meanings
specified in the Prospectus.
In rendering the opinion expressed below, we have examined the
Prospectus and such other documents as we have deemed relevant and necessary,
including, without limitation, the Trust Agreement, the Indenture, the Old
Guarantee Agreement and the New Guarantee Agreement. Such opinion is
conditioned, among other things, upon the accuracy and completeness of the
facts, information and representations contained in the Prospectus as of the
date hereof and the continuing accuracy and completeness thereof as of the date
of the consummation of the Exchange Offer. We have assumed that the transactions
contemplated by the Prospectus and such other documents will occur as provided
therein and that there will be no material change to the Prospectus or any of
such other documents between the date hereof and the date of the consummation of
the Exchange Offer.
Based upon and subject to the foregoing, we are of the opinion that
the discussion set forth in the Prospectus under the caption "Certain Federal
Income Tax Consequences"
<PAGE>
Commonwealth Edison Company
June 3, 1997
Page 2
constitutes, in all material respects, a fair and accurate summary of the
matters addressed therein, based upon current law and the assumptions stated or
referred to therein.
We assume no obligation to update or supplement this letter to reflect
any facts or circumstances which may hereafter come to our attention with
respect to the opinion expressed above, including any changes in applicable law
which may hereafter occur.
We hereby consent to the filing of this letter as an Exhibit to the
Registration Statement and to all references to our Firm included in or made a
part of the Registration Statement.
Very truly yours,
Sidley & Austin
<PAGE>
Exhibit (12)
Commonwealth Edison Company
Form S-4 File No. 333-
Commonwealth Edison Company and Subsidiary Companies Consolidated
-----------------------------------------------------------------
Computation of Ratios of Earnings to Fixed Charges
and Ratios of Earnings to Fixed Charges and
Preferred and Preference Stock Dividend Requirements
----------------------------------------------------
- Thousands of Dollars -
Line
- ----
<TABLE>
<CAPTION>
Year Ended December 31
------------------------------------------------------------------ 12 Months Ended
March 31,
1992 1993 1994 1995 1996 1997
---------- ---------- ---------- ---------- ---------- ----------
<S><C> <C> <C> <C> <C> <C> <C>
1 Net income before
2 extraordinary
3 item $ 513,981 $ 112,440 $ 423,946 $ 737,176 $ 743,368 $ 714,152
---------- ---------- ---------- ---------- ---------- ----------
4 Net provisions for
5 income taxes and
6 investment tax
7 credits
8 charged to --
9 Operations $ 272,547 $ 66,406 $ 300,764 $ 503,519 $ 462,402 $ 445,369
10 Cumulative
11 effect of
12 change in
13 accounting
14 for income
15 taxes - (9,738) - - - -
16 Other income (6,549) (30,754) (23,062) (7,685) (7,385) (3,543)
---------- ---------- ---------- ---------- ---------- ----------
17 $ 265,998 $ 25,914 $ 277,702 $ 495,834 $ 455,017 $ 441,826
---------- ---------- ---------- ---------- ---------- ----------
18 Fixed charges --
19 Interest on debt $ 661,348 $ 651,639 $ 621,909 $ 589,217 $ 523,310 $ 516,382
20 Estimated interest
21 component of
23 nuclear fuel and
24 other lease payments,
25 rentals and other
26 interest 53,348 49,021 64,885 73,003 70,666 70,780
27 Amortization of
28 debt discount,
29 premium and
30 expense 20,178 20,966 22,804 22,738 21,151 21,056
31 Preferred securities
32 dividend requirements
33 of subsidiary
34 trusts - - - 4,428 16,960 19,368
---------- ---------- ---------- ---------- ---------- ----------
35 $ 734,874 $ 721,626 $ 709,598 $ 689,386 $ 632,087 $ 627,586
---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
36 Preferred and
37 preference
38 stock dividend
39 requirements --
40 Provisions
41 for
42 stock
43 dividends $ 70,539 $ 66,052 $ 64,927 $ 69,961 $ 64,424 $ 63,437
44 Taxes on income
45 required to
46 meet provisions
47 for
48 stock
49 dividends 44,646 43,596 42,854 45,945 42,150 41,488
---------- -------- ---------- ---------- ---------- ----------
50 $ 115,185 $109,648 $ 107,781 $ 115,906 $ 106,574 $ 104,925
---------- -------- ---------- ---------- ---------- ----------
51 Fixed charges and
52 preferred and
53 preference
54 stock dividend
55 requirements $ 850,059 $831,274 $ 817,379 $ 805,292 $ 738,661 $ 732,511
---------- -------- ---------- ---------- ---------- ----------
56 Earned for fixed
57 charges and
58 preferred and
59 preference
60 stock dividend
61 requirements $1,514,853 $859,980 $1,411,246 $1,922,396 $1,830,472 $1,783,564
========== ======== ========== ========== ========== ==========
62 Ratios of earnings
63 to --
64 Fixed charges
65 (line 61 divided
66 by line 35) 2.06 1.19 1.99 2.79 2.90 2.84
========== ======== ========== ========== ========== ==========
67 Fixed charges and
68 preferred and
69 preference
70 stock dividend
71 requirements
72 (line 61 divided
73 by line 55) 1.78 1.03 1.73 2.39 2.48 2.43
========== ======== ========== ========== ========== ==========
</TABLE>
<PAGE>
Exhibit (23)-1
Commonwealth Edison Company
Form S-4 File No. 333-
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-4 Registration Statement of our
reports dated January 31, 1997, included or incorporated by reference in
Commonwealth Edison Company's Annual Report on Form 10-K for the year ended
December 31, 1996, our report dated May 9, 1997, included in Commonwealth Edison
Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31,
1997, and our report dated January 31, 1997 included in Commonwealth Edison
Company's Current Report on Form 8-K dated January 31, 1997. We also hereby
consent to all references to our Firm included in this Form S-4 Registration
Statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
June 3, 1997
<PAGE>
Exhibit (24)
Commonwealth Edison Company
Form S-4 File No. 333-
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Commonwealth Edison Company, an
Illinois corporation, does hereby constitute and appoint JAMES J. O'CONNOR, LEO
F. MULLIN, SAMUEL K. SKINNER and DAVID A. SCHOLZ, and each of them, his true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the others) to execute in the name and on behalf of the undersigned
as such Director, a Registration Statement under the Securities Act of 1933
relating to an exchange offer to be made by ComEd Financing II and Commonwealth
Edison Company relating to trust capital securities issued by ComEd Financing
II, payment guarantees of Commonwealth Edison Company with respect thereto, and
subordinated debt securities of Commonwealth Edison Company and any and all
amendments or supplements to such Registration Statement; hereby granting to
such attorneys and agents, and each of them, full power of substitution and
revocation in the premises; and hereby ratifying and confirming all that such
attorneys and agents, or any of them, may do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of March,
1997.
Edward A. Brennan
--------------------------------
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
I, Mary L. Kwilos, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that EDWARD A. BRENNAN, personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered said instrument as his free and voluntary act, for the uses and
purposes therein set forth .
GIVEN under my hand and the notarial seal this 12th day of March, 1997.
Mary L. Kwilos
--------------------------------
Mary L. Kwilos
Notary Public
(Notary Public Seal)
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Commonwealth Edison Company, an
Illinois corporation, does hereby constitute and appoint JAMES J. O'CONNOR, LEO
F. MULLIN, SAMUEL K. SKINNER and DAVID A. SCHOLZ, and each of them, his true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the others) to execute in the name and on behalf of the undersigned
as such Director, a Registration Statement under the Securities Act of 1933
relating to an exchange offer to be made by ComEd Financing II and Commonwealth
Edison Company relating to trust capital securities issued by ComEd Financing
II, payment guarantees of Commonwealth Edison Company with respect thereto, and
subordinated debt securities of Commonwealth Edison Company and any and all
amendments or supplements to such Registration Statement; hereby granting to
such attorneys and agents, and each of them, full power of substitution and
revocation in the premises; and hereby ratifying and confirming all that such
attorneys and agents, or any of them, may do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of March,
1997.
James W. Compton
--------------------------------
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
I, Mary L. Kwilos, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that JAMES W. COMPTON, personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered said
instrument as his free and voluntary act, for the uses and purposes therein set
forth.
GIVEN under my hand and the notarial seal this 12th day of March, 1997.
Mary L. Kwilos
-------------------------------
Mary L. Kwilos
Notary Public
(Notary Public Seal)
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Commonwealth Edison Company, an
Illinois corporation, does hereby constitute and appoint JAMES J. O'CONNOR, LEO
F. MULLIN, SAMUEL K. SKINNER and DAVID A. SCHOLZ, and each of them, his true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the others) to execute in the name and on behalf of the undersigned
as such Director, a Registration Statement under the Securities Act of 1933
relating to an exchange offer to be made by ComEd Financing II and Commonwealth
Edison Company relating to trust capital securities issued by ComEd Financing
II, payment guarantees of Commonwealth Edison Company with respect thereto, and
subordinated debt securities of Commonwealth Edison Company and any and all
amendments or supplements to such Registration Statement; hereby granting to
such attorneys and agents, and each of them, full power of substitution and
revocation in the premises; and hereby ratifying and confirming all that such
attorneys and agents, or any of them, may do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of March,
1997.
Bruce DeMars
--------------------------------
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
I, Mary L. Kwilos, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that BRUCE DE MARS, personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered said instrument as his free and voluntary act, for the uses and
purposes therein set forth.
GIVEN under my hand and the notarial seal this 12th day of March, 1997.
Mary L. Kwilos
--------------------------------
Mary L. Kwilos
Notary Public
(Notary Public Seal)
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Commonwealth Edison Company, an
Illinois corporation, does hereby constitute and appoint JAMES J. O'CONNOR, LEO
F. MULLIN, SAMUEL K. SKINNER and DAVID A. SCHOLZ, and each of them, her true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the others) to execute in the name and on behalf of the undersigned
as such Director, a Registration Statement under the Securities Act of 1933
relating to an exchange offer to be made by ComEd Financing II and Commonwealth
Edison Company relating to trust capital securities issued by ComEd Financing
II, payment guarantees of Commonwealth Edison Company with respect thereto, and
subordinated debt securities of Commonwealth Edison Company and any and all
amendments or supplements to such Registration Statement; hereby granting to
such attorneys and agents, and each of them, full power of substitution and
revocation in the premises; and hereby ratifying and confirming all that such
attorneys and agents, or any of them, may do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of March,
1997.
Sue L. Gin
--------------------------------
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
I, Mary L. Kwilos, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that SUE L. GIN, personally known to me to be the
same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that she signed and delivered
said instrument as her free and voluntary act, for the uses and purposes therein
set forth.
GIVEN under my hand and the notarial seal this 12th day of March, 1997.
Mary L. Kwilos
--------------------------------
Mary L. Kwilos
Notary Public
(Notary Public Seal)
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Commonwealth Edison Company, an
Illinois corporation, does hereby constitute and appoint JAMES J. O'CONNOR, LEO
F. MULLIN, SAMUEL K. SKINNER and DAVID A. SCHOLZ, and each of them, his true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the others) to execute in the name and on behalf of the undersigned
as such Director, a Registration Statement under the Securities Act of 1933
relating to an exchange offer to be made by ComEd Financing II and Commonwealth
Edison Company relating to trust capital securities issued by ComEd Financing
II, payment guarantees of Commonwealth Edison Company with respect thereto, and
subordinated debt securities of Commonwealth Edison Company and any and all
amendments or supplements to such Registration Statement; hereby granting to
such attorneys and agents, and each of them, full power of substitution and
revocation in the premises; and hereby ratifying and confirming all that such
attorneys and agents, or any of them, may do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of March,
1997.
George E. Johnson
--------------------------------
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
I, Mary L. Kwilos, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that GEORGE E. JOHNSON, personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered said instrument as his free and voluntary act, for the uses and
purposes therein set forth.
GIVEN under my hand and the notarial seal this 12th day of March, 1997.
Mary L. Kwilos
--------------------------------
Mary L. Kwilos
Notary Public
(Notary Public Seal)
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director and Officer of Commonwealth Edison
Company, an Illinois corporation, does hereby constitute and appoint JAMES J.
O'CONNOR and DAVID A. SCHOLZ, and each of them, his true and lawful attorneys
and agents, each with full power and authority (acting alone and without the
other) to execute in the name and on behalf of the undersigned as such Director
and Officer, a Registration Statement under the Securities Act of 1933 relating
to an exchange offer to be made by ComEd Financing II and Commonwealth Edison
Company relating to trust capital securities issued by ComEd Financing II,
payment guarantees of Commonwealth Edison Company with respect thereto, and
subordinated debt securities of Commonwealth Edison Company and any and all
amendments or supplements to such Registration Statement; hereby granting to
such attorneys and agents, and each of them, full power of substitution and
revocation in the premises; and hereby ratifying and confirming all that such
attorneys and agents, or any of them, may do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of March,
1997.
Leo F. Mullin
--------------------------------
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
I, Mary L. Kwilos, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that LEO F. MULLIN, personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered said
instrument as his free and voluntary act, for the uses and purposes therein set
forth.
GIVEN under my hand and the notarial seal this 12th day of March, 1997.
Mary L. Kwilos
--------------------------------
Mary L. Kwilos
Notary Public
(Notary Public Seal)
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director and Officer of Commonwealth Edison
Company, an Illinois corporation, does hereby constitute and appoint JAMES J.
O'CONNOR and DAVID A. SCHOLZ, and each of them, his true and lawful attorneys
and agents, each with full power and authority (acting alone and without the
other) to execute in the name and on behalf of the undersigned as such Director
and Officer, a Registration Statement under the Securities Act of 1933 relating
to an exchange offer to be made by ComEd Financing II and Commonwealth Edison
Company relating to trust capital securities issued by ComEd Financing II,
payment guarantees of Commonwealth Edison Company with respect thereto, and
subordinated debt securities of Commonwealth Edison Company and any and all
amendments or supplements to such Registration Statement; hereby granting to
such attorneys and agents, and each of them, full power of substitution and
revocation in the premises; and hereby ratifying and confirming all that such
attorneys and agents, or any of them, may do or cause to be done by virtue of
these presents.
IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of March,
1997.
Samuel K. Skinner
--------------------------------
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
I, Mary L. Kwilos, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that SAMUEL K. SKINNER, personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered said instrument as his free and voluntary act, for the uses and
purposes therein set forth.
GIVEN under my hand and the notarial seal this 12th day of March, 1997.
Mary L. Kwilos
--------------------------------
Mary L. Kwilos
Notary Public
(Notary Public Seal)
<PAGE>
Exhibit (25)-1
Commonwealth Edison Company
Form S-4 File No. 333-
Registration No.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) ___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
COMMONWEALTH EDISON COMPANY
(Exact name of obligor as specified in its charter)
Illinois 36-0938600
(State of incorporation) (I.R.S. employer identification no.)
10 South Dearborn Street, 37th Floor
Post Office Box 767
Chicago, Illinois 60690-0767
(Address of principal executive offices) (Zip Code)
8.50% Series B Subordinated Deferrable Interest Debentures
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee and
upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes
the certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Wilmington Trust Company, a corporation organized and existing under
the laws of Delaware, has duly caused this Statement of Eligibility to be signed
on its behalf by the undersigned, thereunto duly authorized, all in the City of
Wilmington and State of Delaware on the 29th day of May, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Lloyd O. Martin By: /s/ Emmett R. Harmon
--------------------------- -----------------------
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
<PAGE>
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "Wilmington Trust Company" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is Wilmington Trust Company whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and
<PAGE>
property, and to appoint such officers and agents as the business of
the Corporation shall require, to make by-laws not inconsistent with
the Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver bullion and
foreign coins, to buy and sell bills of exchange, and generally to
use, exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or other
instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
2
<PAGE>
(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit, order,
or decree to be entered in any court of record within the State of
Delaware or elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of Delaware or
elsewhere.
(9) To act by any and every method of appointment as trustee, trustee
in bankruptcy, receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and all estates and
property, real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of any
of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations, contracts
and evidences of indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or of the
Government of the United States, or of any state, territory, colony,
or possession thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property, any and all the rights, powers and
privileges of individual
3
<PAGE>
owners thereof, including the right to vote thereon; to invest and
deal in and with any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and proper, and from
time to time to vary or realize such investments; to issue bonds and
secure the same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when the Board
of Directors shall determine, and in the promotion of its said
corporate business of investment and to the extent authorized by law,
to lease, purchase, hold, sell, assign, transfer, pledge, mortgage and
convey real and personal property of any name and nature and any
estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that the
said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every kind
with any person, firm, association or corporation, and, without limit
as to amount, to draw, make, accept, endorse, discount, execute and
issue promissory notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
4
<PAGE>
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or restricted
by reference to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the objects,
purposes and powers specified in each of the clauses of this paragraph
shall be regarded as independent objects, purposes and powers.
