As filed with the Securities and Exchange Commission on September 20, 1996.
Registration Nos. 333-07281 and 333-07281-001
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
DELMARVA POWER & LIGHT COMPANY
(Exact name of Registrant as specified in its charter)
DELAWARE AND VIRGINIA 51-0084283
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
DELMARVA POWER FINANCING I
(Exact name of Registrant as specified in its charter)
---------------
DELAWARE TO BE APPLIED FOR
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
800 KING STREET
P.O. BOX 231
WILMINGTON, DELAWARE 19899
(302) 429-3011
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
BARBARA S. GRAHAM
SENIOR VICE PRESIDENT, TREASURER AND CHIEF FINANCIAL OFFICER
800 KING STREET
P.O. BOX 231
WILMINGTON, DELAWARE 19899
(302) 429-3448
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
---------------
It respectfully is requested that the Commission
send copies of all notices, orders and communications to:
ROBERT G. SCHUUR, ESQ.
REID & PRIEST LLP
40 WEST 57TH STREET
NEW YORK, NEW YORK 10019
=========================================================================
<PAGE>
PROSPECTUS (Subject to Completion, Issued , 1996)
2,800,000 Preferred Securities
Delmarva Power Financing I
____% CUMULATIVE TRUST PREFERRED CAPITAL SECURITIES
(Liquidation amount $25.00 per Preferred Security)
Guaranteed to the extent Delmarva Power Financing I has funds
as set forth herein by
Delmarva Power & Light Company
---------------
The ____% Cumulative Trust Preferred Capital Securities (the "Preferred
Securities") offered hereby are being issued by and represent undivided
preferred beneficial interests in the assets of Delmarva Power Financing I
("Delmarva Financing"), a statutory business trust created under the laws
of the State of Delaware. Delmarva Power & Light Company (the "Company"),
a Delaware and Virginia corporation, will be the owner of the undivided
common beneficial interests in the assets represented by common securities
of Delmarva Financing (the "Common Securities," together with the Preferred
Securities herein referred to as the "Trust Securities"). Wilmington Trust
Company is the Property Trustee (the "Property Trustee") of Delmarva
Financing. Delmarva Financing exists for the sole purpose of issuing the
Trust Securities and investing the proceeds thereof in ____% Junior
Subordinated Debentures, Series I, Due 2036, to be issued by the Company
(the "Subordinated Debentures") in an aggregate principal amount equal
to the aggregate liquidation amount of the Trust Securities. The
Preferred Securities will have a preference under certain circumstances
with respect to cash distributions and amounts payable on liquidation,
redemption or otherwise over the Common Securities. See "Description of
the Preferred Securities -- Subordination of Common Securities."
(continued on following page)
---------------
SEE "RISK FACTORS," BEGINNING ON PAGE 6, FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE PERIOD
AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENT OF DISTRIBUTIONS ON THE
PREFERRED SECURITIES MAY BE DEFERRED AND CERTAIN RELATED UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES.
---------------
Application has been made to list the Preferred Securities on the
New York Stock Exchange. Trading of the Preferred Securities on the
New York Stock Exchange is expected to commence within a thirty-day
period after the date of this Prospectus. See "Underwriting."
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR BY 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.
---------------
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND DELMARVA
PUBLIC(1) COMMISSIONS(2) FINANCING(3)(4)
--------- -------------- ---------------
Per Preferred Security . . $25.00 (3) $25.00
Total . . . . . . . . . . . $70,000,000 (3) $70,000,000
---------------
(1) Plus accrued distributions, if any, from _________, 1996.
(2) Delmarva Financing and the Company have agreed to indemnify the
several Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the "1933
Act"). See "Underwriting."
(3) In view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Subordinated Debentures, the
Company has agreed, in the Underwriting Agreement, to pay to the
Underwriters, as compensation for their services, $_____ per Preferred
Security (or $___________ in the aggregate); provided that such
compensation will be $_____ per Preferred Security sold to certain
institutions. See "Underwriting."
(4) Expenses of the offering, which are payable by the Company, are
estimated to be $210,000.
---------------
The Preferred Securities are offered, subject to prior sale, when, as
and if accepted by the Underwriters and subject to approval of certain
legal matters by Reid & Priest LLP, counsel for the Underwriters. It is
expected that delivery of the Preferred Securities will be made on or about
__________, 1996 through the book-entry facilities of The Depository Trust
Company against payment therefor in immediately available funds.
---------------
MORGAN STANLEY & CO. MERRILL LYNCH & CO.
Incorporated
SMITH BARNEY INC.
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
____________, 1996
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 JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH JURISDICTION.
<PAGE>
(cover continued)
Holders of the Preferred Securities will be entitled to receive
preferential cumulative cash distributions accruing from the date of
original issuance and payable quarterly in arrears on the last day of
March, June, September and December of each year, commencing December 31,
1996, at the per annum rate of ____% of the liquidation amount of $25 per
Preferred Security (together, at any given time, with any accrued but
unpaid amounts and interest thereon, if any, "Distributions"). Interest on
the Subordinated Debentures is the sole source of income for Delmarva
Financing from which payment of Distributions on the Preferred Securities
can be made. The Company has the right to defer payments of interest on
the Subordinated Debentures by extending the interest payment period
thereon at any time or from time to time for up to 20 consecutive quarters
with respect to each deferral period (each, an "Extension Period");
provided that no such Extension Period may extend beyond the maturity of
the Subordinated Debentures. Prior to the end of an Extension Period the
Company may, and at the end of such Extension Period the Company shall, pay
all interest then accrued and unpaid (together with interest thereon at the
stated rate borne thereby, compounded quarterly to the extent permitted by
applicable law). Upon the termination of any Extension Period and the
payment of all amounts then due, including interest on deferred interest
payments, the Company may elect a new Extension Period, subject to the
above requirements. See "Description of the Subordinated Debentures --
Option to Extend Interest Payment Period."
If interest payments on the Subordinated Debentures are deferred,
Distributions on the Preferred Securities also will be deferred and the
Company will not be permitted, subject to certain exceptions set forth
herein, to (i) declare or pay dividends or distributions on (other than
dividends or distributions paid in shares of Common Stock of the Company)
or redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock, or (ii) make any payment of principal of,
interest or premium, if any, on, or repay, repurchase or redeem any
indebtedness that is pari passu with the Subordinated Debentures (including
other Debt Securities, as defined under "Description of Subordinated
Debentures -- General") or make any guarantee payment with respect to such
indebtedness. During an Extension Period, Distributions on the Preferred
Securities will continue to accrue and Distributions that are in arrears
will bear interest on the amount thereof at the per annum rate of ____% (to
the extent permitted by applicable law, compounded quarterly), and Holders
of Preferred Securities will be required to accrue interest income for
United States federal income tax purposes in advance of receipt of cash
related to such interest income. See "Description of the Preferred
Securities -- Distributions" and "Certain United States Federal Income Tax
Consequences -- Potential Extension of Interest Payment Period and Original
Issue Discount."
The payment of Distributions and payments on the liquidation of Delmarva
Financing or the redemption of the Preferred Securities are guaranteed by
the Company to the extent that Delmarva Financing has sufficient funds
available to make such payments (the "Guarantee"). See "Description of
the Guarantee." If the Company fails to make interest payments on the
Subordinated Debentures held by Delmarva Financing, Delmarva Financing will
have insufficient funds to pay Distributions on the Preferred Securities.
In such event, a Holder of Preferred Securities may institute a legal
proceeding directly against the Company to enforce payment to such Holder
of the principal of or interest on Subordinated Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder. The Company's obligations under the Guarantee
and the Subordinated Debentures are unsecured and rank subordinate and
junior in right of payment to Senior Indebtedness (as defined under
"Description of the Subordinated Debentures -- Subordination") of the
Company. The Company has agreed in an Agreement as to Expenses and
Liabilities (the "Expense Agreement") to provide funds to pay obligations
of Delmarva Financing to parties other than Holders of Trust Securities.
The Subordinated Debentures and the Guarantee, together with the
obligations of the Company with respect to the Preferred Securities under
the Indenture (as defined under "Summary Information -- General"), the
Trust Agreement (as defined under "Delmarva Financing") and the Expense
Agreement, constitute a full and unconditional guarantee of the Preferred
Securities by the Company.
The Trust Securities are subject to mandatory redemption upon repayment
of the Subordinated Debentures at maturity or upon their earlier
redemption. Any redemption of Trust Securities by Delmarva Financing will
be in amounts having an aggregate liquidation amount equal to the aggregate
principal of Subordinated Debentures to be redeemed and will be at a
redemption price equal to 100% of such liquidation amount, plus accrued and
unpaid Distributions, if any, to the redemption date (the "Redemption
Price"). See "Description of the Preferred Securities -- Redemption." The
Company will have the option at any time on or after _______________, 2001,
to redeem the Subordinated Debentures, in whole or in part. The Company
also will have the option, upon the occurrence and during the continuation
of a Special Event (as defined under "Description of the Preferred
Securities -- Special Event Redemption or Distribution"), (i) to redeem the
Subordinated Debentures, in whole but not in part, which will result in the
redemption of all of the Trust Securities by Delmarva Financing or (ii) to
cause the termination of Delmarva Financing and, in connection therewith,
after satisfaction of all amounts due to creditors of Delmarva Financing,
if any, to cause the distribution of Subordinated Debentures to the Holders
of the Trust Securities. If the Subordinated Debentures are distributed to
the Holders of the Trust Securities, the Company will use its best efforts
to have the Subordinated Debentures listed on the New York Stock Exchange
("NYSE") or on such other exchange as the Preferred Securities then are
listed. See "Description of the Preferred Securities -- Special Event
Redemption or Distribution."
The Subordinated Debentures are unsecured and rank subordinate and
junior in right of payment to all Senior Indebtedness of the Company. The
terms of the Subordinated Debentures place no limitation on the amount of
Senior Indebtedness that may be incurred by the Company. As of June 30,
1996, the Company had approximately $1.0 billion of principal amount of
indebtedness for borrowed money and capital lease obligations constituting
Senior Indebtedness. See "Description of the Subordinated Debentures --
Subordination."
In the event of the liquidation of Delmarva Financing, the Holders of
the Trust Securities will be entitled to receive either (i) Subordinated
Debentures in an aggregate principal amount of $25 per Trust Security or
(ii) a liquidation amount of $25 per Trust Security, plus accrued and
unpaid Distributions thereon to the date of payment, subject to certain
limitations. See Description of the "Preferred Securities -- Liquidation
Distribution upon Termination."
The Preferred Securities will be represented by a global certificate
registered in the name of The Depository Trust Company ("DTC") or its
nominee. Beneficial interests in the Preferred Securities will be shown
on, and transfers thereof will be effected only through, records maintained
by participants in DTC. Except as described herein, Preferred Securities
in certificated form will not be issued in exchange for the global
certificate. See "Description of the Preferred Securities -- Book-Entry
Only Issuance -- The Depository Trust Company."
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON 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
OFFERING MADE BY THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
DELMARVA FINANCING, THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER OR A SOLICITATION BY ANY PERSON IN ANY JURISDICTION
IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN OFFER OR
SOLICITATION. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY
THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE OF THE PROSPECTUS.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
PREFERRED SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON
THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
---------------
TABLE OF CONTENTS
PAGE
----
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . . . 2
SUMMARY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 3
CERTAIN CONSOLIDATED FINANCIAL INFORMATION OF
DELMARVA POWER & LIGHT COMPANY . . . . . . . . . . . . . . . . . . . 5
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
DELMARVA FINANCING . . . . . . . . . . . . . . . . . . . . . . . . . . 9
RECENT DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 9
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
DESCRIPTION OF THE PREFERRED SECURITIES . . . . . . . . . . . . . . . . 10
DESCRIPTION OF THE GUARANTEE . . . . . . . . . . . . . . . . . . . . . 18
DESCRIPTION OF THE SUBORDINATED DEBENTURES . . . . . . . . . . . . . . 20
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES . . . . . . . . . 27
VALIDITY OF THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . 30
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may 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
following Regional Offices of the Commission: New York Regional Office, 7
World Trade Center, 13th Floor, New York, New York 10048; and Chicago
Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may also be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. Certain securities of the
Company are listed on the NYSE and the Philadelphia Stock Exchange, and
reports and other information concerning the Company may be inspected and
copied at the offices of both Exchanges.
No separate financial statements of Delmarva Financing are included
herein. The Company considers that such financial statements would not be
material to Holders of the Preferred Securities because the Company is a
reporting company under the 1934 Act and Delmarva Financing has no
independent operations, but exists for the sole purpose of issuing the
Trust Securities and holding as trust assets the Subordinated Debentures.