Fourth: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value $1.00
per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable
5
<PAGE>
on any other class or classes, or series of the same or other class of
stock and whether such dividends shall be cumulative or non-
cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article Fourth), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article Fourth), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article Fourth), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to
6
<PAGE>
receive all of the remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of Common
Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions of
such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article Fourth, each holder
of Common Stock shall have one vote in respect of each share of Common
Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable for stock
of the Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of stock or
securities convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms, corporations
or associations, whether such holders or others, and upon such terms as may
be deemed advisable by the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each series of Preferred
Stock in relation to the relative powers, preferences and rights of each
other series of Preferred Stock shall, in each case, be as fixed from time
to time by the Board of Directors in the resolution or resolutions adopted
pursuant to authority granted in section (b) of this Article Fourth and the
consent, by class or series vote or otherwise, of the holders of such of
the series of Preferred Stock as are from time to time outstanding shall
not be required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and rights
of such other series shall be fixed by the Board of Directors as senior to,
or on a parity with, the powers, preferences and rights of such outstanding
series, or any of them; provided, however, that the Board of Directors may
provide in the resolution or resolutions as to any series of Preferred
Stock adopted pursuant to section (b) of this Article Fourth that the
consent of the holders of a majority (or such greater proportion as shall
be therein fixed) of the outstanding shares of such series voting thereon
shall be required for the issuance of any or all other series of Preferred
Stock.
7
<PAGE>
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be conducted
and managed by a Board of Directors. The number of directors constituting
the entire Board shall be not less than five nor more than twenty-five as
fixed from time to time by vote of a majority of the whole Board, provided,
however, that the number of directors shall not be reduced so as to shorten
the term of any director at the time in office, and provided further, that
the number of directors constituting the whole Board shall be twenty-four
until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the first
class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships resulting
from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders shall
elect a successor to such director to hold office until the next election
of the class for which such director shall have been chosen and until his
successor shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the
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Corporation may be removed at any time without cause, but only by the
affirmative vote of the holders of two-thirds or more of the outstanding
shares of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class) cast
at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of the
meeting was mailed to stockholders. Notice of nominations which are
proposed by the Board of Directors shall be given by the Chairman on behalf
of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
Seventh: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
9
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Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
Eleventh: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
Fourteenth: - Meetings of the Directors may be held outside of the State of
Delaware at such places as may be from time to time designated by the
Board, and the Directors may keep the books of the Company outside of the
State of Delaware at such places as may be from time to time designated by
them.
Fifteenth: - (a) In addition to any affirmative vote required by law, and
except as otherwise expressly provided in sections (b) and (c) of this
Article Fifteenth:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
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(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
Fifteenth shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article Fifteenth shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation of
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation or other entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such
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business combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any other
person with which such first mentioned person or any of its Affiliates
or Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares of
capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned through
application of paragraph (3) above but shall not include any other Voting
Shares which may be issuable pursuant to any agreement, or upon exercise of
conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
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(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect in
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article Fifteenth on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article Fifteenth shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles Fifth, Thirteenth, Fifteenth or
Sixteenth of this Charter or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on January 16, 1997
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
<PAGE>
Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
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ARTICLE III
Committees
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board of
Directors when it is not in session to transact all business for and in behalf
of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such
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implementary Resolutions shall be suspended during such a disaster period until
it shall be determined by any interim Executive Committee acting under this
section that it shall be to the advantage of the Company to resume the conduct
and management of its affairs and business under all of the other provisions of
these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than thirteen
members who shall be selected by the Board of Directors, a majority of whom
shall be members of the Board of Directors and who shall hold office during the
pleasure of the Board.
(B) The Trust Committee shall have general supervision over the Trust
Department and the investment of trust funds, in all matters, however, being
subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be kept
and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint Committees
and/or designate officers or employees of the Company to whom supervision over
the investment of trust funds may be delegated when the Trust Committee is not
in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who shall
be selected by the Board of Directors from its own members, none of whom shall
be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the Audit
Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
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(C) The Audit Committee shall meet whenever and wherever the majority
of its members shall deem it to be proper for the transaction of its business,
and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any Committee
created under Article III of the By-Laws of this Company, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absence or
disqualified member.
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ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables
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of the Company and for the keeping of proper records of the evidence of property
or indebtedness and of all the transactions of the Company. He shall have
general supervision of the expenditures of the Company and shall report to the
Board of Directors at each regular meeting of the condition of the Company, and
perform such other duties as may be assigned to him from time to time by the
Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary
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or Treasurer or an Assistant Secretary, and the seal of the corporation shall be
engraved thereon. Each certificate shall recite that the stock represented
thereby is transferrable only upon the books of the Company by the holder
thereof or his attorney, upon surrender of the certificate properly endorsed.
Any certificate of stock surrendered to the Company shall be cancelled at the
time of transfer, and before a new certificate or certificates shall be issued
in lieu thereof. Duplicate certificates of stock shall be issued only upon
giving such security as may be satisfactory to the Board of Directors or the
Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the
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Company to any and all deeds, conveyances, assignments, releases, contracts,
agreements, bonds, notes, mortgages and all other instruments incident to the
business of this Company or in acting as executor, administrator, guardian,
trustee, agent or in any other fiduciary or representative capacity by any and
every method of appointment or by whatever person, corporation, court officer or
authority in the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of Directors or
the Executive Committee, and any and all such instruments shall have the same
force and validity as though expressly authorized by the Board of Directors
and/or the Executive Committee.
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending any
proceeding in advance of its final disposition, provided, however, that the
payment of
9
<PAGE>
expenses incurred by a Director officer in his capacity as a Director or officer
in advance of the final disposition of the proceeding shall be made only upon
receipt of an undertaking by the Director or officer to repay all amounts
advanced if it should be ultimately determined that the Director or officer is
not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses, under this
Article X is not paid in full within ninety days after a written claim therefor
has been received by the Corporation the claimant may file suit to recover the
unpaid amount of such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such claim. In any such action
the Corporation shall have the burden of proving that the claimant was not
entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Charter or Act of Incorporation, these By-
Laws, agreement, vote of stockholders or disinterested Directors or otherwise.
(E) Any repeal or modification of the foregoing provisions of this
Article X shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
10
<PAGE>
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: May 29, 1997 By: /s/ Emmett R. Harmon
---------------------
Name: Emmett R. Harmon
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings
banks with state publication requirements. It has not been approved
by any state banking authorities. Refer to your appropriate state
banking authorities for your state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- -------------------------------------------- ------------------
Name of Bank
City
in the State of DELAWARE, at the close of business on March 31, 1997.
--------
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins................ 181,744
Interest-bearing balances.......................................... 0
Held-to-maturity securities.............................................. 445,954
Available-for-sale securities............................................ 767,337
Federal funds sold and securities purchased under agreements to resell... 86,900
Loans and lease financing receivables:
Loans and leases, net of unearned income............ 3,685,616
LESS: Allowance for loan and lease losses.......... 52,478
LESS: Allocated transfer risk reserve.............. 0
Loans and leases, net of unearned income, allowance, and reserve... 3,633,138
Assets held in trading accounts.......................................... 0
Premises and fixed assets (including capitalized leases)................. 94,513
Other real estate owned.................................................. 3,702
Investments in unconsolidated subsidiaries and associated companies...... 20
Customers' liability to this bank on acceptances outstanding............. 0
Intangible assets........................................................ 4,012
Other assets............................................................. 103,524
Total assets............................................................. 5,320,844
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<S> <C>
LIABILITIES
Deposits:
In domestic offices......................................................... 3,618,174
Noninterest-bearing........................ 784,267
Interest-bearing........................... 2,833,907
Federal funds purchased and Securities sold under agreements to repurchase.. 293,862
Demand notes issued to the U.S. Treasury.................................... 64,550
Trading liabilities (from Schedule RC-D).................................... 0
Other borrowed money:....................................................... ///////
With original maturity of one year or less............................ 774,000
With original maturity of more than one year.......................... 43,000
Bank's liability on acceptances executed and outstanding.................... 0
Subordinated notes and debentures........................................... 0
Other liabilities (from Schedule RC-G)...................................... 95,672
Total liabilities........................................................... 4,889,258
EQUITY CAPITAL
Perpetual preferred stock and related surplus............................... 0
Common Stock................................................................ 500
Surplus (exclude all surplus related to preferred stock).................... 62,118
Undivided profits and capital reserves...................................... 371,107
Net unrealized holding gains (losses) on available-for-sale securities...... (2,139)
Total equity capital........................................................ 431,586
Total liabilities, limited-life preferred stock, and equity capital......... 5,320,844
Thousands of dollars
</TABLE>
2
<PAGE>
Exhibit (25)-2
Commonwealth Edison Company and ComEd Financing II
Form S-4 File No. 333-
Registration No.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) ___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
COMMONWEALTH EDISON COMPANY
ComEd FINANCING II
(Exact name of obligor as specified in its charter)
Illinois 36-0938600
Delaware 52-6839466
(State of incorporation) (I.R.S. employer identification no.)
10 South Dearborn Street, 37th Floor
Post Office Box 767
Chicago, Illinois 60690-0767
(Address of principal executive offices) (Zip Code)
8.50% Series B Capital Securities
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee and
upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes
the certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Wilmington Trust Company, a corporation organized and existing under
the laws of Delaware, has duly caused this Statement of Eligibility to be signed
on its behalf by the undersigned, thereunto duly authorized, all in the City of
Wilmington and State of Delaware on the 29th day of May, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Lloyd O. Martin By: /s/ Emmett R. Harmon
--------------------------- -----------------------
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
<PAGE>
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "Wilmington Trust Company" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is Wilmington Trust Company whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and
<PAGE>
property, and to appoint such officers and agents as the business of
the Corporation shall require, to make by-laws not inconsistent with
the Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver bullion and
foreign coins, to buy and sell bills of exchange, and generally to
use, exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or other
instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
2
<PAGE>
(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit, order,
or decree to be entered in any court of record within the State of
Delaware or elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of Delaware or
elsewhere.
(9) To act by any and every method of appointment as trustee, trustee
in bankruptcy, receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and all estates and
property, real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of any
of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations, contracts
and evidences of indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or of the
Government of the United States, or of any state, territory, colony,
or possession thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property, any and all the rights, powers and
privileges of individual
3
<PAGE>
owners thereof, including the right to vote thereon; to invest and
deal in and with any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and proper, and from
time to time to vary or realize such investments; to issue bonds and
secure the same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when the Board
of Directors shall determine, and in the promotion of its said
corporate business of investment and to the extent authorized by law,
to lease, purchase, hold, sell, assign, transfer, pledge, mortgage and
convey real and personal property of any name and nature and any
estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that the
said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every kind
with any person, firm, association or corporation, and, without limit
as to amount, to draw, make, accept, endorse, discount, execute and
issue promissory notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
4
<PAGE>
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or restricted
by reference to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the objects,
purposes and powers specified in each of the clauses of this paragraph
shall be regarded as independent objects, purposes and powers.
Fourth: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value $1.00
per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable
5
<PAGE>
on any other class or classes, or series of the same or other class of
stock and whether such dividends shall be cumulative or non-
cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article Fourth), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article Fourth), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article Fourth), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to
6
<PAGE>
receive all of the remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of Common
Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions of
such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article Fourth, each holder
of Common Stock shall have one vote in respect of each share of Common
Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable for stock
of the Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of stock or
securities convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms, corporations
or associations, whether such holders or others, and upon such terms as may
be deemed advisable by the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each series of Preferred
Stock in relation to the relative powers, preferences and rights of each
other series of Preferred Stock shall, in each case, be as fixed from time
to time by the Board of Directors in the resolution or resolutions adopted
pursuant to authority granted in section (b) of this Article Fourth and the
consent, by class or series vote or otherwise, of the holders of such of
the series of Preferred Stock as are from time to time outstanding shall
not be required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and rights
of such other series shall be fixed by the Board of Directors as senior to,
or on a parity with, the powers, preferences and rights of such outstanding
series, or any of them; provided, however, that the Board of Directors may
provide in the resolution or resolutions as to any series of Preferred
Stock adopted pursuant to section (b) of this Article Fourth that the
consent of the holders of a majority (or such greater proportion as shall
be therein fixed) of the outstanding shares of such series voting thereon
shall be required for the issuance of any or all other series of Preferred
Stock.
7
<PAGE>
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be conducted
and managed by a Board of Directors. The number of directors constituting
the entire Board shall be not less than five nor more than twenty-five as
fixed from time to time by vote of a majority of the whole Board, provided,
however, that the number of directors shall not be reduced so as to shorten
the term of any director at the time in office, and provided further, that
the number of directors constituting the whole Board shall be twenty-four
until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the first
class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships resulting
from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders shall
elect a successor to such director to hold office until the next election
of the class for which such director shall have been chosen and until his
successor shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the
8
<PAGE>
Corporation may be removed at any time without cause, but only by the
affirmative vote of the holders of two-thirds or more of the outstanding
shares of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class) cast
at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of the
meeting was mailed to stockholders. Notice of nominations which are
proposed by the Board of Directors shall be given by the Chairman on behalf
of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
Seventh: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
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Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
Eleventh: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
Fourteenth: - Meetings of the Directors may be held outside of the State of
Delaware at such places as may be from time to time designated by the
Board, and the Directors may keep the books of the Company outside of the
State of Delaware at such places as may be from time to time designated by
them.
Fifteenth: - (a) In addition to any affirmative vote required by law, and
except as otherwise expressly provided in sections (b) and (c) of this
Article Fifteenth:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
10
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(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
Fifteenth shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article Fifteenth shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation of
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation or other entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such
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business combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned through
application of paragraph (3) above but shall not include any other Voting
Shares which may be issuable pursuant to any agreement, or upon exercise of
conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
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(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect in
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article Fifteenth on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article Fifteenth shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles Fifth, Thirteenth, Fifteenth or
Sixteenth of this Charter or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on January 16, 1997
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or
<PAGE>
at the call of the Chairman of the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
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ARTICLE III
Committees
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board of
Directors when it is not in session to transact all business for and in behalf
of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such
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implementary Resolutions shall be suspended during such a disaster period until
it shall be determined by any interim Executive Committee acting under this
section that it shall be to the advantage of the Company to resume the conduct
and management of its affairs and business under all of the other provisions of
these By-Laws.
4
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Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than thirteen
members who shall be selected by the Board of Directors, a majority of whom
shall be members of the Board of Directors and who shall hold office during the
pleasure of the Board.
(B) The Trust Committee shall have general supervision over the Trust
Department and the investment of trust funds, in all matters, however, being
subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be kept
and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint Committees
and/or designate officers or employees of the Company to whom supervision over
the investment of trust funds may be delegated when the Trust Committee is not
in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who shall
be selected by the Board of Directors from its own members, none of whom shall
be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the Audit
Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the majority
of its members shall deem it to be proper for the transaction of its business,
and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
5
<PAGE>
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any Committee
created under Article III of the By-Laws of this Company, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absence or
disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of
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Directors shall preside at all meetings of the Board of Directors at which the
Chairman of the Board shall not be present and shall have such further authority
and powers and shall perform such duties as the Board of Directors or the
Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
7
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There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of
stock shall be issued only upon giving such security as may be satisfactory to
the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any
8
<PAGE>
dividend, or to any allotment or rights, or to exercise any rights in respect of
any change, conversion or exchange of capital stock, or in connection with
obtaining the consent of stockholders for any purpose, which record date shall
not be more than 60 nor less than 10 days proceeding the date of any meeting of
stockholders or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, or a date in connection with obtaining such
consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
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<PAGE>
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending any
proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a Director officer in his capacity as a Director
or officer in advance of the final disposition of the proceeding shall be made
only upon receipt of an undertaking by the Director or officer to repay all
amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses, under this
Article X is not paid in full within ninety days after a written claim therefor
has been received by the Corporation the claimant may file suit to recover the
unpaid amount of such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such claim. In any such action
the Corporation shall have the burden of proving that the claimant
10
<PAGE>
was not entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Charter or Act of Incorporation, these By-
Laws, agreement, vote of stockholders or disinterested Directors or otherwise.
(E) Any repeal or modification of the foregoing provisions of this
Article X shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
11
<PAGE>
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: May 29, 1997 By: /s/ Emmett R. Harmon
---------------------
Name: Emmett R. Harmon
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings
banks with state publication requirements. It has not been approved
by any state banking authorities. Refer to your appropriate state
banking authorities for your state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- -------------------------------------------- ----------
Name of Bank
City
in the State of DELAWARE, at the close of business on March 31, 1997.