Delmarva Financing intends not to file separate reports under the 1934
Act but must apply for and be granted relief by the Commission to avoid the
requirement to file such reports.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed by the Company with the Commission
pursuant to the 1934 Act, are hereby incorporated by reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1995;
2. The Company's Quarterly Report on Form 10-Q for the quarters ended
March 31, and June 30, 1996;
3. The Company's Current Reports on Form 8-K dated February 22, 1996,
May 26, and August 9 (filed on August 14), 1996.
Each document filed subsequent to the date of this Prospectus pursuant
to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act prior to the
termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference in this Prospectus and shall be a part hereof
from the date of filing of such document. The documents that are
incorporated or deemed to be incorporated by reference in this Prospectus
are referred to sometimes hereinafter as the "Incorporated Documents."
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus is
delivered, upon the written or oral request of any such person, a copy of
any document referred to above which has been or may be incorporated in
this Prospectus by reference, other than exhibits to such documents (unless
such exhibits are specifically incorporated by reference into such
documents). Requests for such copies should be directed to: Mr. Donald P.
Connelly, Secretary, Delmarva Power & Light Company, 800 King Street, P.O.
Box 231, Wilmington, Delaware 19899, telephone number (302) 429-3011.
<PAGE>
SUMMARY INFORMATION
The following is a summary of certain information contained herein and
should be read in conjunction with such information contained elsewhere in
this Prospectus and is subject to and qualified by reference to such
information. Capitalized terms used herein have the respective meanings
ascribed to them elsewhere in this Prospectus.
GENERAL
The Preferred Securities represent undivided preferred beneficial
interests in the assets of Delmarva Financing and will have a preference
under certain circumstances with respect to Distributions and amounts
payable on liquidation, redemption or otherwise over the Common Securities.
The sole assets of Delmarva Financing will be the Subordinated Debentures.
The Subordinated Debentures are unsecured subordinated debt securities
issued under an Indenture (the "Indenture") between the Company and
Wilmington Trust Company, as trustee (the "Debenture Trustee").
DISTRIBUTIONS
Holders of the Preferred Securities will be entitled to receive
cumulative cash Distributions accruing from the date of original issuance
and payable quarterly in arrears on the last day of March, June, September
and December of each year, commencing December 31, 1996, at the per annum
rate set forth on the cover page of this prospectus to the persons in whose
names the Preferred Securities are registered at the close of business on
the relevant record dates.
Delmarva Financing will hold Subordinated Debentures in an aggregate
principal amount equal to the liquidation amount of the Trust Securities.
Delmarva Financing will use interest payments on the Subordinated
Debentures to make Distributions on the Preferred Securities. The
Subordinated Debentures are unsecured and rank subordinate and junior in
right of payment to all Senior Indebtedness of the Company.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company has the right to defer payments of interest on the
Subordinated Debentures by extending the interest payment period thereon
for Extension Periods of up to 20 consecutive quarters with respect to each
deferral period; provided, however, that no Extension Period may extend
beyond the maturity of the Subordinated Debentures. If interest payments
on the Subordinated Debentures are deferred, Distributions on the Preferred
Securities also will be deferred and the Company will not be permitted,
subject to certain exceptions set forth herein, to (i) declare or pay
dividends or distributions on (other than dividends or distributions paid
in shares of Common Stock of the Company) or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital stock, or
(ii) make any payment of principal of, interest or premium, if any, on, or
repay, repurchase or redeem any indebtedness that is pari passu with the
Subordinated Debentures (including other Debt Securities, as defined
herein) or make any guarantee payment with respect to such indebtedness.
During an Extension Period, Distributions on the Preferred Securities will
continue to accrue and Distributions that are in arrears will bear interest
on the amount thereof at the per annum rate set forth on the cover page of
this Prospectus (to the extent permitted by applicable law, compounded
quarterly), and Holders of Preferred Securities will be required to accrue
interest income for United States federal income tax purposes in advance of
receipt of cash related to such interest income. Upon the termination of
any Extension Period and the payment of all amounts then due, the Company
may elect another Extension Period.
REDEMPTION
The Preferred Securities are subject to mandatory redemption upon
repayment of the Subordinated Debentures at maturity or upon their earlier
redemption. The Subordinated Debentures are redeemable, at the option of
the Company, in whole or in part, on or after ________________, 2001, or,
in whole but not in part, upon the occurrence of a Special Event and in
certain other circumstances. See "Description of the Preferred Securities
-- Redemption and -- Special Event Redemption or Distribution" and
"Description of the Subordinated Debentures -- Optional Redemption."
No sinking fund will be established for the benefit of the Preferred
Securities.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence and during the continuation of a Special Event, the
Company has the option to (i) redeem the Subordinated Debentures, in whole
but not in part, and therefore cause a mandatory redemption of all of the
Trust Securities at the Redemption Price within 90 days following the
occurrence of such Special Event or (ii) cause the termination of Delmarva
Financing, subject, in the case of a Tax Event (as defined under
"Description of the Preferred Securities -- Special Event Redemption or
Distribution"), to receipt of a No Recognition Opinion (as defined under
"Description of the Preferred Securities -- Special Event Redemption or
Distribution") and in connection therewith, after the satisfaction of all
amounts due to creditors of Delmarva Financing, if any, cause the
Subordinated Debentures to be distributed to the Holders of the Trust
Securities on a pro rata basis. If the Subordinated Debentures are
distributed to the Holders of the Preferred Securities, the Company will
use its best efforts to have the Subordinated Debentures listed on the NYSE
or on such other exchange as the Preferred Securities are then listed. See
"Description of the Preferred Securities -- Special Event Redemption or
Distribution."
THE GUARANTEE
The payment of Distributions and payments on the liquidation of Delmarva
Financing or the redemption of Preferred Securities are guaranteed by the
Company to the extent that Delmarva Financing has sufficient funds
available therefor. See "Description of the Guarantee."
LISTING
Application has been made to list the Preferred Securities on the NYSE.
Trading of the Preferred Securities on the NYSE is expected to commence
within a 30-day period after the date of this Prospectus.
USE OF PROCEEDS
The proceeds to be received by Delmarva Financing from the sale of the
Preferred Securities will be used to purchase Subordinated Debentures of
the Company. The Company expects to use the proceeds of such purchase to
redeem its 7.52% Preferred Stock ($100 par value) and to purchase other
outstanding securities of the Company, including shares of preferred stock
tendered in connection with the Company's Offer to Purchase commenced
August 22, 1996, and for other general corporate purposes. To the extent
the proceeds are not immediately so used, they may be invested temporarily
in short-term interest-bearing obligations. See "Use of Proceeds."
<PAGE>
CERTAIN CONSOLIDATED FINANCIAL INFORMATION OF
DELMARVA POWER & LIGHT COMPANY
(THOUSANDS, EXCEPT PER SHARE AMOUNTS, RATIOS AND PERCENTAGES)
TWELVE MONTHS
ENDED JUNE 30,
--------
1996
----
(UNAUDITED)
Income Summary:
Operating Revenues . . . . . . $1,067,498
Net Income . . . . . . . . . . 120,106
Earnings Applicable to
Common Stock . . . . . . . . 110,302
Earnings per share of
Common Stock . . . . . . . . $1.82
Ratio of Earnings to
Fixed Charges(5) . . . . . . 3.47
Ratio of Earnings to
Fixed Charges and
Preferred Dividends(5) . . . 2.89
YEAR ENDED DECEMBER 31,(1)
--------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Income Summary:
Operating Revenues . $995,103 $991,021 $970,607 $864,044 $855,821
Net Income . . . . . 117,488 108,310(2) 111,076 98,526(3) 93,236
Earnings Applicable
to Common Stock . 107,546 98,940(2) 101,074 90,177(3) 85,259
Earnings per share
of Common Stock . $1.79 $1.67(2) $1.76 $1.69(3) $1.69(4)
Ratio of Earnings to
Fixed Charges(5) . 3.54 3.49 3.47 3.03 2.58
Ratio of Earnings to
Fixed Charges and
Preferred
Dividends(5) . . . 2.92 2.85 2.88 2.51 2.24
JUNE 30, 1996
-------------
(UNAUDITED)
ACTUAL AS ADJUSTED(6)
------- --------------
OUTSTANDING RATIO OUTSTANDING RATIO
----------- ----- ----------- -----
Capitalization Summary:
Common Stockholders'
Equity . . . . . . . . . . $928,642 45.6% $928,642 45.6%
Preferred Stock -
Not Subject to
Mandatory Redemption . . 168,085 8.3% 98,085 4.8%
Company Obligated
Mandatorily Redeemable
Preferred Securities
of Subsidiary Trust(7) . -- 0.0% 70,000 3.5%
939,769 46.1% 939,769 46.1%
Long-Term Debt(8) . . . . . ---------- ------ ---------- ------
$2,036,496 100.0% $2,036,496 100.0%
Total Capitalization . . . . . ========== ====== ========== ======
____________________________________________
(1) Derived from audited financial information.
(2) An early retirement offer decreased earnings net of income taxes and
earnings per share by $10.7 million and $0.18, respectively.
(3) The settlement of a lawsuit with PECO Energy Company increased
earnings net of income taxes and earnings per share by $11.4 million
and $0.21, respectively.
(4) Includes $0.25 for the cumulative effect of a change in accounting for
unbilled revenues.
(5) For purposes of computing these ratios, earnings have been computed by
adding income taxes and fixed charges to net income. Fixed charges
include gross interest expense and the estimated interest component of
rentals. For the ratio of earnings to fixed charges and preferred
dividends, preferred dividends represent annualized preferred dividend
requirements multiplied by the ratio that pre-tax income bears to net
income. For 1994, the exclusion of an early retirement offer charge
results in an adjusted ratio of earnings to fixed charges of 3.74 and
an adjusted ratio of earnings to fixed charges and preferred dividends
of 3.05. For 1992, the exclusion of the gain from a settlement
reached in a lawsuit with PECO Energy Company results in an adjusted
ratio of earnings to fixed charges of 2.78 and an adjusted ratio of
earnings to fixed charges and preferred dividends of 2.30. For 1991,
net income and income taxes related to the cumulative effect of a
change in accounting for unbilled revenues are excluded in the
computation of these ratios.
(6) Assumes that the net proceeds to the Company from the sale of
Preferred Securities offered hereby will be used to redeem preferred
stock of the Company.
(7) As described in this Prospectus, all of the assets of Delmarva
Financing will be approximately $72 million of Subordinated
Debentures.
(8) Excludes $1,507,000 of long-term debt due within one year, and
includes $86,500,000 of variable rate demand bonds, which the Company
intends to use as a source of long-term financing.
<PAGE>
RISK FACTORS
Prospective purchasers of Preferred Securities should review carefully
the information contained elsewhere herein and should particularly consider
the following risk factors with respect to the Preferred Securities:
SUBORDINATION OF THE GUARANTEE AND THE SUBORDINATED DEBENTURES
The Company's obligations under the Guarantee and the Subordinated
Debentures are unsecured and rank subordinate and junior in right of
payment to Senior Indebtedness of the Company, except any liabilities that
may be made pari passu expressly by their terms. See "Description of the
Guarantee -- Status of the Guarantee" and "Description of the Subordinated
Debentures -- Subordination." As of June 30, 1996, Senior Indebtedness of
the Company aggregated approximately $1.0 billion. There are no terms of
the Preferred Securities, the Guarantee or the Subordinated Debentures that
limit the Company's ability to incur additional indebtedness, including
indebtedness that would rank senior to the Guarantee and the Subordinated
Debentures.
The ability of Delmarva Financing to pay amounts due on the Preferred
Securities is solely dependent upon the Company making payments on the
Subordinated Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
The Company has the right to defer payments of interest on the
Subordinated Debentures by extending the interest payment period thereon
for Extension Periods of up to 20 consecutive quarters with respect to each
deferral period; provided that no Extension Period may extend beyond the
maturity of the Subordinated Debentures. Prior to the end of an Extension
Period, the Company may, and at the end of such Extension Period the
Company shall, pay all interest then accrued and unpaid (together with
interest thereon at the stated rate borne thereby, compounded quarterly
to the extent permitted by applicable law). Upon the termination of any
Extension Period and the payment of all amounts then due, including
interest on deferred interest payments, the Company may select a new
Extension Period, subject to the above requirements. If interest payments
on the Subordinated Debentures are deferred, Distributions on the Preferred
Securities also will be deferred and the Company will not be permitted,
subject to certain exceptions set forth herein, to (i) declare or pay
dividends or distributions on (other than dividends or distributions paid
in shares of Common Stock of the Company) or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital stock, or
(ii) make any payment of principal of, interest or premium, if any, on, or
repay, repurchase or redeem any indebtedness that is pari passu with the
Subordinated Debentures (including other Debt Securities) or make any
guarantee payment with respect to such indebtedness. During an Extension
Period, Distributions on the Preferred Securities will continue to accrue
and Distributions that are in arrears will bear interest on the amount
thereof at the per annum rate set forth on the cover page of this
Prospectus (to the extent permitted by applicable law, compounded
quarterly). See "Description of the Preferred Securities -- Distributions"
and "Description of the Subordinated Debentures -- Option to Extend
Interest Payment Period."