--------
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins............... 181,744
Interest-bearing balances......................................... 0
Held-to-maturity securities............................................. 445,954
Available-for-sale securities........................................... 767,337
Federal funds sold and securities purchased under agreements to resell.. 86,900
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 3,685,616
LESS: Allowance for loan and lease losses........... 52,478
LESS: Allocated transfer risk reserve............... 0
Loans and leases, net of unearned income, allowance, and reserve.. 3,633,138
Assets held in trading accounts......................................... 0
Premises and fixed assets (including capitalized leases)................ 94,513
Other real estate owned................................................. 3,702
Investments in unconsolidated subsidiaries and associated companies..... 20
Customers' liability to this bank on acceptances outstanding............ 0
Intangible assets....................................................... 4,012
Other assets............................................................ 103,524
Total assets............................................................ 5,320,844
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<S> <C>
LIABILITIES
Deposits:
In domestic offices......................................................... 3,618,174
Noninterest-bearing.......................... 784,267
Interest-bearing............................. 2,833,907
Federal funds purchased and Securities sold under agreements to repurchase.. 293,862
Demand notes issued to the U.S. Treasury.................................... 64,550
Trading liabilities (from Schedule RC-D).................................... 0
Other borrowed money:....................................................... ///////
With original maturity of one year or less............................ 774,000
With original maturity of more than one year.......................... 43,000
Bank's liability on acceptances executed and outstanding.................... 0
Subordinated notes and debentures........................................... 0
Other liabilities (from Schedule RC-G)...................................... 95,672
Total liabilities........................................................... 4,889,258
EQUITY CAPITAL
Perpetual preferred stock and related surplus............................... 0
Common Stock................................................................ 500
Surplus (exclude all surplus related to preferred stock).................... 62,118
Undivided profits and capital reserves...................................... 371,107
Net unrealized holding gains (losses) on available-for-sale securities...... (2,139)
Total equity capital........................................................ 431,586
Total liabilities, limited-life preferred stock, and equity capital......... 5,320,844
Thousands of dollars
</TABLE>
2
<PAGE>
Exhibit (25)-3
Commonwealth Edison Company
Form S-4 File No. 333-
Registration No.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) ___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
COMMONWEALTH EDISON COMPANY
(Exact name of obligor as specified in its charter)
Illinois 36-0938600
(State of incorporation) (I.R.S. employer identification no.)
10 South Dearborn Street, 37th Floor
Post Office Box 767
Chicago, Illinois 60690-0767
(Address of principal executive offices) (Zip Code)
Guarantee of 8.50% Capital Securities of ComEd Financing II
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee and
upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes
the certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Wilmington Trust Company, a corporation organized and existing under
the laws of Delaware, has duly caused this Statement of Eligibility to be signed
on its behalf by the undersigned, thereunto duly authorized, all in the City of
Wilmington and State of Delaware on the 29th day of May, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Lloyd O. Martin By: /s/ Emmett R. Harmon
--------------------------- -----------------------
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
<PAGE>
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "Wilmington Trust Company" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is Wilmington Trust Company whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and
<PAGE>
property, and to appoint such officers and agents as the business of
the Corporation shall require, to make by-laws not inconsistent with
the Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver bullion and
foreign coins, to buy and sell bills of exchange, and generally to
use, exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or other
instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
2
<PAGE>
(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit, order,
or decree to be entered in any court of record within the State of
Delaware or elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of Delaware or
elsewhere.
(9) To act by any and every method of appointment as trustee, trustee
in bankruptcy, receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and all estates and
property, real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of any
of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations, contracts
and evidences of indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or of the
Government of the United States, or of any state, territory, colony,
or possession thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property, any and all the rights, powers and
privileges of individual
3
<PAGE>
owners thereof, including the right to vote thereon; to invest and
deal in and with any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and proper, and from
time to time to vary or realize such investments; to issue bonds and
secure the same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when the Board
of Directors shall determine, and in the promotion of its said
corporate business of investment and to the extent authorized by law,
to lease, purchase, hold, sell, assign, transfer, pledge, mortgage and
convey real and personal property of any name and nature and any
estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that the
said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every kind
with any person, firm, association or corporation, and, without limit
as to amount, to draw, make, accept, endorse, discount, execute and
issue promissory notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
4
<PAGE>
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or restricted
by reference to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the objects,
purposes and powers specified in each of the clauses of this paragraph
shall be regarded as independent objects, purposes and powers.
Fourth: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value $1.00
per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable
5
<PAGE>
on any other class or classes, or series of the same or other class of
stock and whether such dividends shall be cumulative or non-
cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article Fourth), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article Fourth), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article Fourth), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to
6
<PAGE>
receive all of the remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of Common
Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions of
such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article Fourth, each holder
of Common Stock shall have one vote in respect of each share of Common
Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable for stock
of the Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of stock or
securities convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms, corporations
or associations, whether such holders or others, and upon such terms as may
be deemed advisable by the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each series of Preferred
Stock in relation to the relative powers, preferences and rights of each
other series of Preferred Stock shall, in each case, be as fixed from time
to time by the Board of Directors in the resolution or resolutions adopted
pursuant to authority granted in section (b) of this Article Fourth and the
consent, by class or series vote or otherwise, of the holders of such of
the series of Preferred Stock as are from time to time outstanding shall
not be required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and rights
of such other series shall be fixed by the Board of Directors as senior to,
or on a parity with, the powers, preferences and rights of such outstanding
series, or any of them; provided, however, that the Board of Directors may
provide in the resolution or resolutions as to any series of Preferred
Stock adopted pursuant to section (b) of this Article Fourth that the
consent of the holders of a majority (or such greater proportion as shall
be therein fixed) of the outstanding shares of such series voting thereon
shall be required for the issuance of any or all other series of Preferred
Stock.
7
<PAGE>
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be conducted
and managed by a Board of Directors. The number of directors constituting
the entire Board shall be not less than five nor more than twenty-five as
fixed from time to time by vote of a majority of the whole Board, provided,
however, that the number of directors shall not be reduced so as to shorten
the term of any director at the time in office, and provided further, that
the number of directors constituting the whole Board shall be twenty-four
until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the first
class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships resulting
from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders shall
elect a successor to such director to hold office until the next election
of the class for which such director shall have been chosen and until his
successor shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the
8
<PAGE>
Corporation may be removed at any time without cause, but only by the
affirmative vote of the holders of two-thirds or more of the outstanding
shares of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class) cast
at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of the
meeting was mailed to stockholders. Notice of nominations which are
proposed by the Board of Directors shall be given by the Chairman on behalf
of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
Seventh: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
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Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
Eleventh: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
Fourteenth: - Meetings of the Directors may be held outside of the State of
Delaware at such places as may be from time to time designated by the
Board, and the Directors may keep the books of the Company outside of the
State of Delaware at such places as may be from time to time designated by
them.
Fifteenth: - (a) In addition to any affirmative vote required by law, and
except as otherwise expressly provided in sections (b) and (c) of this
Article Fifteenth:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
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(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
Fifteenth shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article Fifteenth shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation of
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation or other entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such
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business combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any other
person with which such first mentioned person or any of its Affiliates
or Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares of
capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned through
application of paragraph (3) above but shall not include any other Voting
Shares which may be issuable pursuant to any agreement, or upon exercise of
conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
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(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect in
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article Fifteenth on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article Fifteenth shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles Fifth, Thirteenth, Fifteenth or
Sixteenth of this Charter or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on January 16, 1997
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
<PAGE>
Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
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ARTICLE III
Committees
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board of
Directors when it is not in session to transact all business for and in behalf
of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such
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implementary Resolutions shall be suspended during such a disaster period until
it shall be determined by any interim Executive Committee acting under this
section that it shall be to the advantage of the Company to resume the conduct
and management of its affairs and business under all of the other provisions of
these By-Laws.
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Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than thirteen
members who shall be selected by the Board of Directors, a majority of whom
shall be members of the Board of Directors and who shall hold office during the
pleasure of the Board.
(B) The Trust Committee shall have general supervision over the Trust
Department and the investment of trust funds, in all matters, however, being
subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be kept
and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint Committees
and/or designate officers or employees of the Company to whom supervision over
the investment of trust funds may be delegated when the Trust Committee is not
in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who shall
be selected by the Board of Directors from its own members, none of whom shall
be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the Audit
Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the majority
of its members shall deem it to be proper for the transaction of its business,
and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
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(A) The Compensation Committee shall be composed of not more than
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any Committee
created under Article III of the By-Laws of this Company, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absence or
disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
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Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of
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Directors at appropriate times a report relating to the general condition and
internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of
stock shall be issued only upon giving such security as may be satisfactory to
the Board of Directors or the Executive Committee.
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Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
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ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending any
proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a Director officer in his capacity as a Director
or officer in advance of the final disposition of the proceeding shall be made
only upon receipt of an undertaking by the Director or officer to repay all
amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses, under this
Article X is not paid in full within ninety days after a written claim therefor
has been received by the Corporation the claimant may file suit to recover the
unpaid amount of such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such
10
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claim. In any such action the Corporation shall have the burden of proving that
the claimant was not entitled to the requested indemnification of payment of
expenses under applicable law.
(D) The rights conferred on any person by this Article X shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Charter or Act of Incorporation, these By-
Laws, agreement, vote of stockholders or disinterested Directors or otherwise.
(E) Any repeal or modification of the foregoing provisions of this
Article X shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
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EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: May 29, 1997 By: /s/ Emmett R. Harmon
---------------------
Name: Emmett R. Harmon
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings
banks with state publication requirements. It has not been approved
by any state banking authorities. Refer to your appropriate state
banking authorities for your state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- -------------------------------------------- ----------
Name of Bank
City
in the State of DELAWARE, at the close of business on March 31, 1997.
--------
<TABLE>
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins............... 181,744
Interest-bearing balances......................................... 0
Held-to-maturity securities............................................. 445,954
Available-for-sale securities........................................... 767,337
Federal funds sold and securities purchased under agreements to resell.. 86,900
Loans and lease financing receivables:
Loans and leases, net of unearned income............ 3,685,616
LESS: Allowance for loan and lease losses.......... 52,478
LESS: Allocated transfer risk reserve.............. 0
Loans and leases, net of unearned income, allowance, and reserve.. 3,633,138
Assets held in trading accounts......................................... 0
Premises and fixed assets (including capitalized leases)................ 94,513
Other real estate owned................................................. 3,702
Investments in unconsolidated subsidiaries and associated companies..... 20
Customers' liability to this bank on acceptances outstanding............ 0
Intangible assets....................................................... 4,012
Other assets............................................................ 103,524
Total assets............................................................ 5,320,844
CONTINUED ON NEXT PAGE
</TABLE>
<PAGE>
<TABLE>
<S> <C>
LIABILITIES
Deposits:
In domestic offices.......................................................... 3,618,174
Noninterest-bearing.................. 784,267
Interest-bearing..................... 2,833,907
Federal funds purchased and Securities sold under agreements to repurchase... 293,862
Demand notes issued to the U.S. Treasury..................................... 64,550
Trading liabilities (from Schedule RC-D)..................................... 0
Other borrowed money:........................................................ ///////
With original maturity of one year or less............................. 774,000
With original maturity of more than one year........................... 43,000
Bank's liability on acceptances executed and outstanding..................... 0
Subordinated notes and debentures............................................ 0
Other liabilities (from Schedule RC-G)....................................... 95,672
Total liabilities............................................................ 4,889,258
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................ 0
Common Stock................................................................. 500
Surplus (exclude all surplus related to preferred stock)..................... 62,118
Undivided profits and capital reserves....................................... 371,107
Net unrealized holding gains (losses) on available-for-sale securities....... (2,139)
Total equity capital......................................................... 431,586
Total liabilities, limited-life preferred stock, and equity capital.......... 5,320,844
Thousands of dollars
</TABLE>
2
<PAGE>
Exhibit (99)-1
ComEd Financing II
Form S-4 File No. 333-
LETTER OF TRANSMITTAL
ComEd Financing II
Offer to Exchange Its Series B 8.50%
Capital Securities Which Have Been
Registered Under the
Securities Act of 1933
for Any and All of Its Outstanding
8.50% Series A Capital Securities
(Liquidation Amount $1,000 per Capital Security)
pursuant to the Prospectus dated _____________, 1997
==============================================================================
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 p.m., NEW YORK
CITY TIME, ON __________, 1997 (AS SUCH DATE AND TIME MAY BE EXTENDED BY
COMMONWEALTH EDISON COMPANY AND COMED FINANCING II IN THEIR SOLE DISCRETION,
THE "EXPIRATION DATE").
==============================================================================
If you desire to accept the Exchange Offer, this Letter of Transmittal
should be completed, signed and delivered to:
<TABLE>
<CAPTION>
<S> <C> <C>
By Registered or Certified Mail: By Facsimile: By Hand/Overnight Carrier:
Wilmington Trust Company Wilmington Trust Company Wilmington Trust Company
1100 North Market Street Attn: Corporate Trust 1100 North Market Street
Rodney Square North Administration Rodney Square North
Wilmington, Delaware 19890 (302) 651-8882 Wilmington, Delaware 19890
Attn: Corporate Trust Attn: Corporate Trust
Administration (For Eligible Institutions Only) Administration
Confirm by Telephone:
(302) 651-1428
For Information Call:
(302) 651-1428
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA A FACSIMILE NUMBER
OTHER THAN THAT SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
The undersigned hereby acknowledges receipt of the Prospectus dated
___________, 1997 (as the same may be amended or supplemented from time to time,
the "Prospectus") of ComEd Financing II, a
<PAGE>
Delaware business trust (the "Trust"), and this Letter of Transmittal (the
"Letter of Transmittal"), that together constitute the Trust's offer (the
"Exchange Offer") to exchange its 8.50% Series B Capital Securities (the "New
Capital Securities") which have been registered under the Securities Act of
1933, as amended (the "Securities Act"), for a like Liquidation Amount of its
outstanding 8.50% Series A Capital Securities (the "Old Capital Securities").
Capitalized terms used but not defined herein have the meanings ascribed to them
in the Prospectus.
This Letter of Transmittal is to be completed either if (a) certificates
for Old Capital Securities are to be delivered herewith or (b) tenders are to be
made pursuant to the procedures for tender by book-entry transfer set forth in
the Prospectus under "The Exchange Offer -- Procedures for Tendering Old Capital
Securities" and an Agent's Message (as defined below) is not delivered.
Certificates for Old Capital Securities, or book-entry confirmation of a book-
entry transfer of such Old Capital Securities into the Exchange Agent's account
at The Depository Trust Company ("DTC"), as well as this Letter of Transmittal
(or facsimile hereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
herein on or prior to the Expiration Date or the guaranteed delivery procedures
set forth in Instruction 2 must be complied with. Tenders by book-entry transfer
may also be made by delivering an Agent's Message in lieu of this Letter of
Transmittal. The term "book-entry confirmation" means a confirmation of book-
entry transfer of Old Capital Securities into the Exchange Agent's account at
DTC. The term "Agent's Message" means a message, transmitted by DTC to and
received by the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgment from the tendering
participant, which acknowledgment states that such participant has received and
agrees to be bound by this Letter of Transmittal and that the Trust and ComEd
may enforce this Letter of Transmittal against such participant.
If a registered holder (which term, for purposes of this document, shall
include a participant in the book-entry transfer facility system at DTC whose
name appears on a security position listing as the owner of the Old Capital
Securities) desires to tender Old Capital Securities and such Old Capital
Securities are not immediately available or time will not permit all documents
required by the Exchange Offer to reach the Exchange Agent (or if the procedures
for book-entry transfer cannot be completed on a timely basis) prior to the
Expiration Date, a tender may be effected in accordance with the guaranteed
delivery procedures set forth in Instruction 2.
The undersigned hereby tenders to the Trust and Commonwealth Edison
Company, an Illinois corporation ("ComEd"), the aggregate Liquidation Amount of
the Old Capital Securities described in Box 1 below (the "Tendered Old Capital
Securities") in exchange for a like aggregate Liquidation Amount of the Trust's
New Capital Securities which have been registered under the Securities Act, upon
the terms and subject to the conditions described in the Prospectus and this
Letter of Transmittal. The undersigned is the registered holder of all the
Tendered Old Capital Securities and the undersigned represents that it has
received from each beneficial owner of Tendered Old Capital Securities
("Beneficial Owners") a duly completed and executed form of "Instruction to
Registered Holder from Beneficial Owner" accompanying this Letter of
Transmittal, instructing the undersigned to take the action described in this
Letter of Transmittal.
Subject to and effective upon the acceptance for exchange of the Tendered
Old Capital Securities tendered herewith in accordance with the terms and
conditions of the Exchange Offer (including, if the Exchange Offer is extended
or amended, the terms and conditions of any such extension or amendment), the
undersigned hereby exchanges, assigns and transfers to, or upon the order of,
the Trust all right, title and interest in, to and under the Tendered Old
Capital Securities.
-2-
<PAGE>
Unless otherwise indicated under "Special Issuance Instructions" below (Box
4), the undersigned hereby directs that the New Capital Securities exchanged for
the Tendered Old Capital Securities be issued in the name(s) of the undersigned
or, in the case of a book-entry transfer of Old Capital Securities, that such
New Capital Securities be credited to the account indicated below maintained at
DTC. If applicable, substitute certificates representing Old Capital Securities
not exchanged or not accepted for exchange will be issued to the undersigned or,
in the case of a book-entry transfer of Old Capital Securities, will be credited
to the account indicated below maintained at DTC. Similarly, unless otherwise
indicated under "Special Delivery Instructions" below (Box 5), please send or
cause to be sent the certificates for New Capital Securities (and accompanying
documents, as appropriate) to the undersigned at the address shown below in Box
1.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the true and lawful agent and attorney in fact (with full knowledge
that the Exchange Agent is also acting as agent of ComEd and the Trust in
connection with the Exchange Offer) of the undersigned with respect to the
Tendered Old Capital Securities, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest),
subject only to the right of withdrawal described in Instruction 6, to (i)
deliver certificates for the Tendered Old Capital Securities to ComEd or the
Trust or cause ownership of the Tendered Old Capital Securities to be
transferred to, or upon the order of, the Trust, on the books of the registrar
for the Old Capital Securities and deliver all accompanying evidences of
transfer and authenticity to, or transfer ownership of such Old Capital
Securities on the account books maintained by DTC to, or upon the order of, the
Trust, upon receipt by the Exchange Agent, as the undersigned's agent, of the
New Capital Securities to be issued in exchange for such Old Capital Securities
pursuant to the Exchange Offer, and (ii) receive for the account of the Trust
all benefits and otherwise exercise all rights of beneficial ownership of the
Tendered Old Capital Securities, all in accordance with the terms of the
Exchange Offer.
The undersigned understands that tenders of Old Capital Securities pursuant
to any one of the procedures described in the Prospectus under the caption "The
Exchange Offer - Procedures for Tendering Old Capital Securities" and in the
instructions hereto will, upon ComEd's and the Trust's acceptance for exchange
of such Tendered Old Capital Securities, constitute a binding agreement among
the undersigned, ComEd and the Trust upon the terms and subject to the
conditions of the Exchange Offer, subject only to withdrawal of such tenders on
the terms set forth in Instruction 6. The undersigned recognizes that, under
certain circumstances set forth in the Prospectus, ComEd and the Trust may not
be required to accept for exchange any of the Tendered Old Capital Securities.
All authority herein conferred or agreed to be conferred shall survive the death
or incapacity of the undersigned and any Beneficial Owner(s), and every
obligation of the undersigned or any Beneficial Owners hereunder shall be
binding upon the heirs, executors, administrators, personal representatives,
trustees in bankruptcy, legal representatives, successors and assigns of the
undersigned and such Beneficial Owner(s).
The undersigned hereby represents, warrants and agrees that the undersigned
has full power and authority to tender, exchange, sell, assign and transfer the
Tendered Old Capital Securities and that the Trust will acquire good, marketable
and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances when the Tendered Old Capital Securities are acquired
by the Trust as contemplated herein, and the Tendered Old Capital Securities are
not subject to any adverse claims or proxies. The undersigned warrants and
agrees that the undersigned and each Beneficial Owner will, upon request,
execute and deliver any additional documents deemed by ComEd, the Trust or the
Exchange Agent to be necessary or desirable to complete the tender, exchange,
sale, assignment and transfer of the Tendered Old Capital Securities, and that
the undersigned will comply with its obligations under the
-3-
<PAGE>
Registration Rights Agreement. The undersigned has read and agrees to all of the
terms of the Exchange Offer.
The undersigned hereby represents and warrants that the information set
forth in Box 2 is true and correct.
BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF
TRANSMITTAL (OR DELIVERY OF AN AGENT'S MESSAGE IN LIEU HEREOF), THE UNDERSIGNED
HEREBY REPRESENTS AND WARRANTS THAT (i) NEITHER THE UNDERSIGNED NOR ANY
BENEFICIAL OWNER(S) IS AN "AFFILIATE" OF COMED OR THE TRUST, (ii) ANY NEW
CAPITAL SECURITIES TO BE RECEIVED BY THE UNDERSIGNED AND ANY BENEFICIAL OWNER(S)
ARE BEING ACQUIRED BY THE UNDERSIGNED AND ANY BENEFICIAL OWNER(S) IN THE
ORDINARY COURSE OF BUSINESS OF THE UNDERSIGNED AND ANY BENEFICIAL OWNER(S),
(iii) THE UNDERSIGNED AND EACH BENEFICIAL OWNER HAVE NO ARRANGEMENT OR
UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE
MEANING OF THE SECURITIES ACT) OF NEW CAPITAL SECURITIES TO BE RECEIVED IN THE
EXCHANGE OFFER, AND (iv) THE UNDERSIGNED AND ANY SUCH BENEFICIAL OWNER IS NOT
ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE MEANING
OF THE SECURITIES ACT) OF SUCH NEW CAPITAL SECURITIES.
A broker-dealer who holds Old Capital Securities for its own account as a
result of market-making activities or other trading activities and who receives
New Capital Securities in exchange for such Old Capital Securities pursuant to
the Exchange Offer may be deemed to be an "underwriter" within the meaning of
the Securities Act and will be required to deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Capital Securities. If the undersigned or any beneficial owner(s) is a broker-
dealer which acquired any of the Tendered Old Capital Securities for its own
account as the result of market-making activities or other trading activities,
such broker-dealer acknowledges that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of New Capital
Securities received in exchange for any of such Tendered Old Capital Securities
that were acquired for its own account as the result of market-making activities
or other trading activities (provided that, by so acknowledging and by
delivering a prospectus, such broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act).
Subject to certain provisions set forth in the Registration Rights
Agreement and to the limitations described in the Prospectus, ComEd and the
Trust have agreed that the Prospectus, as it may be amended or supplemented from
time to time, may be used by a Participating Broker-Dealer (as defined below) in
connection with resales of New Capital Securities received in exchange for Old
Capital Securities that were acquired by such Participating Broker-Dealer for
its own account as a result of market-making activities or other trading
activities, for a period ending 90 days after the Expiration Date or, if
earlier, when all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. In that regard, each broker-dealer who participates
in the Exchange Offer with respect to Old Capital Securities acquired for its
own account as a result of market-making or other trading activities (a
"Participating Broker-Dealer"), by tendering such Old Capital Securities and
executing this Letter of Transmittal or delivering an Agent's Message in lieu
hereof, agrees that, upon receipt of notice from ComEd or the Trust of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in the Prospectus untrue in any material
respect or which causes the Prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by reference
therein, in light of
-4-
<PAGE>
the circumstances under which they were made, not misleading or of the
occurrence of certain other events specified in the Registration Rights
Agreement, such Participating Broker-Dealer will suspend the sale of New Capital
Securities (or the New Guarantee or the New Junior Subordinated Debentures, as
applicable) pursuant to the Prospectus until ComEd or the Trust has amended or
supplemented the Prospectus to correct such misstatement or omission and has
furnished copies of the amended or supplemented Prospectus to such Participating
Broker-Dealer or ComEd or the Trust has given notice that the sale of the New
Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) may be resumed, as the case may be. As a result, a
Participating Broker-Dealer who intends to use the Prospectus in connection with
resales of New Capital Securities received in exchange for Old Capital
Securities pursuant to the Exchange Offer must notify ComEd and the Trust, or
cause ComEd and the Trust to be notified, on or prior to the Expiration Date,
that it is a Participating Broker-Dealer. Such notice may be given in the space
provided below or may be delivered to the Exchange Agent at the address set
forth in the Prospectus under "The Exchange Offer--Exchange Agent."
Any holder of Old Capital Securities who uses the Exchange Offer to
participate in a distribution of the New Capital Securities to be acquired in
the Exchange Offer, any broker-dealer who receives New Capital Securities in
exchange for Old Capital Securities that were purchased directly from the Trust
to resell pursuant to Rule 144A or any other available exemption under the
Securities Act, any person participating in the distribution of the Old Capital
Securities who receives New Capital Securities in the Exchange Offer and any
"affiliate" of the Company or the Trust who receives New Capital Securities in
the Exchange Offer (a) will not be able to rely on the interpretations of the
staff of the Division of Corporation Finance set forth in the above-described
interpretive letters and (b) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or other
transfer of such New Capital Securities, unless such sale is made pursuant to an
exemption from such requirements. Any such resale transaction must be made by
delivery of a prospectus containing the selling securityholder information
required by the rules of the Commission under the Securities Act.
Each New Capital Security will accumulate Distributions from the most
recent Distribution Date on the Old Capital Securities surrendered in exchange
for such New Capital Securities or, if no Distributions have been paid or
provided for on such Old Capital Securities, from January 24, 1997. As a result,
holders of Old Capital Securities that are accepted for exchange will not
receive accumulated Distributions on such Old Capital Securities for any period
from and after the most recent Distribution Date on such Old Capital Securities
or, if no Distributions have been paid or provided for on such Old Capital
Securities, from and after January 24, 1997, and such holders will be deemed to
have waived the right to receive any Distributions on such Old Capital
Securities. Except as stated in the Prospectus, this tender is irrevocable.
-5-
<PAGE>
<TABLE>
<CAPTION>
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES
====================================================================================================================
BOX 1
DESCRIPTION OF TENDERED OLD CAPITAL SECURITIES
(Attach additional signed pages, if necessary)
====================================================================================================================
<S> <C> <C> <C>
Certificate Aggregate
Name(s) and address(es) of Registered Holder(s), exactly as Number(s)* Liquidation Aggregate
name(s) appear(s) on Old Capital Securities Certificate(s) or on a of Old Amount Liquidation
security position listing Capital Represented Amount
(Please fill in, if blank) Securities by Certificate(s) Tendered**
- --------------------------------------------------------------------------------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
====================================================================================================================
</TABLE>
* Need not be completed by book-entry holders.
** Old Capital Securities may be tendered in whole or in part in
denominations of $1,000 (1 Old Capital Security) or any integral multiple
of $1,000 (1 Old Capital Security) in excess thereof, provided that if
any Old Capital Securities are tendered for exchange in part, the
untendered aggregate Liquidation Amount thereof must be $100,000 (100 Old
Capital Securities) or any integral multiple of $1,000 (1 Old Capital
Security) in excess thereof. All Old Capital Securities held shall be
deemed tendered unless a lesser number is specified in this column. See
Instruction 6.
<TABLE>
<CAPTION>
====================================================================================================================
BOX 2
BENEFICIAL OWNER(S)
====================================================================================================================
<S> <C>
State of Principal Residence of Each Beneficial Owner of Aggregate Liquidation Amount of Tendered Old Capital
Tendered Old Capital Securities Securities Held for Account of Beneficial Owner
====================================================================================================================
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
====================================================================================================================
</TABLE>
-6-
<PAGE>
If delivery of Old Capital Securities is to be made by book-entry transfer
to the account maintained by the Exchange Agent at DTC, then tenders of Old
Capital Securities must be effected in accordance with the procedures mandated
by DTC's Automated Tender Offer Program and the procedures set forth in the
Prospectus under the caption "The Exchange Offer - Procedures for Tendering Old
Capital Securities - Book Entry Transfer."
==========================================================================
BOX 3
(TO BE COMPLETED BY ELIGIBLE INSTITUTIONS ONLY)
===========================================================================
[ ] CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING
DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT
MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE
THE FOLLOWING:
Name of Tendering Institution _______________________________________
DTC Account Number __________________________________________________
Transaction Code Number _____________________________________________
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF
GUARANTEED DELIVERY IF TENDERED OLD CAPITAL SECURITIES
ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name of Registered Holder(s) ________________________________________
Window Ticket Number (if any) _______________________________________
Date of Execution of Notice of Guaranteed Delivery __________________
Name of Institution which Guaranteed Delivery _______________________
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution _______________________________________
DTC Account Number __________________________________________________
Transaction Code Number _____________________________________________
===========================================================================
-7-
<PAGE>
================================================================================
BOX 3 (continued)
[_] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD CAPITAL
SECURITIES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH
ABOVE.
[_] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name: ____________________________________________________________
Address: _________________________________________________________
================================================================================
-8-
<PAGE>
================================================================================
BOX 4
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 4, 7 and 8)
================================================================================
To be completed ONLY if the New Capital Securities are to be issued in the name
of someone other than the registered holder(s) of the Old Capital Securities
whose name(s) appear(s) above (Box 1) or if Old Capital Securities delivered by
book-entry transfer which are not accepted for exchange are to be returned by
credit to an account other than the account indicated above (Box 3).
Issue
[_] Old Capital Securities not tendered
[_] New Capital Securities
to:
Name(s): ______________________________________________________________________
Address: ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
(include Zip Code)
Area Code and
Telephone Number: _____________________________________________________________
Tax Identification or
Social Security No.: ___________________________________________________________
[_] Credit unexchanged Old Capital Securities delivered by book-entry transfer
to the DTC account set forth below.
_____________________________________
(DTC Account Number, if applicable)
================================================================================
-9-
<PAGE>
================================================================================
BOX 5
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4, 7 and 8)
================================================================================
To be completed ONLY if certificates for the New Capital Securities exchanged
for the Old Capital Securities and for untendered Old Capital Securities are to
be sent to someone other than the registered holder(s) whose name(s) appear(s)
above (Box 1), or to such registered holder(s) at an address other than that
shown above (Box 1).
Mail New Capital Securities and any untendered Old Capital Securities to:
Name(s): ______________________________________________________________________
(please print)
Address: ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
(include Zip Code)
Area Code and
Telephone Number: _____________________________________________________________
Tax Identification or
Social Security No.: __________________________________________________________
================================================================================
-10-
<PAGE>
================================================================================
BOX 6
USE OF GUARANTEED DELIVERY
================================================================================
[_] CHECK HERE ONLY IF OLD CAPITAL SECURITIES ARE BEING TENDERED BY MEANS OF A
NOTICE OF GUARANTEED DELIVERY. See Instruction 2. If this box is checked,
please provide the following information:
Name(s) of Registered Holder(s):
________________________________________________________________________________
________________________________________________________________________________
Date of Execution of Notice of Guaranteed Delivery:
________________________________________________________________________________
Name of Institution which Guaranteed Delivery:
________________________________________________________________________________
================================================================================
-11-
<PAGE>
================================================================================
BOX 7
TENDERING HOLDER SIGNATURE
(See Instructions 1, 4 and 7)
In Addition, Complete Substitute Form W-9 on page 13
================================================================================
<TABLE>
<CAPTION>
<S> <C>
X _________________________________________ Guarantee of Signature(s)
(If required by Instructions 4 and 7)
X _________________________________________ Authorized Signature
(Signature(s) of Registered Holder(s)
or Authorized Signatory) X
_____________________________________________
Note: The above lines must be signed by the
registered holder(s) of Old Capital Securities exactly Name: ______________________________________
as their name(s) appear(s) on certificate(s) for Old (please print)
Capital Securities hereby tendered or on a security
position listing, or by person(s) authorized to become Title: _____________________________________
the registered holder(s) by endorsements and Name of Firm:
documents transmitted herewith (including such ______________________________
opinions of counsel, certifications and other (Must be an Eligible Institution
information as may be required by ComEd or the as defined in Instruction 2)
Trust to comply with the restrictions on transfer
applicable to the Old Capital Securities). If signature Address: ___________________________________
is by a trustee, executor, administrator, guardian, ___________________________________
attorney-in-fact, officer, or other person acting in a ___________________________________
fiduciary or representative capacity, such person must (include Zip Code)
set forth his or her full title below. See Instruction 7.
Area Code and
Dated: ________________________________ Telephone Number: ________________________
Name(s): ________________________________
________________________________ Dated: _____________________________________
(please print)
Capacity: ________________________________
________________________________
(Full title)
Street Address: __________________________
________________________________
________________________________
(include Zip Code)
Area Code and
Telephone Number: ______________________
Tax Identification or Social Security Number(s):
________________________________
============================================================================================================
</TABLE>
-12-
<PAGE>
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Certificates.