Because the Company has the right to extend the interest payment
period on the Subordinated Debentures, the Subordinated Debentures will be
treated as having been issued with original issue discount ("OID") for
United States federal income tax purposes. As a result, Holders of
Preferred Securities will be required to include in their gross income
Distributions as they accrue, rather than when they are paid, regardless of
the Holder's regular method of accounting. OID on the Preferred Securities
will be treated as interest and generally will be equal to the
Distributions on the Preferred Securities each year. Should an Extension
Period occur, a Holder of Preferred Securities will continue to accrue
interest (in the form of OID) in income in respect of its pro rata share of
the Subordinated Debentures held by Delmarva Financing for United States
federal income tax purposes. As a result, a Holder of Preferred Securities
will include such interest in gross income for United States federal income
tax purposes in advance of the receipt of cash, and will not receive the
cash related to such income from Delmarva Financing if the Holder disposes
of the Preferred Securities prior to the record date for the payment of
Distributions. See "Certain United States Federal Income Tax
Considerations -- Potential Extension of Interest Payment Period and
Original Issue Discount."
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 elect to exercise
such right in the future, the market price of the Preferred Securities is
likely to be adversely affected. A Holder that disposes of its Preferred
Securities during an Extension Period, therefore, might not receive the
same return on its investment as a Holder that continues to hold its
Preferred Securities. In addition, as a result of the existence of the
Company's right to defer interest payments, the market price of the
Preferred Securities (which represent a preferred undivided beneficial
interest in the Subordinated Debentures) may be more volatile than other
securities on which OID accrues that do not have such rights.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION; ADVERSE EFFECT OF POSSIBLE TAX
LAW CHANGES
Upon the occurrence and during the continuation of a Special Event,
the Company has the option to (i) redeem the Subordinated Debentures, in
whole but not in part, and therefore cause a mandatory redemption of all of
the Trust Securities at the Redemption Price within 90 days following the
occurrence of such Special Event or (ii) cause the termination of Delmarva
Financing and, in connection therewith, after satisfaction of all amounts
due to creditors of Delmarva Financing, if any, cause Subordinated
Debentures to be distributed to the Holders of Trust Securities within 90
days following the occurrence of such Special Event.
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the
"Revenue Bill"), the revenue portion of President Clinton's budget
proposal, was released. The Revenue Bill, among other things, generally
would treat as equity an instrument, issued by a corporation, that has a
maximum term of more than 20 years and that is not shown as indebtedness on
the separate balance sheet of the issuer or, where the instrument is issued
to a related party (other than a corporation), where the holder or some
other related party issues a related instrument that is not shown as
indebtedness on the issuer's consolidated balance sheet. The above-
described provision was proposed to be effective generally for instruments
issued on or after December 7, 1995. If the provision were to apply to the
Subordinated Debentures, the Company would be unable to deduct interest on
the Subordinated Debentures. However, on March 29, 1996, the Chairmen of
the Senate Finance and House Ways and Means Committees issued a joint
statement to the effect that it was their intention that the effective date
of the President's legislative proposals, if adopted, will be no earlier
than the date of appropriate Congressional action. There can be no
assurance, however, that current or future legislative proposals or final
legislation will not affect the ability of the Company to deduct interest
on the Subordinated Debentures. If legislation were enacted limiting, in
whole or in part, the deductibility by the Company of interest on the
Subordinated Debentures for United States federal income tax purposes, such
enactment could give rise to a Tax Event which would permit the Company to
cause a redemption of the Preferred Securities or a distribution of the
Subordinated Debentures in liquidation of Delmarva Financing, as described
more fully under "Description of the Preferred Securities -- Special Event
Redemption or Distribution." There can be no assurance that a Tax Event
will not occur.
There can be no assurance as to the market prices for Subordinated
Debentures that may be distributed in exchange for Preferred Securities if
a dissolution or liquidation of Delmarva Financing were to occur.
Accordingly, the Subordinated Debentures that a Holder of Preferred
Securities may receive on termination and liquidation of the Delmarva
Financing may trade at a discount to the price that the investor paid to
purchase the Preferred Securities offered hereby. Because Holders of
Preferred Securities may receive Subordinated Debentures upon the
occurrence of a Special Event, prospective purchasers of Preferred
Securities also are making an investment decision with regard to the
Subordinated Debentures and should review carefully all the information
regarding the Subordinated Debentures contained herein. See "Description
of the Preferred Securities -- Special Event Redemption or Distribution"
and "Description of the Subordinated Debentures."
RIGHTS UNDER THE GUARANTEE; LIMITATION AS TO FUNDS AVAILABLE TO DELMARVA
FINANCING
The Guarantee guarantees to the Holders of the Preferred Securities to
the extent not paid by Delmarva Financing, the payment (but not the
collection) of (i) any accrued and unpaid Distributions required to be paid
on the Preferred Securities, to the extent Delmarva Financing has
sufficient funds available therefor, (ii) the Redemption Price with respect
to Preferred Securities called for redemption by Delmarva Financing, to the
extent Delmarva Financing has sufficient funds available therefor and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of
Delmarva Financing (unless the Subordinated Debentures are distributed to
Holders of the Preferred Securities), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment and (b) the amount of assets of
Delmarva Financing remaining available for distribution to Holders of the
Preferred Securities in liquidation of Delmarva Financing. If the Company
were to default on its obligations under the Subordinated Debentures,
Delmarva Financing would lack available funds for the payment of
Distributions or amounts payable on redemption of the Preferred Securities
or otherwise, and in such event Holders of the Preferred Securities would
not be able to rely upon the Guarantee for payment of such amounts. See
"Description of the Guarantee" and "Description of the Subordinated
Debentures -- Subordination" herein.
LIMITED VOTING RIGHTS
Holders of Preferred Securities generally will have limited voting
rights relating only to the modification of the Preferred Securities and
the exercise of remedies upon the occurrence of an Event of Default.
Holders of Preferred Securities will not be entitled to vote to appoint,
remove or replace the Property Trustee, which voting rights are vested
exclusively in the Holder of the Common Securities, except upon the
occurrence of certain events described herein. The Administrative Trustees
(as defined under "Delmarva Financing") and the Company may amend the Trust
Agreement to ensure that Delmarva Financing will be classified for United
States federal income tax purposes as a grantor trust without the consent
of Holders, even if such action adversely affects the interests of Holders.
See "Description of the Preferred Securities -- Voting Rights," "--
Amendments," "-- Removal of Property Trustee" and "-- Co-Trustees and
Separate Property Trustees."
TRADING CHARACTERISTICS OF PREFERRED SECURITIES
Application has been made to list the Preferred Securities on the
NYSE. If approved for listing, the Preferred Securities may trade at a
price that does not fully reflect the value of accrued but unpaid interest
with respect to the underlying Subordinated Debentures. A Holder that
disposes of Preferred Securities between record dates for payments of
Distributions thereon will be required to include accrued but unpaid
interest on the Subordinated Debentures through the date of disposition in
income as ordinary income and to add such amount to such Holder's adjusted
tax basis in such Holder's pro rata share of the underlying Subordinated
Debentures deemed disposed of. To the extent the selling price is less
than such Holder's adjusted tax basis (which will include, in the form of
OID, all accrued and unpaid interest), such Holder will recognize a capital
loss. Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for United States federal income tax
purposes. See "Certain United States Federal Income Tax Consequences --
Potential Extension of Interest Payment Period and Original Issue Discount"
and "-- Sale, Exchange and Redemption of the Preferred Securities."
THE COMPANY
The Company was incorporated in Delaware on April 22, 1909, and in
Virginia on December 31, 1979. The Company's principal executive offices
are located at 800 King Street, P.O. Box 231, Wilmington, Delaware 19899,
(302) 429-3011.
The Company is an investor-owned public utility which provides
electric service to approximately 437,500 customers in Delaware, ten
primarily Eastern Shore counties in Maryland and the Eastern Shore area of
Virginia in an area consisting of about 6,000 square miles with a
population of approximately 1,141,000. The Company also provides natural
gas service to approximately 98,000 customers in an area consisting of
about 275 square miles with a population of approximately 470,000 in
northern Delaware, including the City of Wilmington.
DELMARVA FINANCING
Delmarva Financing is a statutory business trust created under
Delaware law pursuant to (i) a trust agreement (the "Original Trust
Agreement") executed by the Company, as depositor for Delmarva Financing,
the Property Trustee and an Administrative Trustee, who is an employee of
the Company (together with such other Administrative Trustees from time to
time appointed by the Company, the "Administrative Trustees") and (ii) the
filing of a certificate of trust (the "Certificate of Trust") with the
Delaware Secretary of State on June 28, 1996. Such Original Trust
Agreement will be amended and restated in its entirety (as so amended and
restated, the "Trust Agreement") substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus forms a
part. The Trust Agreement will be qualified as an indenture under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
Delmarva Financing exists for the exclusive purposes of (i) issuing Trust
Securities representing undivided beneficial interests in the assets of
Delmarva Financing, (ii) holding the Subordinated Debentures as trust
assets and (iii) engaging in only those other activities necessary or
incidental thereto. All of the Common Securities, which will represent
approximately 3% of the total capital of Delmarva Financing, will be owned
by the Company. The Common Securities will rank pari passu, and payments
will be made thereon pro rata, with the Preferred Securities, except as
described under "Description of the Preferred Securities -- Subordination
of the Common Securities." Delmarva Financing has a term of approximately
45 years, but may terminate earlier as provided in the Trust Agreement.
Delmarva Financing's business and affairs will be conducted by the
Administrative Trustees. The office of the Property Trustee in the State
of Delaware is Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890. The principal place of business of Delmarva Financing is
c/o Delmarva Power & Light Company, 800 King Street, P.O. Box 231,
Wilmington, Delaware 19899.
RECENT DEVELOPMENT
On August 12, 1996, the Company and Atlantic Energy, Inc. ("AE")
announced that they had signed a merger agreement pursuant to which the
Company and AE's subsidiary, Atlantic City Electric Company, would become
subsidiaries of a new holding company to be registered under the Public
Utility Holding Company Act of 1935, as amended. AE would be merged into
the holding company. The transaction has been approved unanimously by the
board of directors of each company and is subject to the approval of the
holders of common stock of each company. The proposed transaction also is
subject to approval by various regulatory agencies, principally state
public utility commissions, the Federal Energy Regulatory Commission, the
Nuclear Regulatory Commission and the Commission. A filing also must be
made with the Department of Justice and the Federal Trade Commission, and
the waiting period with respect thereto must have expired before the merger
may be consummated. Although the Company cannot predict when all
regulatory approvals will be obtained, both the Company and AE presently
expect that the review process can be completed within 12 to 18 months.
If the proposed merger is consummated, the Subordinated Debentures and
the Guarantee would continue to be obligations of the Company, and the
Company would continue to own the Common Securities.
USE OF PROCEEDS
The proceeds to be received by Delmarva Financing from the sale of the
Preferred Securities will be used to purchase Subordinated Debentures of
the Company. The Company expects to use the proceeds of such purchase to
redeem its 7.52% Preferred Stock ($100 par value) and to purchase ________
shares of its 3.70% Preferred Stock ($100 par value), __________ shares of
its 4% Preferred Stock ($100 par value), ____________ shares of its 4.20%
Preferred Stock ($100 par value), ____________ shares of its 4.28%
Preferred Stock ($100 par value), ____________ shares of its 4.56%
Preferred Stock ($100 par value), ____________ shares of its 5% Preferred
Stock ($100 par value), __________ shares of its 6 3/4% Preferred Stock
($100 par value), __________ shares of its 7 3/4% Preferred Stock -- $25
Par, __________ and shares of its Adjustable Rate Preferred Stock,
Series A ($100 par value), which shares were tendered in connection with
the Company's Offer to Purchase commenced August 22, 1996, and for other
general corporate purposes. To the extent the proceeds are not
immediately so used, they may be invested temporarily in short-term
interest-bearing obligations.
DESCRIPTION OF THE PREFERRED SECURITIES
The following summaries of certain provisions of the Preferred
Securities and the Trust Agreement do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, the
provisions of the Trust Agreement, including the definitions therein of
certain terms, and the Trust Indenture Act. Wherever particular sections
or defined terms of the Trust Agreement are referred to, such sections or
defined terms are incorporated herein by reference. The Trust Agreement
has been filed as an exhibit to the Registration Statement of which this
Prospectus forms a part.
GENERAL
The Preferred Securities and the Common Securities will be created
pursuant to the terms of the Trust Agreement. The Preferred Securities
represent undivided preferred beneficial interests in the assets of
Delmarva Financing and will have a preference under certain circumstances
with respect to Distributions and amounts payable on liquidation,
redemption or otherwise over the Common Securities. The Common Securities
will rank pari passu, and payments will be made thereon pro rata, with the
Preferred Securities, except as described under "-- Subordination of Common
Securities." (Section 4.03). The Subordinated Debentures will be owned by
Delmarva Financing and held by the Property Trustee in trust for the
benefit of the Holders of the Trust Securities. (Section 2.09). The
Subordinated Debentures and the Guarantee, together with the obligations of
the Company with respect to the Preferred Securities under the Indenture,
the Trust Agreement and the Expense Agreement, constitute a full and
unconditional guarantee of the Preferred Securities by the Company.
DISTRIBUTIONS
The Distributions payable on the Preferred Securities will be fixed at
the rate per annum of the stated liquidation amount thereof set forth on
the cover page of this Prospectus. The term "Distributions" as used herein
includes interest payable on overdue Distributions, unless otherwise
stated. The amount of Distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months and for any
period shorter than a full month, on the basis of the actual number of days
elapsed. (Section 4.01(b)). Distributions that are in arrears will bear
interest on the amount thereof at the per annum rate set forth on the cover
page of this Prospectus (to the extent permitted by applicable law,
compounded quarterly).
Distributions on the Preferred Securities will be cumulative, will
accrue from and including the date of initial issuance thereof, and will be
payable quarterly in arrears, on March 31, June 30, September 30 and
December 31 of each year, commencing December 31, 1996, except as otherwise
described below. Such Distributions will accrue to, and including, the
first Distribution payment date (as defined below), and for each subsequent
Distribution payment date will accrue from, and excluding, the last
Distribution payment date through which Distributions have been paid or
duly provided for. In the event that any date on which Distributions are
otherwise payable on the Preferred Securities is not a Business Day,
payment of the Distribution payable on such date will be made on the next
succeeding Business Day, except that, if such Business Day is in the next
succeeding calendar year, payment of such Distribution shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date (each date on which Distributions are
otherwise payable in accordance with the foregoing, a "Distribution payment
date"). (Section 4.01(a)). "Business Day" is used herein to mean any day
other than (i) a Saturday or a Sunday, (ii) a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to remain closed and (iii) a day on which the Corporate
Trust Office of the Property Trustee or the Debenture Trustee is closed for
business. (Section 1.01)
The Company has the right under the Indenture to defer interest
payments on the Subordinated Debentures at any time or from time to time by
extending the interest payment period thereon for Extension Periods up to
20 consecutive quarters, with the consequence that quarterly Distributions
on the Preferred Securities would be deferred (but would continue to accrue
with interest payable on unpaid Distributions at the rate per annum set
forth on the cover page of this Prospectus, compounded quarterly) by
Delmarva Financing during any such Extension Period. (Section 4.01(b)).
In the event that the Company exercises this right, during the Extension
Period the Company may not (i) declare or pay dividends or distributions
(other than dividends or distributions in Common Stock of the Company) on,
or redeem, purchase, acquire, or make a liquidation payment with respect to
any of its capital stock, or (ii) make any payment of principal of,
interest or premium, if any, on, or repay, repurchase or redeem any
indebtedness that is pari passu with the Subordinated Debentures (including
other Debt Securities) or make any guarantee payment with respect to such
indebtedness. See "Description of the Subordinated Debentures -- Option to
Extend Interest Payment Period."
Distributions on the Preferred Securities will be payable to the
Holders thereof as they appear on the register of Delmarva Financing on the
relevant record dates, each of which, so long as the Preferred Securities
are held in book-entry form, will be one Business Day prior to the relevant
Distribution payment date. Subject to any applicable laws and regulations
and the Trust Agreement, each such payment will be made as described under
"-- Book-Entry Only Issuance -- The Depository Trust Company." In the
event any Preferred Securities are not in book-entry form, the relevant
record date for such Preferred Securities shall be the date 15 days prior
to the relevant Distribution payment date or if such date is not a Business
Day, the next succeeding Business Day. (Section 4.01(d)).
REDEMPTION
Upon the repayment of the Subordinated Debentures, whether at maturity
or upon earlier redemption as provided in the Indenture, the proceeds from
such repayment shall be applied by the Property Trustee to redeem a Like
Amount (as defined herein) of Trust Securities, upon not less than 30 nor
more than 60 days' notice, at the Redemption Price. (Section 4.02). See
"Description of the Subordinated Debentures -- Optional Redemption."
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence and during the continuation of a Tax Event or an
Investment Company Event (each, as defined below, a "Special Event"), the
Company has the option to (i) redeem the Subordinated Debentures in whole,
but not in part, and therefore cause a mandatory redemption of all of the
Trust Securities at the Redemption Price within 90 days following the
occurrence of such Special Event, or (ii) cause the termination of Delmarva
Financing and in connection therewith, after satisfaction of all amounts
due to creditors of Delmarva Financing, if any, cause the Subordinated
Debentures to be distributed to the Holders of the Trust Securities within
90 days following the occurrence of such Special Event; provided that in
the case of the occurrence of a Tax Event, as a condition to any such
termination and distribution, the Administrative Trustees shall have
received an opinion of nationally recognized independent tax counsel
experienced in such matters, which opinion may rely on any then applicable
published revenue rulings of the Internal Revenue Service, to the effect
that the Holders of the Preferred Securities will not recognize any gain or
loss for United States federal income tax purposes as a result of the
termination of the Trust and the distribution of the Subordinated
Debentures (a "No Recognition Opinion"). See "Certain United States
Federal Income Tax Consequences -- Receipt of Subordinated Debentures or
Cash Upon Liquidation of Delmarva Financing." If the Company does not
elect either option (i) or (ii) above, the Preferred Securities will remain
outstanding and, in the event a Tax Event has occurred and is continuing,
Additional Interest (as defined under "Description of the Subordinated
Debentures -- Additional Interest") will be payable on the Subordinated
Debentures.
"Like Amount" means, as the context requires, (i) with respect to a
redemption of Trust Securities, Trust Securities having a liquidation
amount equal to the principal amount of Subordinated Debentures to be
contemporaneously redeemed and (ii) with respect to a distribution of
Subordinated Debentures to Holders of Trust Securities in connection with a
liquidation of Delmarva Financing, Subordinated Debentures having a
principal amount equal to the liquidation amount of the Trust Securities
with respect to which such Subordinated Debentures are to be distributed.
(Section 1.01)
"Tax Event" means the receipt by Delmarva Financing of an opinion of
counsel (which may be counsel to the Company or an affiliate but not an
employee thereof and which must be acceptable to the Property Trustee)
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 affecting
taxation, or as a result of any official administrative or judicial
pronouncement or decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement
or decision is announced on or after the date of original issuance of the
Preferred Securities, there is more than an insubstantial risk that at such
time or within 90 days of the date thereof (i) Delmarva Financing is, or
will be, 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 will not be,
fully deductible by the Company for United States federal income tax
purposes, or (iii) Delmarva Financing is, or will be, subject to more than
a de minimis amount of other taxes, duties or other governmental charges.
(Section 1.01)
"Investment Company Event" means the occurrence of a change in law or
regulation or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or
regulatory authority to the effect that Delmarva Financing is or will be
considered an "investment company" that is required to be registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), which
change in law becomes effective on or after the date of original issuance
of the Preferred Securities. (Section 1.01).
On the date fixed for the distribution of Subordinated Debentures upon
termination of Delmarva Financing (i) the Trust Securities no longer will
be deemed to be outstanding and (ii) all rights of the Holders thereof will
cease, except the right to receive Subordinated Debentures upon surrender
of the certificates representing their Trust Securities. (Section 9.04).
If the Subordinated Debentures are distributed to the Holders of
Preferred Securities, the Company will use its best efforts to list the
Subordinated Debentures on the NYSE or on such other exchange on which the
Preferred Securities then are listed.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date (as defined
below) shall be redeemed at the Redemption Price with the proceeds from the
contemporaneous redemption of Subordinated Debentures. Redemptions of the
Preferred Securities shall be made and the Redemption Price shall be deemed
payable on each date selected for redemption (the "Redemption Date") only
if Delmarva Financing has funds available for the payment of such
Redemption Price. (Section 4.02(c)). See also "-- Subordination of Common
Securities."
If Delmarva Financing shall give a notice of redemption in respect of
Preferred Securities, then, on or before the Redemption Date, the Property
Trustee will deposit irrevocably with the paying agent for such Preferred
Securities funds sufficient to pay the applicable Redemption Price and will
give such paying agent irrevocable instructions to pay the Redemption Price
to the Holders thereof upon surrender of their certificates evidencing such
Preferred Securities. Notwithstanding the foregoing, Distributions payable
on or prior to the Redemption Date for any Preferred Securities called for
redemption shall be payable to the Holders of such Preferred Securities on
the relevant record dates for the related Distribution payment dates. If
notice of redemption shall have been given and funds deposited as required,
then on the Redemption Date, all rights of Holders of such Preferred
Securities so called for redemption will cease, except the right of the
Holders of such Preferred Securities to receive the Redemption Price, but
without interest thereon, and such Preferred Securities will cease to be
outstanding. In the event that any date fixed for redemption of Preferred
Securities is not a Business Day, then payment of the amount 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).
In the event that payment of the Redemption Price in respect of Preferred
Securities called for redemption is not paid either by Delmarva Financing
or by the Company pursuant to the Guarantee, Distributions on such
Preferred Securities will continue to accrue at the then applicable rate,
from the original Redemption Date to the date of payment. (Section
4.02(d)).
If less than all the Trust Securities are to be redeemed on a
Redemption Date, then the aggregate liquidation amount of such securities
to be redeemed shall be allocated on a pro rata basis to the Common
Securities and the Preferred Securities. The particular Preferred
Securities to be redeemed shall be selected not more than 60 days prior to
the Redemption Date by the Property Trustee from the outstanding Preferred
Securities not previously called for redemption, by such method as the
Property Trustee shall deem fair and appropriate and which may provide for
the selection for redemption of Preferred Securities in liquidation amounts
equal to $25 or integral multiples thereof. The Property Trustee shall
notify the Registrar promptly in writing of the Preferred Securities
selected for redemption and, in the case of any Preferred Securities
selected for partial redemption, the liquidation amount thereof to be
redeemed. For all purposes of the Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Preferred
Securities shall relate, in the case of any Preferred Securities redeemed
or to be redeemed only in part, to the portion of the liquidation amount of
Preferred Securities that has been or is to be redeemed.
(Section 4.02(e)).
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Trust
Securities, shall be made pro rata based on the liquidation amount of the
Trust Securities; provided that if on any Distribution payment date or
Redemption Date any Event of Default resulting from an Event of Default
under the Indenture (a "Debenture Event of Default") shall have occurred
and be continuing, no payment of any Distribution on, or Redemption Price
of, any Common Security, and no other payment on account of the redemption,
liquidation or other acquisition of Common Securities, shall be made unless
payment in full in cash of all accrued and unpaid Distributions on all
Preferred Securities for all distribution periods terminating on or prior
thereto, or in the case of payment of the Redemption Price, the full amount
of such Redemption Price on all Preferred Securities, shall have been made
or provided for. (Section 4.03(a)).
In the case of an Event of Default resulting from a Debenture Event of
Default under the Indenture, the Company as Holder of the Common Securities
will be deemed to have waived any such Event of Default until the effect of
all such Events of Default with respect to the Preferred Securities have
been cured, waived or otherwise eliminated. Until all such Events of
Default have been so cured, waived or otherwise eliminated, the Property
Trustee shall act solely on behalf of the Holders of the Preferred
Securities, and only Holders of Preferred Securities will have the right to
direct the Property Trustee to act. (Section 4.03(b)).
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to the Trust Agreement, Delmarva Financing shall terminate
and shall be liquidated by the Property Trustee on December 31, 2041 or, if
earlier, on the first to occur of: (i) the bankruptcy, dissolution or
liquidation of the Company; (ii) the redemption of all of the Preferred
Securities, (iii) the termination and liquidation of Delmarva Financing
upon the occurrence of a Special Event and, in the case of a Tax Event,
receipt by the Property Trustee of a No Recognition Opinion, and (iv) the
entrance by a court of competent jurisdiction of an order for judicial
termination of Delmarva Financing. (Sections 9.01 and 9.02).