Certificates for the Tendered Old Capital Securities, as well as a properly
completed and duly executed copy of this Letter of Transmittal, with any
required signature guarantees, a Substitute Form W-9 (or facsimile thereof) and
any other documents required by this Letter of Transmittal must be received by
the Exchange Agent at its address set forth herein on or prior to the Expiration
Date; provided, however, that book-entry transfers of Old Capital Securities may
be effected in accordance with the procedures mandated by DTC's Automatic Tender
Offer Program ("ATOP"). Certificates for Old Capital Securities, or book-entry
confirmation of a book-entry transfer of such Old Capital Securities into the
Exchange Agent's account at DTC, as well as this Letter of Transmittal (or
facsimile hereof or Agent's Message in lieu hereof), properly completed and duly
executed, with any required signature guarantees, and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at its address set forth herein on or prior to the Expiration Date or the
guaranteed delivery procedures set forth in Instruction 2 must be complied with.
THE METHOD OF DELIVERY OF CERTIFICATES FOR TENDERED OLD CAPITAL
SECURITIES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND SOLE RISK OF THE TENDERING HOLDER, AND DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS TO BE BY
MAIL, THE USE OF REGISTERED MAIL, WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither ComEd nor the Trust will accept any alternative, conditional
or contingent tenders. Each tendering holder, by execution of a Letter of
Transmittal (or facsimile thereof or delivery of an Agent's Message in lieu
thereof), waives any right to receive any notice of the acceptance of such
tender.
2. Guaranteed Delivery Procedures. Holders who wish to tender their
Old Capital Securities but (i) the certificates for such Old Capital Securities
are not immediately available, (ii) who cannot deliver their Old Capital
Securities, Letter of Transmittal and any other documents required by the Letter
of Transmittal to the Exchange Agent on or prior to the Expiration Date or (iii)
who cannot complete the procedures for delivery by book-entry transfer on a
timely basis, must tender their Old Capital Securities according to the
guaranteed delivery procedures set forth below, including completion of Box 6.
Pursuant to such procedures: (i) such tender must be made by or through an
Eligible Institution (as defined below); (ii) on or prior to the Expiration
Date, a completed and signed Notice of Guaranteed Delivery (by facsimile
transmission, mail or hand delivery), substantially in the form accompanying
this Letter of Transmittal, must have been delivered to the Exchange Agent; and
(iii) the certificates (or a book-entry confirmation (as defined in the
Prospectus)) representing the Tendered Old Capital Securities, in proper form
for transfer, together with a completed and signed Letter of Transmittal or, in
the case of a book-entry tender, an Agent's Message in lieu of this Letter of
Transmittal, with any required signature guarantees and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
within five New York Stock Exchange, Inc. trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in the
Prospectus under "The Exchange Offer--Procedures for Tendering Old Capital
Securities."
The Notice of Guaranteed Delivery may be delivered by hand or
overnight carrier, or transmitted by facsimile or mail to the Exchange Agent,
and must include a guarantee by an Eligible Institution in the form set forth in
such Notice. For Old Capital Securities to be properly tendered pursuant to the
guaranteed delivery procedure, the Exchange Agent must receive a Notice of
Guaranteed Delivery on or prior to the Expiration Date. As used herein and in
the Prospectus, "Eligible Institution" means a firm or other entity identified
in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, as "an
eligible guarantor institution," including (as such terms are defined therein)
(i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or
government securities broker
-13-
<PAGE>
or dealer; (iii) a credit union; (iv) a national securities exchange, registered
securities association or clearing agency; or (v) a savings association that is
a participant in a Securities Transfer Association.
3. Beneficial Owner Instructions to Registered Holders. Only a holder
in whose name the Old Capital Securities are registered on the books of the
registrar or on a security position listing (or the legal representative or
attorney-in-fact of such registered holder) may execute and deliver this Letter
of Transmittal (or an Agent's Message in lieu hereof). Any Beneficial Owner of
Old Capital Securities who is not the registered holder must arrange promptly
with the registered holder to execute and deliver this Letter of Transmittal on
his or her behalf through the execution and delivery to the registered holder of
the Instructions to Registered Holder from Beneficial Owner from accompanying
this Letter of Transmittal.
4. Guarantee of Signatures. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered
holder of Old Capital Securities tendered herewith, unless
such holder(s) has completed either the box entitled
"Special Issuance Instructions" (Box 4) or the box
entitled "Special Delivery Instructions" (Box 5) above, or
(ii) such Old Capital Securities are tendered for the account
of a firm that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the
signature(s) on this Letter of Transmittal. See Instruction 7.
5. Inadequate Space. If the space provided in the box captioned
"Description of Old Capital Securities" is inadequate, the certificate number(s)
and/or the aggregate Liquidation Amount of Old Capital Securities and any other
required information should be listed on a separate signed schedule which is
attached to this Letter of Transmittal.
6. Partial Tenders and Withdrawal Rights. Tenders of Old Capital
Securities will be accepted only in the aggregate Liquidation Amount of $1,000
(1 Old Capital Security) or any integral multiple in excess thereof, provided
that if any Old Capital Securities are tendered for exchange in part, the
untendered aggregate Liquidation Amount thereof must be $100,000 (100 Old
Capital Securities) or any integral multiple of $1,000 (1 Old Capital Security)
in excess thereof. If less than the entire aggregate Liquidation Amount of Old
Capital Securities evidenced by any certificate submitted is tendered, the
tendering holder should fill in the Liquidation Amount tendered in the column
labeled "Aggregate Liquidation Amount Tendered" of the box entitled "Description
of Old Capital Securities Tendered" (Box 1) above. The entire aggregate
Liquidation Amount of Old Capital Securities delivered to the Exchange Agent
will be deemed to have been tendered unless otherwise indicated. If the entire
aggregate Liquidation Amount of all Old Capital Securities is not tendered, new
certificate(s) for Old Capital Securities for the Liquidation Amount of Old
Capital Securities not tendered and New Capital Securities exchanged for any Old
Capital Securities tendered will be sent to the holder at his or her registered
address, unless a different address is provided in the appropriate box on this
Letter of Transmittal, as soon as practicable following the Expiration Date.
As set forth below, tenders of Old Capital Securities may be withdrawn
at any time on or prior to the Expiration Date. In order for a withdrawal to be
effective, a written or facsimile transmission of such notice of withdrawal must
be received by the Exchange Agent at one of its addresses set forth above on or
prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Old Capital Securities to be withdrawn, the
aggregate Liquidation Amount of Old Capital Securities to be withdrawn, and (if
certificates for Old Capital Securities have been tendered) the name of the
registered holder of the Old Capital Securities as set forth on the certificate
for the Old Capital Securities, if different from that of the person who
tendered such Old Capital Securities. If certificates for the Old Capital
Securities have been delivered or otherwise identified to the Exchange Agent,
then prior to the physical release of such certificates for the Old Capital
Securities, the tendering holder must submit the serial numbers shown on the
particular certificates for the Old Capital Securities to
-14-
<PAGE>
be withdrawn and the signature on the notice of withdrawal must be guaranteed by
an Eligible Institution, except in the case of Old Capital Securities tendered
for the account of an Eligible Institution. If Old Capital Securities have been
tendered pursuant to the procedures for book-entry transfer set forth in the
Prospectus under "The Exchange Offer--Procedures for Tendering Old Capital
Securities," the notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawn Old Capital Securities.
Withdrawals of tenders of Old Capital Securities may not be rescinded. Old
Capital Securities properly withdrawn will not be deemed validly tendered for
purposes of the Exchange Offer, but may be retendered at any subsequent time on
or prior to the Expiration Date by following any of the procedures described in
the Prospectus under "The Exchange Offer--Procedures for Tendering Old Capital
Securities."
All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by ComEd and the
Trust, in their sole discretion, whose determination shall be final and binding
on all parties. ComEd, the Trust, any affiliates or assigns of ComEd or the
Trust, the Exchange Agent or any other person shall not be under any duty to
give any notification of any irregularities in any notice of withdrawal or incur
any liability for failure to give any such notification. Any Old Capital
Securities which have been tendered but which are withdrawn will be returned to
the holder thereof promptly after withdrawal.
7. Signatures on the Letter of Transmittal; Bond Powers and
Endorsements. If this Letter of Transmittal is signed by the registered
holder(s) of the Tendered Old Capital Securities, the signature(s) must
correspond exactly with the name(s) as written on the face of the certificates,
or on a security position listing, without alteration, enlargement or any change
whatsoever.
If any of the Tendered Old Capital Securities are owned of record by
two or more joint owners, all such owners must sign this Letter of Transmittal.
If any Tendered Old Capital Securities are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate copies of the Letter of Transmittal documents as there are names in
which certificates are held.
If this Letter of Transmittal is signed by the registered holder(s) of
Tendered Old Capital Securities and New Capital Securities are to be issued (and
any untendered aggregate Liquidation Amount of Old Capital Securities is to be
reissued) to the registered holder(s), the registered holder(s) need not and
should not endorse any Tendered Old Capital Securities nor provide a separate
bond power. In any other case, such registered holder(s) must either duly
endorse the certificate(s) for Old Capital Securities tendered or transmit a
properly executed bond power with the certificate(s), with the signature(s) on
the endorsement or bond power guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of any Old Capital Securities listed, the certificates must
be endorsed or accompanied by appropriate bond powers, in each case, signed
exactly as the name or names of the registered holder(s) appear(s) on the
certificates, and also must be accompanied by such opinions of counsel,
certifications and other information as ComEd or the Trust may require in
accordance with the restrictions on transfer applicable to the Old Capital
Securities. The signature on the endorsement or bond power must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal, any certificate for Old Capital
Securities, bond power, power of attorney or any other document required by this
Letter of Transmittal is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, such person should so indicate when signing and,
unless waived by ComEd and the Trust, proper evidence satisfactory to ComEd and
the Trust, in their sole discretion, of such person's authority to so act must
be submitted with this Letter of Transmittal.
Endorsements on certificates or signatures on bond powers required by
this Instruction 7 must be guaranteed by an Eligible Institution.
8. Special Issuance and Special Delivery Instructions. If New Capital
Securities are to be issued in the name of a person other than the registered
holder(s) of Tendered Old Capital Securities or are to be sent to a name
-15-
<PAGE>
and address other than the name and address of the person signing this Letter of
Transmittal or if Old Capital Securities delivered by book-entry transfer which
are not accepted for exchange are to be returned by credit to a DTC account
other than that of the person signing this Letter of Transmittal, the
appropriate boxes (Box 4 and/or Box 5) on this Letter of Transmittal should be
completed. Certificates for Old Capital Securities not exchanged will be
returned by mail or, if tendered by book-entry transfer, by crediting the
account indicated above maintained at DTC. See Instruction 6.
9. Transfer Taxes. Holders who tender their Old Capital Securities for
exchange will not be obligated to pay any transfer taxes in connection
therewith. If, however, New Capital Securities are to be delivered to, or are to
be issued in the name of, any person other than the registered holder of the
Tendered Old Capital Securities, or if a transfer tax is imposed for any reason
other than the exchange of Old Capital Securities in connection with the
Exchange Offer, then the amount of any such transfer tax (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
10. Tax Identification Number. A holder whose Tendered Old Capital
Securities are accepted for exchange should provide the Exchange Agent with such
holder's correct taxpayer identification number ("TIN"), which, in the case of a
holder who is an individual, is his or her social security number. If the
Exchange Agent is not provided with the correct TIN, the holder or other payee
may be subject to a $50 penalty imposed by the Internal Revenue Service (the
"IRS"). In addition, payments to such holders or other payees with respect to
Old Capital Securities exchanged pursuant to the Exchange Offer may be subject
to 31% backup withholding.
To prevent backup withholding with respect to payments of
distributions on the New Capital Securities, each tendering holder should
provide such holder's correct TIN by completing the Substitute Form W-9 set
forth herein, certifying that the TIN provided is correct (or that such holder
is awaiting a TIN), and that the holder is not subject to backup withholding
because (i) the holder is exempt from backup withholding, or (ii) the holder has
not been notified by the Internal Revenue Service that such holder is subject to
backup withholding as a result of failure to report all interest or dividends,
or (iii) the Internal Revenue Service has notified the holder that such holder
is no longer subject to backup withholding.
If the New Capital Securities will be registered in more than one name
or are not in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
information on which TIN to report. Certain holders (including, among others,
all corporations and certain foreign individuals) are not subject to these
backup withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status. See
the enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional instructions.
ComEd and the Trust reserve the right in their sole discretion to take
whatever steps are necessary to comply with the Trust's obligation regarding
backup withholding. Any amount paid as backup withholding will be creditable
against a holder's tax liability.
11. Validity of Tenders. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
Tendered Old Capital Securities will be determined by ComEd and the Trust, in
their sole discretion, whose determination shall be final and binding on all
parties. ComEd and the Trust reserve the absolute right, in their sole and
absolute discretion, to reject any and all tenders determined by them not to be
in proper form or the acceptance of which, or exchange for, may, in the view of
ComEd and the Trust or of counsel to ComEd and the Trust, be unlawful. ComEd and
the Trust also reserve the absolute right, subject to applicable law, to waive
any of the conditions of the Exchange Offer as set forth in the Prospectus under
"The Exchange Offer --Conditions to the Exchange Offer" or any condition, defect
or irregularity in any tender of Old Capital Securities of any particular holder
whether or not similar conditions, defects or irregularities are waived in the
case of other
-16-
<PAGE>
holders. The interpretation of the terms and conditions of the Exchange Offer
(including this Letter of Transmittal and the instructions hereto) by ComEd and
the Trust will be final and binding on all parties. No tenders of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. ComEd, the Trust, any
affiliates or assigns of ComEd or the Trust, the Exchange Agent or any other
person shall not be under any duty to give any notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification.
12. Mutilated, Lost, Stolen or Destroyed Certificates. Any tendering
holder whose Old Capital Securities have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instruction. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing mutilated, lost, stolen or
destroyed certificate(s) have been followed.
13. Questions, Requests for Assistance and Additional Copies.
Questions and requests for assistance and requests for additional copies of the
Prospectus and this Letter of Transmittal may be directed to the Exchange Agent
at the address and telephone number set forth on the front of this Letter of
Transmittal. Holders may also contact their broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Exchange Offer.
14. Acceptance of Tendered Old Capital Securities and Issuance of New
Capital Securities; Return of Old Capital Securities. Subject to the terms and
conditions of the Exchange Offer, ComEd and the Trust will accept for exchange
all validly tendered Old Capital Securities as soon as practicable after the
Expiration Date and will issue New Capital Securities therefor as soon as
practicable thereafter. For purposes of the Exchange Offer, ComEd and the Trust
shall be deemed to have accepted the Tendered Old Capital Securities when, as
and if ComEd and the Trust have given written or oral notice thereof to the
Exchange Agent. If any Tendered Old Capital Securities are not exchanged
pursuant to the Exchange Offer for any reason, such unexchanged Old Capital
Securities will be returned, without expense, to the undersigned at the address
shown below or at a different address as may be indicated herein under "Special
Issuance and Special Delivery Instructions."
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF OR AN
AGENT'S MESSAGE IN LIEU HEREOF) AND ALL OTHER REQUIRED DOCUMENTS MUST BE
RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
-17-
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer.
Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-
0000. Employer identification number have nine digits separated by only one
hyphen: i.e. 00-0000000. The table below will help determine the number to give
the payer.
<TABLE>
<CAPTION>
============================================================ =================================================================
Give the SOCIAL SECURITY Give the EMPLOYER
For this type of account number of -- For this type of account IDENTIFICATION NUMBER 0f--
============================================================ =================================================================
<S> <C> <C> <C>
1. Individual The individual 5. Sole proprietorship The Owner/3/
account
2. Two or more individuals The actual owner of the 6. A valid trust, estate, Legal entity (Do not furnish
(joint account) account or, if combined funds, or pension trust the identifying number of the
the first individual on the personal representative or
account/1/ trustee unless the legal entity
itself is not designated in the
account title.)/4/
3. Custodian account of a The minor/2/ 7. Corporate The Corporation
minor
(Uniform Gift to Minors
Act)
4. a. The usual revocable The grantor-trustee/1/ 8. Association, club, The organization
savings trust account religious, charitable,
(grantor is also educational, or other
trustee) tax-exempt organization
b. So-called trust The actual owner/1/
account that is not a
legal or valid trust
under State law
9. Partnership The partnership
10. A broker or registered The broker or nominee
nominee
11. Account with the The public entity
Department of Agriculture
in the name of a public
entity (such as a State or
local government, school
district, or person) that
receives agricultural
program payments
============================================================ ==================================================================
</TABLE>
/1/ List first and circle the name of the person whose number you furnish.