If an early termination occurs as described in clause (i), (iii) or
(iv) above, Delmarva Financing shall be liquidated by the Property Trustee
by distributing to each Holder of Preferred Securities and Common
Securities a Like Amount of Subordinated Debentures, unless such
distribution is determined by the Property Trustee not to be practical, in
which event such Holders will be entitled to receive, out of the assets of
Delmarva Financing available for distribution to Holders after adequate
provision, as determined by the Property Trustee, has been made for the
satisfaction of all amounts due to creditors, if any, an amount equal to
the aggregate liquidation amount of the Trust Securities plus accrued 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 Delmarva Financing has insufficient assets available
to pay in full the aggregate Liquidation Distribution, then the amounts
payable directly by Delmarva Financing on the Trust Securities shall be
paid on a pro rata basis, except that if a Debenture Event of Default has
occurred and is continuing, or if a Debenture Event of Default has not
occurred solely by reason of a requirement that time lapse or notice be
given, the Liquidation Distribution with respect to the Preferred
Securities shall be paid in full prior to making any Liquidation
Distribution with respect to the Common Securities. (Sections 9.04(a) and
(e)).
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an Event of Default under
the Trust Agreement:
(i) the occurrence of a Debenture Event of Default (see
"Description of the Subordinated Debentures -- Events of Default"); or
(ii) default by Delmarva Financing in the payment of any
Distribution when it becomes due and payable, and continuation of such
default for a period of 30 days; or
(iii) default by Delmarva Financing in the payment of any
Redemption Price of any Trust Security when it becomes due and
payable; or
(iv) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in the Trust
Agreement (other than a covenant or warranty a default in the
performance of which or the breach of which is specifically dealt with
in clause (ii) or (iii) above), and continuation of such default or
breach for a period of 60 days after there has been given, by
registered or certified mail, to the Property Trustee by the Holders
of Preferred Securities having at least 10% of the total liquidation
amount of the outstanding Preferred Securities, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a Notice of Default thereunder; or
(v) the occurrence of certain events of bankruptcy or insolvency
with respect to Delmarva Financing. (Section 1.01).
Within five Business Days after the occurrence of any Event of
Default, the Property Trustee shall transmit to the Holders of Trust
Securities, the Administrative Trustees and the Company notice of such
Event of Default known to the Property Trustee, unless such Event of
Default shall have been cured or waived. (Section 8.02(a)).
VOTING RIGHTS
Holders of Trust Securities shall be entitled to one vote for each $25
in liquidation amount represented by their Trust Securities in respect of
any matter as to which such Holders of Trust Securities are entitled to
vote. Except as described below and under "-- Amendments," and under
"Description of the Guarantee -- Amendments and Assignment" and as
otherwise required by law and the Trust Agreement, the Holders of the
Preferred Securities will have no voting rights. (Section 6.01(a)). In
the event that the Company elects to defer payments of interest on the
Subordinated Debentures as described under "-- Distributions," the Holders
of the Preferred Securities do not have the right to appoint a special
representative or trustee or otherwise act to protect their interests.
So long as any Subordinated Debentures are held by the Property
Trustee, the Property Trustee 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 the
Debenture Trustee with respect to the Subordinated Debentures, (ii) waive
any past default which is waivable under Section 813 of the Indenture,
(iii) exercise any right to rescind or annul a declaration that the
principal of all the Subordinated Debentures shall be due and payable 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
Preferred Securities having at least 66 2/3% of the liquidation amount of
the outstanding Preferred Securities; provided 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 consent of each Holder of Preferred Securities.
The Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Preferred Securities. If the Property Trustee
fails to enforce its rights under the Subordinated Debentures or the Trust
Agreement, any Holder of Preferred Securities may institute a legal
proceeding directly against the Company to enforce the Property Trustee's
rights under the Subordinated Debentures or the Trust Agreement, to the
fullest extent permitted by law, without first instituting any legal
proceeding against the Property Trustee or any other person or entity.
(Section 6.01(a) and (b)). The Property Trustee shall notify all Holders
of the Preferred Securities of any notice of Event of Default received from
the Debenture Trustee. In addition to obtaining the foregoing approvals of
the Holders of the Preferred Securities, prior to taking any of the
foregoing actions, the Property Trustee shall receive an opinion of counsel
experienced in such matters to the effect that Delmarva Financing will be
classified as a "grantor trust" and will not be classified as an
association taxable as a corporation for United States federal income tax
purposes on account of such action. Notwithstanding the foregoing, a
Holder of Preferred Securities may institute a proceeding for enforcement
of payment to such Holder directly of principal of or interest on the
Subordinated Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder on or after
the due dates specified in the Subordinated Debentures.
AMENDMENTS
The Trust Agreement may be amended from time to time by a majority of
the Administrative Trustees, the Property Trustee and the Company, without
the consent of any Holders of Trust Securities, (i) to cure any ambiguity,
correct or supplement any provision therein which may be inconsistent with
any other provision therein, 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, provided
that any such amendment shall not adversely affect in any material respect
the interests of any Holder of Trust Securities, (ii) to modify, eliminate
or add to any provisions of the Trust Agreement to such extent as shall be
necessary to ensure that Delmarva Financing will not be classified for
United States federal income tax purposes other than as a "grantor trust"
at any time that any Trust Securities are outstanding or to ensure Delmarva
Financing's exemption from the status of an "investment company" under the
1940 Act, or (iii) to effect the acceptance of a successor Trustee
appointment. In the case of clause (i), any amendments of the Trust
Agreement shall become effective when notice thereof is given to the
Holders of Trust Securities (Section 10.03(a)).
Except as provided below, any provision of the Trust Agreement may be
amended by a majority of the Administrative Trustees, the Property Trustee
and the Company with (i) the consent of Holders of Trust Securities
representing not less than a majority of the liquidation amount of the
Trust Securities then outstanding 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 Delmarva Financing's status as a grantor trust for United States
federal income tax purposes or affect Delmarva Financing's exemption from
status of an "investment company" under the 1940 Act. (Section 10.03(b)).
Without the consent of each affected Holder of Trust Securities, the
Trust Agreement may not be amended to (i) change the amount or timing of
any Distributions with respect to the Trust Securities or otherwise
adversely affect the amount of any Distributions required to be made in
respect of the Trust Securities as of a specified date, (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 or (iii) change the requirement
that each affected Holder consent to amendments in respect of clauses (i)
or (ii) above. (Section 10.03(c)).
REMOVAL OF PROPERTY TRUSTEE
Unless an Event of Default under the Indenture shall have occurred and
be continuing, the Property Trustee may be removed at any time by the
Company, as the Holder of the Common Securities. If an Event of Default
under the Indenture has occurred and is continuing, the Property Trustee
may be removed at such time by act of the Holders of Preferred Securities
having a majority of the liquidation amount of the outstanding Preferred
Securities. In no event will the Holders of the Preferred 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 and no appointment of a successor trustee shall be effective until
the acceptance of appointment by the successor Property Trustee in
accordance with the provisions of the Trust Agreement. (Section 8.10).
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default under the Indenture 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 Property (as defined in the Trust Agreement) may at the
time be located, the Company and the Property Trustee shall have power to
appoint, and upon the written request of the Property Trustee, the Company
shall for such purpose join with the Property Trustee in the execution,
delivery and performance of all instruments and agreements necessary or
proper to appoint one or more persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or
any part of such Trust 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 the Trust Agreement. If the
Company does not join in such appointment within 15 days after the receipt
by it of a request so to do, or in case an Event of Default under the
Indenture has occurred and is continuing, the Property Trustee alone shall
have power to make such appointment. (Section 8.09(a)).
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
DTC will act as securities depositary for all of the Preferred
Securities. The Preferred Securities initially will be issued only as
fully-registered securities registered in the name of Cede & Co. ("DTC's
nominee"). One or more fully-registered global Preferred Securities
certificates, representing the aggregate number of Preferred Securities,
will be issued and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and
a "clearing agency" registered pursuant to the provisions of Section 17A of
the 1934 Act. DTC holds securities that its participants ("Participants")
deposit with DTC. DTC also facilitates the settlement among Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement
of securities certificates. Direct Participants include securities brokers
and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of
its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system also is available to others, such
as securities brokers and dealers, banks and trust companies that clear
transactions through or maintain a direct or indirect custodial
relationship with a Direct Participant ("Indirect Participants"). The
rules applicable to DTC and its Direct Participants and Indirect
Participants are on file with the Commission.
Purchases of Preferred Securities within the DTC system must be made
by or through Direct Participants, which will receive a credit for the
Preferred Securities on DTC's records. The ownership interest of each
actual purchaser of each Preferred Security (the "Beneficial Owner") is in
turn to be recorded on the Participants' records. Beneficial Owners will
not receive written confirmation from DTC of their purchases, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their
holdings, from the Participants through which the Beneficial Owners
purchased Preferred Securities. Transfers of ownership interests in the
Preferred Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in the
Preferred Securities, except in the event that use of the book-entry system
for the Preferred Securities is discontinued.
To facilitate subsequent transfers, all the Preferred Securities
deposited by Direct Participants with DTC are registered in the name of
DTC's nominee, Cede & Co. The deposit of Preferred Securities with DTC and
their registration in the name of Cede & Co. will effect no change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners
of the Preferred Securities. DTC's records reflect only the identity of
the Direct Participants to whose accounts such Preferred Securities are
credited, which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on behalf of
their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by
Participants to Beneficial Owners will be governed by arrangements among
them, subject to any statutory or regulatory requirements that may be in
effect from time to time.
Redemption notices shall be sent to Cede & Co. as the registered
Holder of Preferred Securities. If less than all of the Preferred
Securities are being redeemed, DTC's current practice is to determine by
lot the amount of the interest of each Direct Participant in such issue to
be redeemed.
Although voting with respect to the Preferred Securities is limited,
in those cases where a vote is required, neither DTC nor Cede & Co. will
itself consent or vote with respect to Preferred Securities. Under its
usual procedures, DTC would mail an Omnibus Proxy to Delmarva Financing as
soon as possible after the record date. The Omnibus Proxy assigns Cede &
Co. consenting or voting rights to those Direct Participants to whose
accounts the Preferred Securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy). The Company and
Delmarva Financing believe that the arrangements among DTC, Direct and
Indirect Participants, and Beneficial Owners will enable the Beneficial
Owners to exercise rights equivalent in substance to the rights that can be
exercised directly by a holder of a beneficial interest in Delmarva
Financing.
Payment of Distributions on the Preferred Securities will be made to
DTC. DTC's practice is to credit Direct Participants' accounts on the
relevant Distribution payment date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it
will not receive payments on such payment date. Payments by Participants
to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers in bearer form or registered in "street name," and such payments
will be the responsibility of such Participant and not of DTC, the Property
Trustee, Delmarva Financing or the Company, subject to any statutory or
regulatory requirements to the contrary that may be in effect from time to
time. Payment of Distributions to DTC is the responsibility of Delmarva
Financing, disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Participants.
Except as provided herein, a Beneficial Owner will not be entitled to
receive physical delivery of Preferred Securities. Accordingly, each
Beneficial Owner must rely on the procedures of DTC to exercise any rights
under the Preferred Securities.
DTC may discontinue providing its services as securities depositary
with respect to the Preferred Securities at any time by giving reasonable
notice to Delmarva Financing and the Company. Under such circumstances, in
the event that a successor securities depositary should not be obtained,
Preferred Securities certificates would be required to be printed and
delivered. Additionally, the Administrative Trustees (with the consent of
the Company) may decide to discontinue use of the system of book-entry
transfers through DTC (or any successor depositary) with respect to the
Preferred Securities. In that event, certificates for the Preferred
Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Company and Delmarva
Financing believe to be reliable, but neither the Company nor Delmarva
Financing takes responsibility for the accuracy thereof.
FORM, EXCHANGE, AND TRANSFER
The following provisions shall apply to the Preferred Securities only
in the event that the Preferred Securities are no longer held in book-entry
only form.
Preferred Securities will be issuable only in fully registered form,
each having a liquidation amount of $25 and any integral multiple thereof.
Preferred Securities will be exchangeable for other Preferred Securities,
of any authorized denomination and of like tenor and aggregate liquidation
amount. Preferred Securities may be presented for exchange as provided
above or for registration of transfer (duly endorsed or accompanied by a
duly executed instrument of transfer) at the office of the Transfer Agent
designated for such purpose. Initially, Wilmington Trust Company will act
as Registrar and Transfer Agent for the Preferred Securities. (Section
5.03(b)).
No service charge will be made for any registration of transfer or
exchange of Preferred Securities, but Delmarva Financing may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. (Section 5.03(d)). Such transfer or
exchange will be effected upon the Transfer Agent being satisfied with the
documents of title and identity of the person making the request. The
Administrative Trustees may at any time designate additional Transfer
Agents or rescind the designation of any Transfer Agent or approve a change
in the office through which any Transfer Agent acts.
Delmarva Financing will not be required to (i) issue, register the
transfer of, or exchange any Preferred Securities during a period beginning
at the opening of business 15 calendar days before the day of mailing of a
notice of redemption of any Preferred Securities called for redemption and
ending at the close of business on the day of such mailing or (ii) register
the transfer of or exchange any Preferred Securities so selected for
redemption, in whole or in part, except the unredeemed portion of any such
Preferred Securities being redeemed in part. (Section 5.03(c)).