/2/ Circle the minor's name and furnish the minor's social security number.
/3/ You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your SSN or EIN.
/4/ List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number
will be considered to be that of the first name issued.
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<PAGE>
Section references are to the Internal Revenue Code.
Purpose of Form.--A person who is required to file an information return with
the IRS must get your correct TIN to report income paid to you, real estate
transactions, mortgage interest you paid, the acquisition or abandonment of
secured property, cancellation of debt, or contributions you made to an IRA. Use
Form W-9 to give your correct TIN to the requester (the person requesting your
TIN) and, when applicable, (1) to certify the TIN you are giving is correct (or
you are waiting for a number to be issued), (2) to certify you are not subject
to backup withholding, or (3) to claim exemption from backup withholding if you
are an exempt payee. Giving your correct TIN and making the appropriate
certifications will prevent certain payments from being subject to backup
withholding.
What is Backup Withholding?--Persons making certain payments to you must
withhold and pay to the IRS 31% of such payments under certain conditions. This
is called "backup withholding." Payments that could be subject to backup
withholding include interest, dividends, broker and barter exchange
transactions, rents, royalties, nonemployee pay, and certain payments from
fishing boat operators. Real estate transactions are not subject to backup
withholding.
If you give the requester your correct TIN, make the proper certifications,
and report all your taxable interest and dividends on your tax return, your
payments will not be subject to backup withholding. Payments you receive will be
subject to backup withholding if:
1. You do not furnish your TIN to the requester, or
2. The IRS tells the requester that you furnished an incorrect TIN,
or
3. The IRS tells you that you are subject to backup withholding
because you did not report all your interest and dividends on your tax
return (for reportable interest and dividends only), or
4. You do not certify to the requester that you are not subject to
backup withholding under 3 above (for reportable interest and dividend
accounts opened after 1983 only), or
5. You do not certify your TIN. See the Part III Instructions for
exceptions.
Certain payees and payments are exempt from backup withholding and
information reporting. See the Part II Instructions and the separate
Instructions for the Requester of Form W-9.
How to Get a TIN.--If you do not have a TIN, apply for one immediately. To
apply, get Form SS-5, Application for a Social Security Number Card (for
individuals), from your local office of the Social Security Administration, or
Form SS-4, Application for Employer Identification Number (for businesses and
all other entities), from your local IRS office.
If you do not have a TIN, write "Applied For" in the space for the TIN in
Part I, sign and date the form, and give it to the requester. Generally, you
will then have 60 days to get a TIN and give it to the requester. If the
requester does not receive your TIN within 60 days, backup withholding, if
applicable, will begin and continue until you furnish your TIN.
Note: Writing "Applied For" on the form means that you have already applied for
a TIN OR that you intend to apply for one soon.
As soon as you receive your TIN, complete another Form W-9, include your
TIN, sign and date the form, and give it to the requester.
-19-
<PAGE>
PENALTIES
Failure To Furnish TIN.--If you fail to furnish your correct TIN to a requester,
you are subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
Civil Penalty for False Information With Respect to Withholding.--If you make a
false statement with no reasonable basis that results in no backup withholding,
you are subject to a $500 penalty.
Criminal Penalty for Falsifying Information.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
Misuse of TINs.--If the requester discloses or uses TINs in violation of Federal
law, the requester may be subject to civil and criminal penalties.
SPECIFIC INSTRUCTIONS
Name.--If you are an individual, you must generally enter the name shown on your
social security card. However, if you have changed your last name, for instance,
due to marriage, without informing the Social Security Administration of the
name change, please enter your name, the last name shown on your social security
card and your new last name.
Sole Proprietor.--You must enter your individual name. (Enter either your SSN or
EIN in Part 1). You may also enter your business name or "doing business as"
name on the business name line. Enter your name as shown on your social security
card and business name as it was used to apply for your EIN on Form SS-4.
Part I--Taxpayer Identification Number (TIN)
You must enter your TIN in the appropriate box. If you are a sole proprietor,
you may enter your SSN or EIN. Also see the chart on page 20 for further
clarification of name and TIN combinations. If you do not have a TIN, follow the
instructions under How To Get A TIN on page 21.
Part II--For Payees Exempt From Backup Withholding
Individuals (including sole proprietors) are not exempt from backup withholding.
Corporations are exempt from backup withholding for certain payments, such as
interest and dividends.
If you are exempt from backup withholding, you should still complete this
form to avoid possible erroneous backup withholding. Enter your correct TIN in
Part I, write "Exempt" in Part II, and sign and date the form. If you are a
nonresident alien or a foreign entity not subject to backup withholding, give
the requester a completed Form W-8, Certificate of Foreign Status.
Part III--Certification
For a joint account, only the person whose TIN is shown in Part I should sign.
1. Interest, Dividend, and Barter Exchange Accounts Opened Before 1984
and Broker Accounts Considered Active During 1983. You must give your correct
TIN, but you do not have to sign the certification.
2. Interest, Dividend, Broker, and Barter Exchange Accounts Opened After
1983 and Broker Accounts Considered Inactive During 1983. You must sign the
certification or backup withholding will apply. If you are subject to backup
withholding and you are merely providing your correct TIN to the requester, you
must cross out Item 2 in the certification before signing the form.
-20-
<PAGE>
3. Real Estate Transactions. You must sign the certification. You may
cross out Item 2 of the certification.
4. Other Payments. You must give your correct TIN, but you do not have to
sign the certification unless you have been notified of an incorrect TIN. Other
payments include payments made in the course of the requester's trade or
business for rents, royalties, goods (other than bills for merchandise), medical
and health care services, payments to a nonemployee for services (including
attorney and accounting fees), and payments to certain fishing boat crew
members.
5. Mortgage Interest Paid by You, Acquisitions or Abandonment of Secured
Property, Cancellation of Debt, or IRA Contributions. You must give your correct
TIN, but you do not have to sign the certification.
Privacy Act Notice
Section 6109 requires you to give your correct TIN to persons who must file
information returns with the IRS to report interest, dividends, and certain
other income paid to you, mortgage interest you paid, the acquisition or
abandonment of secured property, cancellation of debt, or contributions you made
to an IRA. The IRS uses the numbers for identification purposes and to help
verify the accuracy of your tax return. You must provide your TIN whether or not
you are required to file a tax return. Payers must generally withhold 31% of
taxable interest, dividend, and certain other payments to a payee who does not
give a TIN to a payer. Certain penalties may also apply.
-21-
<PAGE>
Exhibit (99)-2
ComEd Financing II
Form S-4 File No. 333-
NOTICE OF GUARANTEED DELIVERY
for Tender of
8.50% Series A Capital Securities
(Liquidation Amount $1,000 per Capital Security)
of
ComEd Financing II
As set forth in the Exchange Offer (as defined below), this Notice of
Guaranteed Delivery (or a facsimile hereof) or one substantially equivalent
hereto or the electronic form used by The Depository Trust Company ("DTC") for
this purpose must be used to accept the Exchange Offer if certificates for 8.50%
Series A Capital Securities (the "Old Capital Securities") of ComEd Financing
II, a Delaware statutory business trust (the "Trust"), are not immediately
available to the registered holder of such Old Capital Securities, or if a
participant in DTC is unable to complete the procedures for book-entry transfer
on a timely basis of Old Capital Securities to the account maintained by
Wilmington Trust Company (the "Exchange Agent") at DTC, or if time will not
permit all documents required by the Exchange Offer to reach the Exchange Agent
prior to 5:00 p.m., New York City time, on __________, 1997, unless extended
(the "Expiration Date"). This Notice of Guaranteed Delivery (or a facsimile
hereof) or one substantially equivalent hereto or the electronic form used by
DTC may be delivered by mail (registered or certified mail is recommended), by
facsimile transmission, by hand or overnight carrier to the Exchange Agent. See
"The Exchange Offer - Procedures for Tendering Old Capital Securities."
Capitalized terms used herein and not defined herein have the meanings assigned
to them in the Exchange Offer.
The Exchange Agent is:
Wilmington Trust Company
<TABLE>
<S> <C> <C>
By Registered or Certified Mail: By Facsimile: By Hand/Overnight Carrier:
Wilmington Trust Company Wilmington Trust Company Wilmington Trust Company
1100 North Market Street Attn: Corporate Trust 1100 North Market Street
Rodney Square North Administration Rodney Square North
Wilmington, Delaware 19890 (302) 651-8882 Wilmington, Delaware 19890
Attn: Corporate Trust Attn: Corporate Trust
Administration (For Eligible Institutions Only) Administration
Confirm by Telephone:
(302) 651-1428
For Information Call:
(302) 651-1428
</TABLE>
Delivery of this Notice of Guaranteed Delivery to an address other than as
set forth above or transmission of this Notice of Guaranteed Delivery via a
facsimile number other than the number listed above will not constitute a valid
delivery.
<PAGE>
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an Eligible Institution (as defined therein) under the
instructions thereto, such signature guarantee must appear in the applicable
space provided in the signature box on the Letter of Transmittal.
Ladies and Gentlemen:
The undersigned hereby tenders to the Trust and to Commonwealth Edison
Company, an Illinois corporation ("ComEd"), the aggregate liquidation amount of
Old Capital Securities indicated below pursuant to the guaranteed delivery
procedures and upon the terms and subject to the conditions set forth in the
accompanying Prospectus dated ___________, 1997 (as the same may be amended or
supplemented from time to time, the "Prospectus") and in the related Letter of
Transmittal (which together with the Prospectus constitute the "Exchange
Offer"), receipt of which is hereby acknowledged.
The undersigned hereby represents, warrants and agrees that the undersigned
has full power and authority to tender, exchange, sell, assign, and transfer the
Tendered Old Capital Securities and that the Trust will acquire good, marketable
and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances when the Tendered Old Capital Securities are acquired
by the Trust as contemplated herein, and the Tendered Old Capital Securities are
not subject to any adverse claims or proxies. The undersigned warrants and
agrees that the undersigned and each Beneficial Owner will, upon request,
execute and deliver any additional documents deemed by ComEd, the Trust or the
Exchange Agent to be necessary or desirable to complete the tender, exchange,
sale, assignment and transfer of the Tendered Old Capital Securities, and that
the undersigned will comply with its obligations under the Registration Rights
Agreement. The undersigned has read and agrees to all of the terms of the
Exchange Offer.
BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS NOTICE OF GUARANTEED
DELIVERY, THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT (i) NEITHER THE
UNDERSIGNED NOR ANY BENEFICIAL OWNER(S) IS AN "AFFILIATE" OF COMED OR THE TRUST,
(ii) ANY NEW CAPITAL SECURITIES TO BE RECEIVED BY THE UNDERSIGNED AND ANY
BENEFICIAL OWNER(S) ARE BEING ACQUIRED BY THE UNDERSIGNED AND ANY BENEFICIAL
OWNER(S) IN THE ORDINARY COURSE OF BUSINESS OF THE UNDERSIGNED AND ANY
BENEFICIAL OWNER(S), (iii) THE UNDERSIGNED AND EACH BENEFICIAL OWNER HAVE NO
ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION
(WITHIN THE MEANING OF THE SECURITIES ACT) OF NEW CAPITAL SECURITIES TO BE
RECEIVED IN THE EXCHANGE OFFER, AND (iv) THE UNDERSIGNED OR ANY SUCH BENEFICIAL
OWNER IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION
(WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH NEW CAPITAL SECURITIES.
A broker-dealer who holds Old Capital Securities for its own account as a
result of market-making activities or other trading activities and who receives
New Capital Securities in exchange for such Old Capital Securities pursuant to
the Exchange Offer may be deemed to be an "underwriter" within the meaning of
the Securities Act and will be required to deliver prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Capital Securities. If the undersigned or any beneficial owner(s) is a broker-
dealer which acquired any of the Tendered Old Capital Securities for its own
account as the result of market-making activities or other trading activities,
such broker-dealer acknowledges that it will deliver a prospectus meeting the
requirements of the Securities Act in connection
-2-
<PAGE>
with any resale of New Capital Securities received in exchange for any of such
Tendered Old Capital Securities that were acquired for its own account as the
result of market-making activities or other trading activities (provided that,
by so acknowledging and by delivering a prospectus, such broker-dealer will not
be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act).
ALL QUESTIONS AS TO THE FORM OF DOCUMENTS, VALIDITY, ELIGIBILITY (INCLUDING
TIME OF RECEIPT) AND ACCEPTANCE FOR EXCHANGE OF TENDERED OLD CAPITAL SECURITIES
WILL BE DETERMINED BY COMED AND THE TRUST, IN THEIR SOLE DISCRETION, WHOSE
DETERMINATION SHALL BE FINAL AND BINDING ON ALL PARTIES. COMED AND THE TRUST
RESERVE THE ABSOLUTE RIGHT, IN THEIR SOLE AND ABSOLUTE DISCRETION, TO REJECT ANY
AND ALL TENDERS DETERMINED BY COMED AND THE TRUST NOT TO BE IN PROPER FORM OR
THE ACCEPTANCE OF WHICH, OR EXCHANGE FOR, MAY, IN THE VIEW OF COMED AND THE
TRUST OR OF COUNSEL TO COMED AND THE TRUST, BE UNLAWFUL.
ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE
DEATH OR INCAPACITY OF THE UNDERSIGNED AND EVERY OBLIGATION OF THE UNDERSIGNED
HEREUNDER SHALL BE BINDING UPON THE HEIRS, EXECUTORS, ADMINISTRATORS, PERSONAL
REPRESENTATIVES, TRUSTEES IN BANKRUPTCY, LEGAL REPRESENTATIVES, SUCCESSORS AND
ASSIGNS OF THE UNDERSIGNED.
Name(s) of Registered Holder(s):
------------------------------------------------
- --------------------------------------------------------------------------------
Please Print
Address(es):
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
Area Code and Tel. No(s):
-------------------------------------------------------
X
-------------------------------------------------------------------------
X
-------------------------------------------------------------------------
Signature(s) of Owner(s) or Authorized Signatory
-3-
<PAGE>
Must be signed by the registered holder(s) of the Tendered Old Capital
Securities as their name(s) appear(s) on certificates for such Tendered Old
Capital Securities, or on a security position listing, or by person(s)
authorized to become registered holder(s) by endorsement and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer or other
person acting in a fiduciary or representative capacity, such person must set
forth his or her full title below.
<TABLE>
<S> <C> <C>
Aggregate Liquidation
Certificate No(s) Amount Represented Aggregate Liquidation
(if available) by Certificate Amount Tendered
-------------- ---------------------- ---------------
- ---------------------- ---------------------- ------------------------
- ---------------------- ---------------------- ------------------------
- ---------------------- ---------------------- ------------------------
</TABLE>
If Old Capital Securities will be delivered by book-entry transfer to The
Depository Trust Company, provide the following information:
Signature:
____________________________________________________________________
Account Number:
_______________________________________________________________
Date:
_________________________________________________________________________
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
-4-
<PAGE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees delivery to the
Exchange Agent, at one of its addresses set forth above, either certificates for
the Old Capital Securities tendered hereby, in proper form for transfer, or
confirmation of the book-entry transfer of such Old Capital Securities to the
Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to
the procedures for book-entry transfer set forth in the Prospectus, in either
case together with one or more properly completed and duly executed Letter(s) of
Transmittal (or facsimile thereof or an Agent's Message in lieu thereof) and any
other documents required by the Letter of Transmittal, all within five (5)
business days after the date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must communicate the guarantee to the
Exchange Agent and must deliver the Letter of Transmittal and certificates for
the Old Capital Securities tendered hereby to the Exchange Agent within the time
period shown hereon and that failure to do so could result in a financial loss
to the undersigned.
<TABLE>
<S> <C>
_______________________________ _________________________________
Firm Authorized Signature
_______________________________ Name _________________________________
Address (Please Type or Print)
_______________________________ Title ________________________________
Zip Code
Dated __________________________, 1997
Area Code and Tel. No.: ______________________________________________________
</TABLE>
DO NOT SEND CERTIFICATES FOR OLD CAPITAL SECURITIES WITH THIS NOTICE OF
GUARANTEED DELIVERY. ACTUAL SURRENDER OF OLD CAPITAL SECURITIES MUST BE MADE
PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
-5-
<PAGE>
Exhibit (99)-3
ComEd Financing II
Form S-4 File No. 333-
ComEd Financing II
OFFER TO EXCHANGE
Its
8.50% Series B Capital Securities
Which Have Been Registered Under the Securities Act of 1933
for Any and All of Its Outstanding
8.50% Series A Capital Securities
(Liquidation Amount $1,000 per Capital Security)
To Our Clients:
Enclosed for your consideration are the Prospectus, dated ___________, 1997
(as the same may be amended and supplemented from time to time, the
"Prospectus"), and the related Letter of Transmittal (which together with the
Prospectus constitute the "Exchange Offer"), in connection with the offer by
ComEd Financing II, a Delaware statutory business trust (the "Trust), to
exchange the Trust's 8.50% Series B Capital Securities ( the "New Capital
Securities") which have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), for any and all of the Trust's outstanding 8.50%
Series A Capital Securities (the "Old Capital Securities"), upon the terms and
subject to the conditions set forth in the Exchange Offer.