CONCERNING THE PROPERTY TRUSTEE
The Company maintains deposit accounts and conducts other banking
transactions with the Property Trustee in the ordinary course of their
businesses. The Property Trustee also acts as the Guarantee Trustee
and the Debenture Trustee.
MISCELLANEOUS
Application has been made to list the Preferred Securities on the
NYSE.
The Property Trustee will act as the resident trustee in the State of
Delaware, will hold the Subordinated Debentures on behalf of Delmarva
Financing, will maintain a payment account with respect to the Trust
Securities and will act as trustee under the Trust Agreement for the
purposes of the Trust Indenture Act. The Administrative Trustees will
administer the day-to-day operations of Delmarva Financing.
The Administrative Trustees are authorized and directed to conduct the
affairs of Delmarva Financing and to operate Delmarva Financing so that
Delmarva Financing will not be deemed to be an "investment company"
required to be registered under the 1940 Act or taxed as a corporation 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 Administrative
Trustees and the Company are authorized to take any action, not
inconsistent with applicable law, the Certificate of Trust or the Trust
Agreement, that the Administrative Trustees and the Company 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 Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar
rights.
DESCRIPTION OF THE GUARANTEE
The following summary of certain provisions of the Guarantee does
not purport to be complete and is subject in all respects to the provisions
of, and is qualified in its entirety by reference to, the Guarantee,
including the definitions therein of certain terms, and the Trust Indenture
Act. Whenever particular Sections or defined terms of the Guarantee are
referred to, such Sections or defined terms are incorporated herein by
reference. The Guarantee is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
GENERAL
The Guarantee will be qualified as an indenture under the Trust
Indenture Act. Wilmington Trust Company will act as indenture trustee
under the Guarantee for the purpose of compliance with the Trust Indenture
Act (the "Guarantee Trustee") and will hold the Guarantee for the benefit
of the Holders of the Preferred Securities.
The Company will agree fully and unconditionally to the extent set
forth herein, to pay the Guarantee Payments (as defined below) in full to
the Holders of the Preferred Securities (except to the extent paid by or on
behalf of Delmarva Financing), as and when due, regardless of any defense,
right of set-off or counterclaim that the Company may have or assert. The
following payments with respect to the Preferred Securities, to the extent
not paid by or on behalf of Delmarva Financing (the "Guarantee Payments"),
will be subject to the Guarantee (without duplication): (i) any accrued and
unpaid Distributions required to be paid on the Preferred Securities, but
only to the extent the Property Trustee has available in the payment
account sufficient funds to make such payment, (ii) the Redemption Price
with respect to any Preferred Securities called for redemption by Delmarva
Financing, but only to the extent the Property Trustee has available in the
payment account sufficient funds to make such payment and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of Delmarva
Financing (other than in connection with a redemption of all of the
Preferred Securities), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Preferred Securities
to the date of payment and (b) the amount of assets of Delmarva Financing
remaining available for distribution to Holders of Preferred Securities in
liquidation of Delmarva Financing. 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 Preferred Securities or by causing
Delmarva Financing to pay such amounts to such Holders. (Section 5.01).
The Guarantee will be a guarantee with respect to the Preferred
Securities issued by Delmarva Financing from the time of issuance of the
Preferred Securities, but will not apply to (i) any payment of
Distributions if and to the extent that Delmarva Financing does not have
funds available to make such payments, or (ii) collection of payment. If
the Company does not make interest payments on the Subordinated Debentures
held by Delmarva Financing, Delmarva Financing will not have funds
available to pay Distributions on the Preferred Securities. The Guarantee
will rank subordinate and junior in right of payment to Senior Indebtedness
of the Company (except those made pari passu by their terms). See "Status
of the Guarantee." The Company has agreed in the Expense Agreement to
provide funds to Delmarva Financing as needed to pay obligations of
Delmarva Financing to parties other than Holders of Trust Securities. The
Subordinated Debentures and the Guarantee, together with the obligations of
the Company with respect to the Preferred Securities under the Indenture,
the Trust Agreement, the Guarantee and the Expense Agreement, constitute a
full and unconditional guarantee of the Preferred Securities by the
Company. 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 has the effect of
providing a full and unconditional guarantee by the Company of the
Preferred Securities.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely
affect the rights of Holders of Preferred Securities (in which case no vote
will be required), the terms of the Guarantee may be changed only with the
prior approval of the Holders of Preferred Securities having at least 66
2/3% of the liquidation amount of the outstanding Preferred Securities.
(Section 8.02). All guarantees and agreements contained in the Guarantee
shall bind the successors, assigns, receivers, trustees and representatives
of the Company and shall inure to the benefit of the Holders of the
Preferred Securities then outstanding. (Section 8.01).
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of
the Company to perform any of its payment obligations thereunder. The
Holders of Preferred Securities having a majority of the liquidation amount
of the Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of the Guarantee or to direct the exercise of
any trust or power conferred upon the Guarantee Trustee under the
Guarantee. Any Holder of Preferred Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against Delmarva
Financing, the Guarantee Trustee or any other person or entity. (Section
5.04).
The Company, as Guarantor, will be required to provide annually to the
Guarantee Trustee a statement as to the performance by the Company of
certain of its obligations under the Guarantee and as to any default in
such performance and an officer's certificate as to the Company's
compliance with all conditions under the Guarantee. (Section 2.04).
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default by the
Company in performance of the Guarantee, has undertaken 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 as a prudent individual would exercise 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 Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might
be incurred thereby. (Section 3.01). See "Description of the Preferred
Securities -- Concerning the Property Trustee."
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect
upon full payment of the Redemption Price of all Preferred Securities, the
distribution of Subordinated Debentures to Holders of Preferred Securities
in exchange for all of the Preferred Securities or full payment of the
amounts payable upon liquidation of Delmarva Financing. The Guarantee will
continue to be effective or will be reinstated, as the case may be, if at
any time any Holder of Preferred Securities must restore payment of any
sums paid under the Preferred Securities or the Guarantee. (Section 7.01).
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Company
and will rank subordinate and junior in right of payment to all Senior
Indebtedness of the Company to the same extent as the Subordinated
Debentures. (Section 6.01). The Trust Agreement provides that each Holder
of Preferred Securities by acceptance thereof agrees to the subordination
provisions and other terms of the Guarantee.
The Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding
directly against the Guarantor to enforce its rights under the Guarantee
without first instituting a legal proceeding against any other person or
entity).
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
DESCRIPTION OF THE SUBORDINATED DEBENTURES
The following summary of the Subordinated Debentures and certain
provisions of the Indenture does not purport to be complete and is
qualified in its entirety by reference to the Indenture, including the
definition therein of certain terms and the Trust Indenture Act. Whenever
particular sections or defined terms in the Indenture are referred to
herein, such sections or defined terms are incorporated herein by
reference. The Indenture is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
GENERAL
The Indenture provides for the issuance of subordinated debentures
(including the Subordinated Debentures), notes or other evidence of
indebtedness by the Company (each a "Debt Security") in an unlimited amount
from time to time. The Subordinated Debentures constitute a separate
series under the Indenture.
The Subordinated Debentures will be limited in aggregate principal
amount to the sum of the aggregate liquidation amount of the Trust
Securities. The Subordinated Debentures are unsecured, subordinated
obligations of the Company which rank junior to all of the Company's Senior
Indebtedness. The Subordinated Debentures will bear interest at the same
rate, payable at the same times, as the Distributions payable on the Trust
Securities, and will have a maturity and redemption provisions correlative
to those of the Trust Securities.
The entire outstanding principal amount of the Subordinated Debentures
will become due and payable, together with any accrued and unpaid interest
thereon, including Additional Interest, if any, on ___________________ ,
2036. The amounts payable as principal and interest on the Subordinated
Debentures will be sufficient to provide for payment of Distributions
payable on the Trust Securities.
If Subordinated Debentures are distributed to Holders of Preferred
Securities in a termination of Delmarva Financing, such Subordinated
Debentures will be issued in fully-registered certificated form in
denominations of $25 and integral multiples thereof and may be transferred
or exchanged at the offices described below.
Payments of principal and interest on Subordinated Debentures will be
payable, the transfer of Subordinated Debentures will be registrable, and
Subordinated Debentures will be exchangeable for Subordinated Debentures of
other denominations of a like aggregate principal amount, at the corporate
trust office of the Debenture Trustee in Wilmington, Delaware; provided,
however, that payment of interest may be made at the option of the Company
by check mailed to the address of the persons entitled thereto and that the
payment in full of principal with respect to any Subordinated Debenture
will be made only upon surrender of such Subordinated Debenture to the
Debenture Trustee.
OPTIONAL REDEMPTION
On or after _________________________, 2001, the Company will have
the option, at any time and from time to time, to redeem the Subordinated
Debentures, in whole or in part, at a redemption price equal to 100% of the
principal amount of the Subordinated Debentures being redeemed, together
with any accrued but unpaid interest, including Additional Interest, if
any, to the Redemption Date.
If a Special Event shall occur and be continuing, the Company shall
have the option to redeem the Subordinated Debentures, in whole but not in
part, at a redemption price equal to 100% of the principal amount of
Subordinated Debentures then outstanding plus any accrued and unpaid
interest, including Additional Interest, if any, to the Redemption Date.
The Subordinated Debentures will be subject to optional redemption in whole
but not in part upon the termination and liquidation of Delmarva Financing
pursuant to an order for the dissolution, termination or liquidation of
Delmarva Financing entered by a court of competent jurisdiction.
For so long as Delmarva Financing is the Holder of all the outstanding
Subordinated Debentures, the proceeds of any such redemption will be used
by Delmarva Financing to redeem Trust Securities in accordance with their
terms. The Company may not redeem less than all the Subordinated
Debentures unless all accrued and unpaid interest (including any Additional
Interest) has been paid in full on all outstanding Subordinated Debentures
for all quarterly interest periods terminating on or prior to the date of
redemption.
Any optional redemption of Subordinated Debentures shall be made upon
not less than 30 nor more than 60 days' notice from the Debenture Trustee
to the Holders of Subordinated Debentures, as provided in the Indenture.
INTEREST
The Subordinated Debentures shall bear interest at the rate per annum
set forth on the cover page of this Prospectus. Such interest is payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of
each year, commencing December 31, 1996.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months and for any period shorter
than a full month, on the basis of the actual number of days elapsed
(Section 310). 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 which
is a Business Day, except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if
made on the date the payment was originally payable (Section 113).
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company has the right under the Indenture to extend the interest
payment period from time to time on the Subordinated Debentures for an
Extension Period of up to 20 consecutive quarters during which period
interest will be compounded quarterly. At the end of an Extension Period,
the Company must pay all interest then accrued and unpaid (together with
interest thereon at the rate specified for the Subordinated Debentures
compounded quarterly, to the extent permitted by applicable law). However,
during any such Extension Period, the Company shall not (i) declare or pay
any dividend or distribution (other than a dividend or distribution in
Common Stock of the Company) on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or (ii) make
any payment of principal of, interest or premium, if any, on, or repay,
repurchase or redeem any indebtedness that is pari passu with the
Subordinated Debentures (including other Debt Securities), or make any
guarantee payments with respect to such indebtedness. Prior to the
termination of any such Extension Period, the Company may further extend
the interest payment period provided, however, that such Extension Period
together with all such previous and further extensions thereof shall not
exceed 20 consecutive quarters at any one time or extend beyond the
maturity date of the Subordinated Debentures. Any Extension Period with
respect to payment of interest on the Subordinated Debentures, other Debt
Securities or on any similar securities will apply to all such securities
and will also apply to Distributions with respect to the Preferred
Securities and all other securities with terms substantially the same as
the Preferred Securities. Upon the termination of any such Extension
Period and the payment of all amounts then due, the Company may select 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.
The Company will give Delmarva Financing and the Debenture Trustee notice
of its election of an Extension Period prior to the earlier of (i) one
Business Day prior to the record date for the distribution which would
occur but for such election or (ii) the date the Company is required to
give notice to the NYSE or other applicable self-regulatory organization of
the record date and will cause Delmarva Financing to send notice of such
election to the Holders of Preferred Securities.
ADDITIONAL INTEREST
So long as any Preferred Securities remain outstanding, if Delmarva
Financing shall be required to pay, with respect to its income derived from
the interest payments on the Subordinated Debentures, any amounts for or on
account of any taxes, duties, assessments or governmental charges of
whatever nature imposed by the United States, or any other taxing
authority, then, in any such case, the Company will pay as interest on such
Subordinated Debentures such additional interest (the "Additional
Interest") as may be necessary in order that the net amounts received and
retained by Delmarva Financing after the payment of such taxes, duties,
assessments or governmental charges shall result in Delmarva Financing's
having such funds as it would have had in the absence of the payment of
such taxes, duties, assessments or governmental charges. (Section 312).
DEFEASANCE
The principal amount of any series of Debt Securities issued under the
Indenture will be deemed to have been paid for purposes of the Indenture
and the entire indebtedness of the Company in respect thereof will be
deemed to have been satisfied and discharged, if there shall have been
irrevocably deposited with the Debenture Trustee or any paying agent, in
trust: (i) money in an amount which will be sufficient, or (ii) in the
case of a deposit made prior to the maturity of the Subordinated
Debentures, Government Obligations (as defined below), which do not contain
provisions permitting the redemption or other prepayment thereof at the
option of the issuer thereof, the principal of and the interest on which
when due, without any regard to reinvestment thereof, will provide moneys
which, together with the money, if any, deposited with or held by the
Debenture Trustee, will be sufficient, or (iii) a combination of (i) and
(ii) which will be sufficient, to pay when due the principal of and
premium, if any, and interest, if any, due and to become due on the Debt
Securities of such series that are outstanding; provided that if such
deposit shall have been made prior to the maturity of such Debt Securities,
the Company shall have delivered to the Debenture Trustee an opinion of
counsel to the effect that the holders of such Debt Securities will not
recognize income, gain or loss for federal income tax purposes as a result
of the satisfaction and discharge of the Company's indebtedness in respect
of such Debt Securities, and such holders will be subject to federal income
taxation on the same amounts and in the same manner and at the same times
as if such satisfaction and discharge had not occurred. For this purpose,
"Government Obligations" include direct obligations of, or obligations
unconditionally guaranteed by, the United States of America entitled to the
benefit of the full faith and credit thereof and certificates, depositary
receipts or other instruments which evidence a direct ownership interest in
such obligations or in any specific interest or principal payments due in
respect thereof. (Section 701).
SUBORDINATION
The Subordinated Debentures will be subordinate and junior in right of
payment to all Senior Indebtedness of the Company to the extent provided in
the Indenture. No payment of principal of (including redemption and
sinking fund payments), or interest on, the Subordinated Debentures may be
made (i) upon the occurrence of certain events of bankruptcy, insolvency or
reorganization, (ii) if any Senior Indebtedness is not paid when due, (iii)
if any other default has occurred pursuant to which the Holders of Senior
Indebtedness have accelerated the maturity thereof and with respect to (ii)
and (iii), such default has not been cured or waived, or (iv) if the
maturity of any series of Debt Securities has been accelerated, because of
an event of default with respect thereto, which remains uncured. Upon any
payment or distribution of assets of the Company 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, and 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 thereon. (Section 1502). Subject to the prior payment of all
Senior Indebtedness, 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 Senior
Indebtedness until all amounts owing on the Subordinated Debentures are
paid in full. (Section 1504).
The term "Senior Indebtedness" is defined in the Indenture to mean all
obligations (other than non-recourse obligations and the indebtedness
issued under the Indenture) of, or guaranteed or assumed by, the Company
for borrowed money, including both senior and subordinated indebtedness for
borrowed money (other than the Debt Securities), or for the payment of
money relating to any lease which is capitalized on the consolidated
balance sheet of the Company and its subsidiaries in accordance with
generally accepted accounting principles as in effect from time to time, or
evidenced by bonds, debentures, notes or other similar instruments, and in
each case, amendments, renewals, extensions, modifications and refundings
of any such indebtedness or obligations, whether existing as of the date of
this Indenture or subsequently incurred by the Company unless, in the case
of any particular indebtedness, renewal, extension or refunding, the
instrument creating or evidencing the same or the assumption or guarantee
of the same expressly provides that such indebtedness, renewal, extension
or refunding is not superior in right of payment to or is pari passu with
the Subordinated Debentures; provided that the Company's obligations under
the Guarantee shall not be deemed to be Senior Indebtedness. (Section 101).
CONSOLIDATION, MERGER, AND SALE OF ASSETS
Under the terms of the Indenture, the Company may not consolidate with
or merge into any other entity or convey, transfer or lease its properties
and assets substantially as an entirety to any entity, unless (i) the
corporation formed by such consolidation or into which the Company is
merged or the entity which acquires by conveyance or transfer, or which
leases, the property and assets of the Company substantially as an entirety
shall be a entity organized and validly existing under the laws of any
domestic jurisdiction and such entity expressly assumes the Company's
obligations on all Debt Securities and under the Indenture,
(ii) immediately after giving effect to the transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing, and
(iii) the Company shall have delivered to the Debenture Trustee
certificates and opinions required by the Indenture. (Section 1101).
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indenture with respect to the Debt Securities of any series: (i) failure
to pay any interest on the Debt Securities of such series within 30 days
after the same becomes due and payable, provided that deferral of payment
during an Extension Period will not constitute an Event of Default; (ii)
failure to pay principal or premium, if any, on the Debt Securities of such
series when due and payable; (iii) failure to perform, or breach of, any
other covenant or warranty of the Company in the Indenture (other than a
covenant or warranty of the Company in the Indenture solely for the benefit
of one or more series of Debt Securities other than such series) for 60
days after written notice to the Company by the Debenture Trustee, or to
the Company and the Debenture Trustee by the Holders of at least 10% in
principal amount of the Debt Securities of such series outstanding under
the Indenture as provided in the Indenture; (iv) the entry by a court
having jurisdiction in the premises of (a) a decree or order for relief in
respect of the Company in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or (b) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition by one or more persons
other than the Company seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official for the Company or for any
substantial part of its property, or ordering the winding up or liquidation
of its affairs, and any such decree or order for relief or any such other
decree or order shall have remained unstayed and in effect for a period of
90 consecutive days; and (v) the commencement by the Company of a voluntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by it
to the entry of a decree or order for relief in respect of the Company in a
case or other similar proceeding or to the commencement of any bankruptcy
or insolvency case or proceeding against it under any applicable federal or
state law or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, or the
consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of any substantial part
of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the authorization of such action by
the Company's board of directors. (Section 801).
An Event of Default with respect to the Debt Securities of a
particular series may not necessarily constitute an Event of Default with
respect to Debt Securities of any other series issued under the Indenture.
If an Event of Default due to the default in payment of principal of
or interest on any series of Debt Securities or due to the default in the
performance or breach of any other covenant or warranty of the Company
applicable to the Debt Securities of such series but not applicable to all
series occurs and is continuing, then either the Debenture Trustee or the
Holders of 25% in principal amount of the outstanding Debt Securities of
such series may declare the principal of all of the Debt Securities of such
series and interest accrued thereon to be due and payable immediately
(subject to the subordination provisions of the Indenture). If an Event of
Default due to the default in the performance of any other covenants or
agreements in the Indenture applicable to all outstanding Debt Securities
or due to certain events of bankruptcy, insolvency or reorganization of the
Company has occurred and is continuing, either the Debenture Trustee or the
Holders of not less than 25% in principal amount of all outstanding Debt
Securities, considered as one class, and not the Holders of the Debt
Securities of any one of such series may make such declaration of
acceleration (subject to the subordination provisions of the Indenture).
If, in the event of an Event of Default, the Debenture Trustee fails,
or the Holders of not less than 25% of the aggregate principal amount of
the outstanding Debt Securities of such series fail, to declare the
principal due and payable, the holders of at least 25% in aggregate
liquidation amount of the related series of Preferred Securities shall have
such right. Except as set forth above, the existence of an Event of
Default does not entitle the holders of Preferred Securities to accelerate
the maturity thereof or declare amounts due and payable.
At any time after the declaration of acceleration with respect to the
Debt Securities of any series has been made and before a judgment or decree
for payment of the money due has been obtained, the Event or Events of
Default giving rise to such declaration of acceleration will, without
further act, be deemed to have been waived, and such declaration and its
consequences will, without further act, be deemed to have been rescinded
and annulled, if
(i) the Company has paid or deposited with the Debenture Trustee a
sum sufficient to pay
(a) all overdue interest on all Debt Securities of such
series;
(b) the principal of and premium, if any, on any Debt
Securities of such series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
prescribed therefor in such Debt Securities;
(c) interest upon overdue interest at the rate or rates
prescribed therefor in such Debt Securities, to the extent that payment of
such interest is lawful; and
(d) all amounts due to the Debenture Trustee under the
Indenture; and
(ii) any other Event or Events of Default with respect to Debt
Securities of such series, other than the nonpayment of the principal of
the Debt Securities of such series which has become due solely by such
declaration of acceleration, have been cured or waived as provided in the
Indenture. (Section 802).
Subject to the provisions of the Indenture relating to the duties of
the Debenture Trustee in case an Event of Default shall occur and be
continuing, the Debenture Trustee will be under no obligation to exercise
any of its rights or powers under the Indenture at the request or direction
of any of the Holders of the Subordinated Debentures, unless such Holders
shall have offered to the Debenture Trustee reasonable indemnity. (Section
903). If an Event of Default has occurred and is continuing in respect of
a series of Debt Securities, subject to such provisions for the
indemnification of the Debenture Trustee, the Holders of a majority in
principal amount of the outstanding Debt Securities of such series will
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising
any trust or power conferred on the Debenture Trustee, with respect to the
Debt Securities of such series; provided that if an Event of Default occurs
and is continuing with respect to more than one series of Debt Securities,
the Holders of a majority of the aggregate principal amount of the
outstanding Debt Securities of all such series, considered as one class,
will have the right to make such direction, and not the Holders of the Debt
Securities of any one of such series; and provided, further, that such
direction will not be in conflict with any rule of law or with the
Indenture. (Section 812).
No Holder of Debt Securities of any series will have any right to
institute any proceeding with respect to the Indenture, or for the
appointment of a receiver or a trustee, or for any other remedy thereunder,
unless (i) such Holder has previously given to the Debenture Trustee
written notice of a continuing Event of Default with respect to the Debt
Securities of such series, (ii) the Holders of not less than a majority in
aggregate principal amount of the outstanding Debt Securities of all series
in respect of which an Event of Default shall have occurred and be
continuing, considered as one class, have made written request to the
Debenture Trustee, and such Holder or Holders have offered reasonable
indemnity to the Debenture Trustee to institute such proceeding in respect
of such Event of Default in its own name as trustee and (iii) the Debenture
Trustee has failed to institute any proceeding, and has not received from
the Holders of a majority of the aggregate principal amount of the
outstanding Debt Securities of such series a direction inconsistent with
such request, within 60 days after such notice, request and offer. (Section
807). However, such limitations do not apply to a suit instituted by a
Holder of a Debt Security for the enforcement of payment of the principal
of or any premium or interest on such Debt Security on or after the
applicable due date specified in such Debt Security. (Section 808).
The Company will be required to furnish to the Debenture Trustee
annually a statement by an appropriate officer as to such officer's
knowledge of the Company's compliance with all conditions and covenants
under the Indenture, such compliance to be determined without regard to any
period of grace or requirement of notice under the Indenture. (Section
606).
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If an Event of Default has occurred and is continuing, then the
Holders of Preferred Securities would rely on the enforcement by the
Property Trustee or the Debenture Trustee, acting for the benefit of the
Property Trustee, of its rights as a holder of the Subordinated Debentures
against the Company. Notwithstanding the foregoing, if an Event of Default
has occurred and is continuing and such event is attributable to the
failure of the Company to pay principal of or interest on the Subordinated
Debentures on the date such interest or principal is otherwise payable (or
in the case of redemption, on the Redemption Date), then a Holder of
Preferred Securities may directly institute a proceeding against the
Company for enforcement of payment to such Holder of the principal of or
interest on the Subordinated Debentures having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such Holder
after the respective due dates specified in the Subordinated Debentures.
In connection with such an enforcement proceeding, the Company will be
subrogated to the rights of such Holder of Preferred Securities with
respect to payments on the Preferred Securities to the extent of any
payment made by the Company to such Holder of Preferred Securities in such
proceeding.
The Holders of the Preferred Securities would not be able to exercise
directly against the Company any rights other than those set forth in the
preceding paragraph available to the holders of the Subordinated Debentures
unless the Property Trustee or the Debenture Trustee, acting for the
benefit of the Property Trustee, fails to do so for 60 days. In such
event, to the fullest extent permitted by law, the holders of at least 25%
of the aggregate liquidation amount of the outstanding Preferred Securities
would have the right to directly institute proceedings for enforcement of
such rights.