The Exchange Offer will expire at 5:00 p.m., New York City time, on
____________, 1997, unless extended (the "Expiration Date").
We are holding Old Capital Securities for your account. An exchange of the
Old Capital Securities can be made only by us and pursuant to your instructions.
The Letter of Transmittal is furnished to you for your information only and
cannot be used by you to exchange the Old Capital Securities held by us for your
account. The Exchange Offer provides a procedure for holders to tender by means
of guaranteed delivery.
We request information as to whether you wish us to exchange any or all of
the Old Capital Securities held by us for your account upon the terms and
subject to the conditions of the Exchange Offer.
Your attention is directed to the following:
1. The forms and terms of the New Capital Securities are the same in
all material respects as the forms and terms of the Old Capital Securities
(which they replace) except that the New Capital Securities have been
registered under the Securities Act. Distributions on the New Capital
Securities will accumulate from the most recent January 15 or July 15 on
which distributions were paid or provided for on the Old Capital
Securities, or, if no distributions have been paid or provided for on the
Old Capital Securities, from January 24, 1997.
2. Based on an interpretation by the staff of the Division of
Corporation Finance of the Securities and Exchange Commission (the "SEC")
as set forth in certain interpretive letters addressed to third parties in
other transactions, Commonwealth Edison Company, an Illinois corporation
("ComEd"), and the Trust believe that a holder of Old Capital Securities
<PAGE>
(other than a holder who is (a) a broker-dealer who purchased the Old
Capital Securities directly from the Trust to resell pursuant to Rule 144A
under the Securities Act or any other available exemption under the
Securities Act, (b) a person participating in the distribution of the Old
Capital Securities or (c) a person who is an "affiliate" of ComEd or the
Trust) who exchanges Old Capital Securities in the Exchange Offer for New
Capital Securities and then resells such New Capital Securities will be
viewed by the staff no differently than a non-affiliated purchaser of
registered securities who purchases such securities in a registered primary
offering of securities and, after completion of such registered offering,
may resell the New Capital Securities without further compliance with the
registration and prospectus delivery provisions of the Securities Act,
provided that such New Capital Securities are acquired in the ordinary
course of such holder's business and that such holder is not participating,
and has no arrangement or understanding with any person to participate, in
a distribution (within the meaning of the Securities Act) of such New
Capital Securities. See "Brown & Wood LLP,") SEC No-Action Letter
(available February 7, 1997), "Shearman & Sterling," SEC No-Action Letter
(available July 2, 1993), "Morgan Stanley & Co., Inc.," SEC No-Action
Letter (available June 5, 1991) and "Exxon Capital Holdings Corporation,"
SEC No-Action Letter (available May 13, 1988).
3. The Exchange Offer is not conditioned on any minimum aggregate
liquidation amount of Old Capital Securities being tendered except that Old
Capital Securities may be tendered only in an aggregate liquidation amount
of $1,000 (1 Old Capital Security) and integral multiples in excess
thereof, provided that if any Old Capital Securities are tendered for
exchange in part, the untendered aggregate Liquidation Amount thereof must
be $100,000 (100 Old Capital Securities) or any integral multiple of $1,000
(1 Old Capital Security) in excess thereof. The New Capital Securities
will be exchanged for the Old Capital Securities at the rate of one New
Capital Security ($1,000 liquidation amount) for each Old Capital Security
($1,000 liquidation amount).
4. Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, ComEd and the Trust will not be required
to accept any Old Capital Securities for exchange or to exchange any New
Capital Securities for any Old Capital Securities and may terminate the
Exchange Offer (whether or not any Old Capital Securities have been
accepted for exchange) or may waive any conditions to or amend the Exchange
Offer, if any of the conditions described in the Prospectus under "The
Exchange Offer - Conditions of the Exchange Offer" have occurred or exist
or have not been satisfied.
5. Tendered Old Capital Securities may be withdrawn at any time prior
to 5:00 p.m., New York City time, on the Expiration Date, if such Old
Capital Securities have not previously been accepted for exchange pursuant
to the Exchange Offer.
6. Any transfer taxes applicable to the exchange of Old Capital
Securities pursuant to the Exchange Offer will be paid by ComEd, except as
otherwise provided in Instruction 9 of the Letter of Transmittal.
If you wish to have us tender any or all of your Old Capital Securities,
please so instruct us by completing, detaching and returning to us the
instruction form attached hereto. An envelope to return your instructions is
enclosed. If you authorize a tender of your Old Capital Securities, the entire
liquidation amount of Old Capital Securities held for your account will be
tendered unless otherwise specified on the instruction form. Your instructions
should be forwarded to us in ample time to permit us to submit a tender on your
behalf by the Expiration Date.
-2-
<PAGE>
The Exchange Offer is not being made to, nor will tenders be accepted from
or on behalf of, holders of the Old Capital Securities in any jurisdiction in
which the making of the Exchange Offer or acceptance thereof would not be in
compliance with the laws of such jurisdiction or would otherwise not be in
compliance with any provision of any applicable security law.
-3-
<PAGE>
ComEd Financing II
OFFER TO EXCHANGE
Its
8.50% Series B Capital Securities
Which Have Been Registered Under the Securities Act of 1933
for Any and All of Its Outstanding
8.50% Series A Capital Securities
(Liquidation Amount $1,000 per Capital Security)
Instructions to Registered Holder from Beneficial Owner
The undersigned acknowledge(s) receipt of your letter and the enclosed
Prospectus and the related Letter of Transmittal in connection with the offer by
the Trust to exchange New Capital Securities for Old Capital Securities.
This will instruct you to tender the liquidation amount of Old Capital
Securities indicated below held by you for the account of the undersigned, upon
the terms and subject to the conditions set forth in the Prospectus and the
related Letter of Transmittal.
The undersigned represents that (i) it is not an "affiliate" of ComEd
or the Trust, (ii) any New Capital Securities to be received by the undersigned
are being acquired in the ordinary course of the undersigned's business, (iii)
the undersigned has no arrangement or understanding with any person to
participate in a distribution (within the meaning of the Securities Act) of such
New Capital Securities, and (iv) the undersigned is not engaged in, and does not
intend to engage in, a distribution (within the meaning of the Securities Act)
of such New Capital Securities.
A broker-dealer who holds Old Capital Securities for its own account
as a result of market-making activities or other trading activities and who
receives New Capital Securities in exchange for such Old Capital Securities
pursuant to the Exchange Offer may be deemed to be an "underwriter" within the
meaning of the Securities Act and will be required to deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such New Capital Securities. If the undersigned is a broker-dealer which
acquired any of the Tendered Old Capital Securities for its own account as the
result of market-making activities or other trading activities (a "Participating
Broker-Dealer"), such broker-dealer acknowledges that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of New Capital Securities received in exchange for any of such Tendered
Old Capital Securities that were acquired for its own account as the result of
market-making activities or other trading activities. Notwithstanding the
foregoing, the undersigned does not thereby admit that it is an "underwriter"
within the meaning of the Securities Act.
The undersigned understands that ComEd and the Trust have agreed that,
subject to the provisions of the Registration Rights Agreement (as defined in
the Prospectus) and to the limitations described under "The Exchange Offer -
Resales of New Capital Securities" in the Prospectus, the Prospectus, as it may
be amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of New Capital Securities received in
exchange for Old Capital Securities that were acquired by such Participating
Broker-Dealer for its own account as a result of market-making activities or
other trading activities, for a period ending 90 days after the Expiration Date
or, if earlier, when all such New Capital Securities have been disposed of by
such Participating Broker-Dealer. If the undersigned is a Participating Broker-
Dealer, the undersigned agrees that, upon receipt of notice from ComEd or the
Trust of the occurrence of any event or the discovery of any fact which makes
any statement contained or incorporated by reference in the Prospectus untrue in
any material respect or which causes the Prospectus to omit to state a material
fact necessary in order to make the statements contained or incorporated by
reference therein, in light of the circumstances under which they were made, not
misleading or of the occurrence of certain other events
<PAGE>
specified in the registration rights agreement, such Participating
Broker-Dealer will suspend the sale of New Capital Securities pursuant to the
Prospectus until ComEd or the Trust has amended or supplemented the Prospectus
to correct such misstatement or omission and has furnished copies of the amended
or supplemented Prospectus to such Participating Broker-Dealer or ComEd or the
Trust has given notice that the sale of the New Capital Securities may be
resumed, as the case may be.
Sign Here
__________________________________________
Signature(s)
Securities which are to be tendered:
Tender all of the Old Capital Securities
Aggregate Liquidation Amount*
----------------------------
[_] Old Capital Securities______________
________________________________________
Name(s) (Please Print)
________________________________________
Address
________________________________________
Zip Code
________________________________________
Area Code and Telephone No.
Dated: _________________, 1997
________________________
*Unless otherwise indicated, it will be assumed that all of the Old Capital
Securities listed are to be tendered.
-2-
<PAGE>
Exhibit (99)-4
ComEd Financing II
Form S-4 File No. 333-
ComEd Financing II
OFFER TO EXCHANGE
Its
8.50% Series B Capital Securities
Which Have Been Registered Under the Securities Act of 1933
for Any and All of Its Outstanding
8.50% Series A Capital Securities
(Liquidation Amount $1,000 per Capital Security)
____________, 1997
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees:
We are enclosing herewith an offer by ComEd Financing II, a Delaware
statutory business trust (the "Trust"), to exchange the Trust's new 8.50% Series
B Capital Securities (the "New Capital Securities") which have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), for any and
all of the Trust's outstanding 8.50% Series A Capital Securities (the "Old
Capital Securities"), upon the terms and subject to the conditions set forth in
the accompanying Prospectus, dated ___________, 1997 (as the same amended and
supplemented from time to time, the "Prospectus"), and related Letter of
Transmittal (which together with the Prospectus constitutes the "Exchange
Offer").
The Exchange Offer provides a procedure for holders to tender the Old
Capital Securities by means of guaranteed delivery.
The Exchange Offer will expire at 5:00 p.m., New York City time, on
__________, 1997, unless extended (the "Expiration Date"). Tendered Old Capital
Securities may be withdrawn at any time prior to 5:00 p.m., New York City time,
on the Expiration Date, if such Old Capital Securities have not previously been
accepted for exchange pursuant to the Exchange Offer.
Based on an interpretation by the staff of the Division of Corporation
Finance of the Securities and Exchange Commission (the "SEC") as set forth in
certain interpretive letters addressed to third parties in other transactions,
Commonwealth Edison Company, an Illinois corporation ("ComEd"), and the Trust
believe that a holder of Old Capital Securities (other than a holder who is (a)
a broker-dealer who purchased the Old Capital Securities directly from the Trust
to resell pursuant to Rule 144A under the Securities Act or any other available
exemption under the Securities Act, (b) a person participating in the
distribution of the Old Capital Securities or (c) a person who is an "affiliate"
of ComEd or the Trust) who exchanges Old Capital Securities in the Exchange
Offer for New Capital Securities and then resells such New Capital Securities
will be viewed by the staff no differently than a non-affiliated purchaser of
registered securities who purchases such securities in a registered primary
offering of securities and, after completion of such registered offering, may
resell the New Capital Securities without further compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such New Capital Securities are
<PAGE>
acquired in the ordinary course of such holder's business and that such holder
is not participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Capital Securities. See "Brown & Wood LLP," SEC No-Action Letter
(available February 7, 1997), "Shearman & Sterling," SEC No-Action Letter
(available July 2, 1993), "Morgan Stanley & Co., Inc.," SEC No-Action Letter
(available June 5, 1991) and "Exxon Capital Holding Corporation," SEC No-Action
Letter (available May 13, 1988).
The Exchange Offer is not conditioned on any minimum aggregate liquidation
amount of Old Capital Securities being tendered except that Old Capital
Securities may be tendered only in an aggregate liquidation amount of $1,000 (1
Old Capital Security) and integral multiples in excess thereof, provided that if
any Old Capital Securities are tendered for exchange in part, the untendered
aggregate liquidation amount thereof must be $100,000 (100 Old Capital
Securities) or any integral multiple of $1,000 (1 Old Capital Security) in
excess thereof.
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, ComEd and the Trust will not be required to
accept for exchange, or to exchange, any New Capital Securities for any Old
Capital Securities and may terminate the Exchange Offer (whether or not any Old
Capital Securities have been accepted for exchange) or may waive any conditions
to or amend the Exchange Offer, if any of the conditions described in the
Prospectus under "The Exchange Offer - Conditions of the Exchange Offer" have
occurred or exist or have not been satisfied.
For your information and for forwarding to your clients for whom you hold
Old Capital Securities registered in your name or in the name of your nominee,
we are enclosing the following documents:
1. A Prospectus, dated ____________, 1997.
2. A Letter of Transmittal for your use and for the information of
your clients.
3. A printed form of letter which may be sent to your clients for
whose accounts you hold Old Capital Securities registered in your name or
in the name of your nominee, with space provided for obtaining such
clients' instructions with regard to the Exchange Offer.
4. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 of the Internal Revenue Service (included in the Letter
of Transmittal after the instructions thereto).
WE URGE YOU TO CONTACT YOUR
CLIENTS AS PROMPTLY AS POSSIBLE.
Any inquiries you may have with respect to the Exchange Offer may be
addressed to, and additional copies of the enclosed materials may be obtained
from, the Exchange Agent at the following telephone number: (___) ___-____.
Very truly yours,
ComEd Financing II
-2-
<PAGE>
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
AS THE AGENT OF THE TRUST, COMED, THE EXCHANGE AGENT OR ANY OTHER PERSON, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
-3-
<PAGE>
Exhibit (99)-5
Commonwealth Edison Company and ComEd Financing II
Form S-4 File No. 333-
EXCHANGE AGENCY AGREEMENT
June __, 1997
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Re: ComEd Financing II
------------------
Ladies and Gentlemen:
Commonwealth Edison Company, an Illinois corporation as Sponsor (the
"Company"), and the ComEd Financing II, a Delaware business trust (the "Trust"),
hereby appoint Wilmington Trust Company ("Wilmington Trust") to act as exchange
agent (the "Exchange Agent") in connection with an exchange offer by the Company
and the Trust to exchange up to $150,000,000 aggregate Liquidation Amount of the
Trust's 8.50% Series B Capital Securities (the "New Capital Securities"), which
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), for a like aggregate Liquidation Amount of the Trust's
outstanding 8.50% Series A Capital Securities (the "Old Capital Securities" and
together with the New Capital Securities, the "Capital Securities"). The terms
and conditions of the exchange offer are set forth in a Prospectus, dated
________ __, 1997 (as the same may be amended or supplemented from time to time,
the "Prospectus"), and in the related Letter of Transmittal, which together
constitute the "Exchange Offer." The registered holders of the Capital
Securities are hereinafter referred to as the "Holders." Capitalized terms used
herein and not defined shall have the respective meanings described thereto in
the Prospectus.
On the basis of the representations, warranties and agreements of the
Company, the Trust and Wilmington Trust contained herein and subject to the
terms and conditions hereof, the following sets forth the agreement among the
Company, the Trust and Wilmington Trust as Exchange Agent for the Exchange
Offer:
<PAGE>
1. APPOINTMENT AND DUTIES AS EXCHANGE AGENT.
a. The Company and the Trust hereby authorize Wilmington Trust to act as
Exchange Agent in connection with the Exchange Offer and Wilmington Trust agrees
to act as Exchange Agent in connection with the Exchange Offer. As Exchange
Agent, Wilmington Trust will perform those services as are outlined herein,
including, but not limited to, accepting tenders of Old Capital Securities, and
communicating generally regarding the Exchange Offer with brokers, dealers,
commercial banks, trust companies and other persons, including Holders of the
Old Capital Securities.
b. The Company and the Trust acknowledge and agree that Wilmington Trust
has been retained pursuant to this Agreement to act solely as Exchange Agent in
connection with the Exchange Offer, and in such capacity, Wilmington Trust shall
perform such duties in good faith as are outlined herein.
c. Wilmington Trust will establish an account with respect to the Old
Capital Securities at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Exchange Offer within two (2) business days after
the date of the Prospectus, and any financial institution that is a participant
in the Book-Entry Transfer Facility's system may make book-entry delivery of the
Old Capital Securities by causing the Book-Entry Transfer Facility to transfer
such Old Capital Securities into Wilmington Trust's account in accordance with
the Book-Entry Transfer Facility's procedure for such transfer.
d. Wilmington Trust will examine each of the Letters of Transmittal and
certificates for Old Capital Securities and any other documents delivered or
mailed to Wilmington Trust by or for Holders of the Old Capital Securities, and
any book entry confirmations received by Wilmington Trust with respect to the
Old Capital Securities, to ascertain whether: (I) the Letters of Transmittal
and any such other documents are duly executed and properly completed in
accordance with the instructions set forth therein and that such book entry
confirmations are in due and proper form and contain the information required to
be set forth therein, (ii) the Old Capital Securities have otherwise been
properly tendered, (iii) Old Capital Securities are tendered in Liquidation
Amounts of $1,000 (1 Capital Security) and integral multiples in excess thereof,
and if any Old Capital Securities are tendered for exchange in part, the
untendered liquidation amount thereof is $100,000 (100 Capital Securities) or
any integral multiple of $1,000 in excess thereof, and (iv) Holders have
provided their correct Tax Identification Number or required certification.
Determination of all questions as to validity, form, eligibility and acceptance
for exchange of any Old Capital Securities shall be made by the Company and the
Trust, which determination shall be final and binding. In each case where the
Letters of Transmittal or any other documents have been improperly completed or
executed of where book-entry conformations are not in due and proper form or
omit certain information, or any of the certificates for Old Capital Securities
are not in proper form for transfer or some other irregularity in connection
with the tender or acceptance of the Old Capital Securities exists, Wilmington
Trust will endeavor, upon request of the Company or the Trust, to advise the
tendering Holders of the irregularity and to take any other action as the
Company or the Trust may request to cause such irregularity to be corrected.
Notwithstanding the above, Wilmington Trust
2
<PAGE>
shall not be under any duty to give any notification of any irregularities in
tenders or incur any liability for failure to give any such notification.
e. With the approval of the Trust and the President, any Senior Vice
President, any Executive Vice President, any Vice President or the Treasurer or
any Assistant Treasurer of the Company, (such approval, if given orally, to be
confirmed in writing) or any other party designated by any such officer,
Wilmington Trust is authorized to waive any irregularities in connection with
any tender of Old Capital Securities pursuant to the Exchange Offer.
f. Tenders of Old Capital Securities may be made only as set forth in the
Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer" and Old Capital Securities shall be considered properly tendered
only when tendered in accordance with such procedures set forth therein.
Notwithstanding the provisions of this paragraph, Old Capital Securities which
the Trust and the President, any Senior Vice President, any Executive Vice
President, any Vice President or the Treasurer, any Assistant Treasurer or any
other designated officer of the Company, shall approve (such approval, if given
orally, to be confirmed in writing) as having been properly tendered shall be
considered to be properly tendered.
g. Wilmington Trust shall advise the Company and the Trust with respect to
any Old Capital Securities received as soon as possible after 5:00 p.m., New
York City time, on the Expiration Date and accept its instructions with respect
to disposition of such Old Capital Securities.
h. Wilmington Trust shall deliver certificates for Old Capital Securities
tendered in part to the transfer agent for split-up and shall return any
untendered Old Capital Securities or Old Capital Securities which have not been
accepted by the Company and the Trust to the Holders promptly after the
expiration or termination of the Exchange Offer.
i. Upon acceptance by the Company and the Trust of any Old Capital
Securities duly tendered pursuant to the Exchange Offer (such acceptance if
given orally, to be confirmed in writing), the Company and the Trust will cause
New Capital Securities in exchange therefor to be issued as promptly as
practicable and Wilmington Trust will deliver such New Capital Securities on
behalf of the Company and the Trust at the rate of $1,000 (1 Capital Security)
Liquidation Amount of New Capital Securities for each $1,000 Liquidation Amount
of Old Capital Securities tendered as promptly as practicable after acceptance
by the Company and the Trust of the Old Capital Securities for exchange and
notice (such notice if given orally, to be confirmed in writing) of such
acceptance by the Company and the Trust. Unless otherwise instructed by the
Company or the Trust, Wilmington Trust shall issue New Capital Securities only
in denominations of $1,000 (1 Capital Security) or any integral multiple of
$1,000 in excess thereof.
j. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and the conditions set forth in the Prospectus and the
Letter of Transmittal, Old Capital Securities tendered pursuant to the Exchange
Offer may be withdrawn at any time on or prior to the Expiration Date in
accordance with the terms of the Exchange Offer.
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k. Notice of any decision by the Company and the Trust not to exchange any
Old Capital Securities tendered shall be given by the Company and the Trust
either orally (if given orally, to be confirmed in writing) or in a written
notice to Wilmington Trust.
l. If, pursuant to the Exchange Offer, the Company and the Trust do not
accept for exchange all or part of the Old Capital Securities tendered because
of an invalid tender, the occurrence of certain other events set forth in the
Prospectus under the caption "The Exchange Offer -- Conditions to the Exchange
Offer" or otherwise, Wilmington Trust shall, upon notice from the Company and
the Trust (such notice if given orally, to be confirmed in writing), promptly
after the expiration or termination of the Exchange Offer return such
certificates for unaccepted Old Capital Securities (or effect appropriate book-
entry transfer), together with any related required documents and the Letters of
Transmittal relating thereto that are in Wilmington Trust's possession, to the
persons who deposited such certificates.
m. Certificates for reissued Old Capital Securities, unaccepted Old
Capital Securities or New Capital Securities shall be forwarded by (a) first-
class certified mail, return receipt requested under a blanket surety bond
obtained by Wilmington Trust protecting Wilmington Trust, the Company and the
Trust from loss or liability arising out of the non-receipt or non-delivery of
such certificates or (b) by registered mail insured by Wilmington Trust
separately for the replacement value of each such certificate.
n. Wilmington Trust is not authorized to pay or offer to pay any
concessions, commissions or solicitation fees to any broker, dealer, commercial
bank, trust company or other nominee or to engage or use any person to solicit
tenders.
o. As Exchange Agent, Wilmington Trust:
(i) shall have no duties or obligations other than those specifically
set forth herein or in the Prospectus or in the related Letter of
Transmittal;
(ii) will make no representations and will have no responsibilities as
to the validity, value or genuineness of any of the certificates for the
Old Capital Securities deposited pursuant to the Exchange Offer, and will
not be required to and will make no representation as to the validity,
value or genuineness of the Exchange Offer;
(iii) shall not be obligated to take any legal action hereunder which
might in Wilmington Trust's reasonable judgment involve any expense or
liability, unless Wilmington Trust shall have been furnished with indemnity
satisfactory to it and additional fees for taking of such action;
(iv) may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter,
telegram or other document or security delivered to Wilmington Trust and
reasonably believed by Wilmington Trust to be genuine and to have been
signed by the proper party or parties;
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(v) may reasonably act upon any tender, statement, request, comment,
agreement or other instrument whatsoever not only as to its due execution
and validity and effectiveness of its provisions, but also as to the truth
and accuracy of any information contained therein, which Wilmington Trust
believes in good faith to be genuine and to have been signed or represented
by a proper person or persons acting in a fiduciary or representative
capacity;
(vi) may rely on and shall be protected in acting upon written or oral
instructions from the President, any Senior Vice President, any Executive
Vice President, any Vice President, the Treasurer, any Assistant Treasurer
or any other designed officer of the Company;
(vii) may consult with its own counsel with respect to any questions
relating to Wilmington Trust's duties and responsibilities and the advice
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by Wilmington
Trust hereunder in good faith and in accordance with the advice of such
counsel; and
(viii) shall not advise any person tendering Old Capital Securities
pursuant to the Exchange Offer as to whether to tender or refrain from
tendering all or any portion of its Old Capital Securities or as to the
market value, decline or appreciation in market value of any Old Capital
Securities that may or may not occur as a result of the Exchange Offer or
as to the market value of the New Capital Securities. Wilmington Trust
shall furnish copies of the Prospectus, Letter of Transmittal and the
Notice of Guaranteed Delivery or such other forms as may be approved from
time to time by the Company and the Trust, to all persons requesting such
documents from Wilmington Trust. The Company and the Trust will furnish
you with copies of such documents at your request.
p. Wilmington Trust shall advise orally and promptly thereafter confirm
in writing to the Company and the Trust and such other person or persons as the
Company and the Trust may request, daily (and more frequently during the week
immediately preceding the Expiration Date and if otherwise reasonably requested)
up to and including the Expiration Date, the aggregate principal amount of Old
Capital Securities which have been tendered pursuant to the terms of the
Exchange Offer and the items received by Wilmington Trust pursuant to the
Exchange Offer and this Agreement. In addition, Wilmington Trust will also
provide, and cooperate in making available to the Company and the Trust, or any
such other person or persons upon request (such request if made orally, to be
confirmed in writing) made from time to time, such other information in its
possession as the Company and the Trust may reasonably request. Such
cooperation shall include, without limitation, the granting by Wilmington Trust
to the Company and the Trust, and such person or persons as the Company and the
Trust may request, access to those persons on Wilmington Trust's staff who are
responsible for receiving tenders, in order to ensure that immediately prior to
the Expiration Date the Company and the Trust shall have received adequate
information in sufficient detail to enable the Company and the Trust to decide
whether to extend the Exchange Offer. Wilmington Trust shall prepare a final
list of all persons whose tenders were accepted, the aggregate
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principal amount of Old Capital Securities tendered, the aggregate principal
amount of Old Capital Securities accepted and deliver said list to the Company
and the Trust.
q. Letters of Transmittal, book-entry confirmations and Notices of
Guaranteed Delivery shall be stamped by Wilmington Trust as to the date and the
time of receipt thereof and shall be preserved by Wilmington Trust as to the
date and the time of receipt thereof and shall be preserved by Wilmington Trust
for a period of time at least equal to the period of time Wilmington Trust
preserves other records pertaining to the transfer of securities, or one year,
whichever is longer, and thereafter shall be delivered by Wilmington Trust to
the Company and the Trust. Wilmington Trust shall dispose of unused Letters of
Transmittal and other surplus materials by returning them to the Company or the
Trust.
2. COMPENSATION.
$______ will be payable to Wilmington Trust in its capacity as Exchange
Agent; provided, that Wilmington Trust reserves the right to receive
reimbursement from the Company for any reasonable out-of-pocket expenses
incurred as Exchange Agent in performing the services described herein.
3. INDEMNIFICATION.
a. The Company and the Trust hereby agree to protect, defend, indemnify
and hold harmless Wilmington Trust against and from any and all costs, losses,
liabilities, taxes, expenses (including reasonable counsel fees and
disbursements) and claims imposed upon or asserted against Wilmington Trust on
account of any action taken or omitted to be taken by Wilmington Trust in
connection with its acceptance of or performance of its duties under this
Agreement and the documents related thereto as well as the reasonable costs and
expenses of defending itself against any claim or liability arising out of or
relating to this Agreement and the documents related thereto. This
indemnification shall survive the release, discharge, termination and/or
satisfaction of this Agreement. Anything in this Agreement to the contrary
notwithstanding, neither the Company nor the Trust shall be liable for
indemnification or otherwise for any loss, liability, cost or expense to the
extent arising out of Wilmington Trust's bad faith, gross negligence or willful
misconduct. In no case shall the Company or the Trust be liable under this
indemnification agreement with respect to any claim against Wilmington Trust
until the Company and the Trust shall be notified by Wilmington Trust, by
letter, of the written assertion of a claim against Wilmington Trust or of any
other action commenced against Wilmington Trust, promptly after Wilmington Trust
shall have received any such written assertion or shall have been served with a
summons in connection therewith; provided, that, Wilmington Trust's failure to
give such notice shall not excuse the Company or the Trust from its obligations
hereunder. The Company and the Trust shall be entitled to participate at their
own expense in the defense of any such claim or other action, and, if the
Company and the Trust so elect, the Company or the Trust may assume the defense
of any pending or threatened action against Wilmington Trust in respect of
which indemnification may be sought hereunder with counsel reasonably acceptable
to Wilmington Trust; provided that the Company and the Trust shall not be
entitled to assume the defense of any such action if the named parties to such
action include the Company or the Trust and Wilmington Trust and representation
of the parties by
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the same legal counsel would, in the reasonable opinion of counsel for
Wilmington Trust, be inappropriate due to actual or potential conflicting
interests between them. In the event that the Company or the Trust shall assume
the defense of any such suit with counsel reasonably acceptable to Wilmington
Trust, the Company or the Trust, as applicable, shall not be liable for the fees
and expenses incurred by Wilmington Trust of any counsel retained by Wilmington
Trust subsequent to such assumption of defense by the Company or the Trust.
Without the prior written consent of the Company and the Trust, Wilmington Trust
will not settle, compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding in respect of which
indemnification could be sought in accordance with the indemnification
provisions of this Agreement (whether or not Wilmington Trust, the Company or
the Trust or any of their directors, officers and controlling persons is an
actual or potential party to such claim, action or proceeding), unless such
settlement or consent includes an unconditional release of the Company and the
Trust and their directors, officers and controlling persons from all liability
arising out of such claim, action or proceeding.
b. The Company agrees to indemnify and hold harmless the Trust from and
against any and all losses, claims, damages and liabilities whatsoever, as due
from the Trust under this Section.
4. TAX INFORMATION.
Wilmington Trust shall arrange to comply with all requirements under the
tax laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service. Wilmington Trust understands that it may be required, in
certain instances, to deduct __% with respect to interest paid on the New
Capital Securities and proceeds from the sale, exchange, redemption or
retirement of the New Capital Securities from Holders who have not supplied
their correct Taxpayer Identification Number or required certification. Such
funds will be turned over to the Internal Revenue Service.
5. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).
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6. NOTICES. Any communication or notice provided for hereunder shall be in
writing and shall be given (and shall be deemed to have been given upon receipt)
by delivery in person, telecopy, or overnight delivery or by registered or
certified mail (postage prepaid, return receipt requested) to the applicable
party at the addresses indicated below:
If to the Company:
Commonwealth Edison Company
10 South Dearborn Street
37th Floor
Chicago, Illinois 60603
If to the Trust:
ComEd Financing II
c/o Commonwealth Edison Company
10 South Dearborn Street
37th Floor
Chicago, Illinois 60603
If to Wilmington Trust:
Wilmington Trust Company
1105 North Market Street, First Floor
Wilmington, Delaware 19890-0001
Telecopier No.: (302) 651-8882
Attention: Corporate Trust Administration
With a copy to:
Richards, Layton & Finger, P.A.
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
Telecopier No.: (302) 658-6548
Attention: Jennifer L. Janss, Esquire
or, as to each party, at such other address as shall be designated by such party
in a written notice complying as to delivery with the terms of this Section.
7. PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement. Without limitation to the foregoing, the parties hereto expressly
agree
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that no holder of Capital Securities shall have any right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.
8. COUNTERPARTS; SEVERABILITY. This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which when so executed shall be deemed an original, and all of such counterparts
shall together constitute one and the same agreement. If any term or other
provision of this Agreement or the application thereof is invalid, illegal or
incapable of being enforced by any rule of law, or public policy, all other
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the agreements contained herein is
not affected in any manner adverse to any party. Upon such determination that
any term or provision or the application thereof is invalid, illegal or
unenforceable, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the agreements contained
herein may be performed as originally contemplated to the fullest extent
possible.
9. CAPTIONS. The descriptive headings contained in this Agreement are
included for convenience or reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
10. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
This Agreement may not be amended or modified nor may any provision hereof be
waived except in writing signed by each party to be bound thereby.
11. TERMINATION. This Agreement shall terminate upon the earlier of (a) the
90th day following the expiration, withdrawal, or termination of the Exchange
Offer, (b) the close of business on the date of actual receipt of written notice
by Wilmington Trust from the Company and the Trust stating that this Agreement
is terminated, (c) one year following the date of this Agreement, or (d) the
time and date on which this Agreement shall be terminated by mutual consent of
the parties hereto.
Kindly indicate your willingness to act as Exchange Agent and Wilmington
Trust's acceptance of the foregoing provisions by signing in the space provided
below for that purpose and returning to the Company a copy of this Agreement so
signed, whereupon this Agreement and Wilmington Trust's acceptance shall
constitute a binding agreement among Wilmington Trust, the Company and the
Trust.
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Very truly yours,
COMMONWEALTH EDISON COMPANY
By: _______________________________
Name:
Title:
COMED FINANCING II
By: _______________________________
Name:
Title:
Accepted and agreed to as of the
date first written above:
WILMINGTON TRUST COMPANY
By: _______________________________
Name:
Title:
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