MODIFICATION AND WAIVER
Without the consent of any Holder of Debt Securities, the Company and
the Debenture Trustee may enter into one or more supplemental indentures
for any of the following purposes: (i) to evidence the assumption by any
permitted successor to the Company of the covenants of the Company in the
Indenture and in the Debt Securities; or (ii) to add one or more covenants
of the Company or other provisions for the benefit of the Holders of
outstanding Debt Securities or to surrender any right or power conferred
upon the Company by the Indenture; or (iii) to add any additional Events of
Default with respect to outstanding Debt Securities; or (iv) to change or
eliminate any provision of the Indenture or to add any new provision to the
Indenture, provided that if such change, elimination or addition will
affect adversely the interests of the Holders of Debt Securities of any
series in any material respect, such change, elimination or addition will
become effective with respect to such series only (a) when the consent of
the Holders of Debt Securities of such series has been obtained in
accordance with the Indenture, or (b) when no Debt Securities of such
series remain outstanding under the Indenture; or (v) to provide collateral
security for all but not part of the Debt Securities; (vi) to establish the
form or terms of Debt Securities of any other series as permitted by the
Indenture; or (vii) to provide for the authentication and delivery of
bearer securities and coupons appertaining thereto representing interest,
if any, thereon and for the procedures for the registration, exchange and
replacement thereof and for the giving of notice to, and the solicitation
of the vote or consent of, the Holders thereof, and for any and all other
matters incidental thereto; or (viii) to evidence and provide for the
acceptance of appointment of a successor Debenture Trustee under the
Indenture with respect to the Debt Securities of one or more series and to
add to or change any of the provisions of the Indenture as shall be
necessary to provide for or to facilitate the administration of the trusts
under the Indenture by more than one trustee; or (ix) to provide for the
procedures required to permit the utilization of a noncertificated system
of registration for the Debt Securities of all or any series; or (x) to
change any place where (a) the principal of and premium, if any, and
interest, if any, on all or any series of Debt Securities shall be payable,
(b) all or any series of Debt Securities may be surrendered for
registration of transfer or exchange and (c) notices and demands to or upon
the Company in respect of Debt Securities and the Indenture may be served;
or (xi) to cure any ambiguity or inconsistency or to add or change any
other provisions with respect to matters and questions arising under the
Indenture, provided such changes or additions shall not adversely affect
the interests of the Holders of Debt Securities of any series in any
material respect. (Section 1201).
The Holders of at least a majority of the aggregate principal amount
of the outstanding Debt Securities of all series may waive compliance by
the Company with certain restrictive provisions of the Indenture. (Section
607). The Holders of not less than a majority in principal amount of the
outstanding Debt Securities of any series may waive any past default under
the Indenture with respect to such series, except a default in the payment
of principal, premium, or interest and certain covenants and provisions of
the Indenture that cannot be modified or be amended without the consent of
the Holder of each outstanding Debt Security of such series affected.
(Section 813).
Without limiting the generality of the foregoing, if the Trust
Indenture Act is amended after the date of the Indenture in such a way as
to require changes to the Indenture or the incorporation therein of
additional provisions or so as to permit changes to, or the elimination of,
provisions which, at the date of the Indenture or at any time thereafter,
were required by the Trust Indenture Act to be contained in the Indenture,
the Indenture will be deemed to have been amended so as to conform to such
amendment of the Trust Indenture Act or to effect such changes, additions
or elimination, and the Company and the Debenture Trustee may, without the
consent of any Holders, enter into one or more supplemental indentures to
evidence or effect such amendment. (Section 1201).
Except as provided above, the consent of the Holders of not less than
a majority of the aggregate principal amount of the outstanding Debt
Securities of all series, considered as one class, is required for the
purpose of adding any provisions to, or changing in any manner, or
eliminating any of the provisions of, the Indenture or modifying in any
manner the rights of the Holders of such Debt Securities under the
Indenture pursuant to one or more supplemental indentures; provided that if
less than all of the series of outstanding Debt Securities are affected
directly by a proposed supplemental indenture, then the consent only of the
Holders of a majority of the aggregate principal amount of outstanding Debt
Securities of all series so directly affected, considered as one class,
will be required; and provided further, that no such amendment or
modification may (i) change the stated maturity of the principal of, or any
installment of principal of or interest on, any Debt Security, or reduce
the principal amount thereof or the rate of interest thereon (or the amount
of any installment of interest thereon) or change the method of calculating
such rate or reduce any premium payable upon the redemption thereof, or
change the coin or currency (or other property) in which any Debt Security
or any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
stated maturity of any Debt Security (or, in the case of redemption, on or
after the Redemption Date) without, in any such case, the consent of the
Holder of such Debt Security, (ii) reduce the percentage in principal
amount of the outstanding Debt Security of any series, (or, if applicable,
in liquidation amount of Preferred Securities) the consent of the Holders
of which is required for any such supplemental indenture, or the consent of
the Holders of which is required for any waiver of compliance with any
provision of the Indenture or any default thereunder and its consequences,
or reduce the requirements for quorum or voting, without, in any such case,
the consent of the Holder of each outstanding Debt Security of such series,
or (iii) modify certain of the provisions of the Indenture relating to
supplemental indentures, waivers of certain covenants and waivers of past
defaults with respect to the Debt Security of any series, without the
consent of the Holder of each outstanding Debt Security affected thereby.
A supplemental indenture that changes or eliminates any covenant or other
provision of the Indenture which has expressly been included solely for the
benefit of one or more particular series of Debt Securities, or modifies
the rights of the Holders of Debt Securities of such series with respect to
such covenant or other provision, will be deemed not to affect the rights
under the Indenture of the Holders of the Debt Securities of any other
series. (Section 1202).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the outstanding Debt Securities have given
any request, demand, authorization, direction, notice, consent or waiver
under the Indenture, or whether a quorum is present at the meeting of the
Holders of Debt Securities, Debt Securities owned by the Company or any
other obligor upon the Debt Securities or any affiliate of the Company or
of such other obligor (unless the Company, such affiliate or such obligor
owns all Debt Securities outstanding under the Indenture, determined
without regard to this provision) shall be disregarded and deemed not to be
outstanding. (Section 101).
If the Company shall solicit from Holders any request, demand,
authorization, direction, notice, consent, election, waiver or other act,
the Company may, at its option, fix in advance a record date for the
determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other such act, but
the Company shall have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only
the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of the outstanding Debt Securities have authorized or
agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the outstanding
Debt Securities shall be computed as of the record date. Any request,
demand, authorization, direction, notice, consent, election, waiver or
other Act of a Holder shall bind every future Holder of the same Debt
Security and the Holder of every Debt Security issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect
of anything done, omitted or suffered to be done by the Debenture Trustee
or the Company in reliance thereon, whether or not notation of such action
is made upon such Debt Security. (Section 104).
RESIGNATION OF DEBENTURE TRUSTEE
The Debenture Trustee may resign at any time by giving written notice
thereof to the Company or may be removed at any time by the Holders of a
majority of the principal amount of all series of outstanding Debt
Securities of all series. No resignation or removal of the Debenture
Trustee and no appointment of a successor trustee will become effective
until the acceptance of appointment by a successor trustee in accordance
with the requirements of the Indenture. So long as no Event of Default or
event which, after notice or lapse of time, or both, would become an Event
of Default has occurred and is continuing and except with respect to a
Debenture Trustee appointed by the Holders, if the Company has delivered to
the Debenture Trustee a resolution of its board of directors appointing a
successor trustee and such successor has accepted such appointment in
accordance with the terms of the Indenture, the Debenture Trustee will be
deemed to have resigned and the successor will be deemed to have been
appointed as trustee in accordance with the Indenture. (Section 910).
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York.
CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee under the Indenture is Wilmington Trust Company.
In addition, Wilmington Trust Company acts as Property Trustee under the
Trust Agreement and as Guarantee Trustee under the Guarantee. See
"Description of the Preferred Securities -- Concerning the Property
Trustee."
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income
tax consequences relevant to the purchase, ownership and disposition of
Preferred Securities as of the date hereof and represents the opinion of
Reid & Priest LLP, New York, New York, special tax counsel to the Company,
insofar as it relates to matters of law or legal conclusions. Except where
noted, it deals only with Preferred Securities held as capital assets and
does not deal with special situations, such as those of dealers in
securities or currencies, financial institutions, life insurance companies,
persons holding Preferred Securities as a part of a hedging or conversion
transaction or a straddle, United States Holders (as defined under "--
United States Holders") whose "functional currency" is not the U.S. dollar,
or persons who are not United States Holders. In addition, this discussion
does not address the tax consequences to persons who purchase Preferred
Securities other than pursuant to their initial issuance and distribution.
Furthermore, the discussion below is based upon the provisions of the
Internal Revenue Code of 1986, as amended, and regulations, rulings and
judicial decisions thereunder as of the date hereof, and such authorities
may be repealed, revoked or modified at any time so as to result in United
States federal income tax consequences different from those discussed
below. These authorities are subject to various interpretations and it is
therefore possible that the United States federal income tax treatment of
the Preferred Securities may differ from the treatment described below.
PROSPECTIVE PURCHASERS OF PREFERRED SECURITIES, INCLUDING PERSONS WHO
ARE NOT UNITED STATES HOLDERS AND PERSONS WHO PURCHASE PREFERRED SECURITIES
IN THE SECONDARY MARKET, ARE ADVISED TO CONSULT WITH THEIR TAX ADVISORS AS
TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE,
OWNERSHIP AND DISPOSITION OF PREFERRED SECURITIES IN LIGHT OF THEIR
PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR
OTHER TAX LAWS.
UNITED STATES HOLDERS
As used herein, a "United States Holder" means a Holder that is a
citizen or resident of the United States, a corporation, partnership or
other entity created or organized in or under the laws of the United States
or any political subdivision thereof, or an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source.
CLASSIFICATION OF DELMARVA FINANCING
Reid & Priest LLP, special tax counsel to the Company and Delmarva
Financing, is of the opinion that, under current law and assuming full
compliance with the terms of the Indenture and the instruments establishing
Delmarva Financing (and certain other documents), Delmarva Financing will
be classified as a "grantor trust" for United States federal income tax
purposes and will not be classified as an association taxable as a
corporation. Each Holder will be treated as owning an undivided beneficial
interest in the Subordinated Debentures. Accordingly, each Holder will be
required to include in its gross income interest (in the form of OID)
accrued with respect to its allocable share of Subordinated Debentures as
described below. No amount included in income with respect to the
Preferred Securities will be eligible for the dividends received deduction.
Investors should be aware that the opinion of Reid & Priest LLP does not
address any other issue and is not binding on the Internal Revenue Service
or the courts.
CLASSIFICATION OF THE SUBORDINATED DEBENTURES
Based on the advice of its counsel, the Company believes and intends
to take the position that the Subordinated Debentures will constitute
indebtedness for United States federal income tax purposes. No assurance
can be given that such position will not be challenged by the Internal
Revenue Service or, if challenged, that such a challenge will not be
successful. By purchasing and accepting Preferred Securities, each Holder
covenants to treat the Subordinated Debentures as indebtedness and the
Preferred Securities as evidence of an indirect beneficial ownership in the
Subordinated Debentures. The remainder of this discussion assumes that the
Subordinated Debentures will be classified as indebtedness of the Company
for United States federal income tax purposes.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Bill, the revenue portion of President
Clinton's budget proposal, was released. The Revenue Bill, among other
things, generally would treat as equity an instrument, issued by a
corporation, that has a maximum term of more than 20 years and that is not
shown as indebtedness on the separate balance sheet of the issuer or, where
the instrument is issued to a related party (other than a corporation),
where the holder or some other related party issues a related instrument
that is not shown as indebtedness on the issuer's consolidated balance
sheet. The above-described provision was proposed to be effective
generally for instruments issued on or after December 7, 1995. If the
provision were to apply to the Subordinated Debentures, the Company would
be unable to deduct interest on the Subordinated Debentures. However, on
March 29, 1996, the Chairmen of the Senate Finance and House Ways and Means
Committees issued a joint statement to the effect that it was their
intention that the effective date of the President's legislative proposals,
if adopted, will be no earlier than the date of appropriate Congressional
action. There can be no assurance, however, that current or future
legislative proposals or final legislation will not affect the ability of
the Company to deduct interest on the Subordinated Debentures. If
legislation were enacted limiting, in whole or in part, the deductibility
by the Company of interest on the Subordinated Debentures for United States
federal income tax purposes, such enactment could give rise to a Tax Event
which would permit the Company to cause a redemption of the Preferred
Securities or a distribution of the Subordinated Debentures in liquidation
of Delmarva Financing, as described more fully under "Description of the
Preferred Securities -- Special Event Redemption or Distribution."
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE
DISCOUNT
Under the terms of the Subordinated Debentures, the Company has the
option to defer payments of interest for up to 20 consecutive quarterly
distribution payment periods and to pay as a lump sum at the end of such
period all of the interest that has accrued during such period. During any
such Extension Period, Distributions on the Preferred Securities also will
be deferred. Because of this option to extend the interest payment
periods, the Subordinated Debentures will be treated as having been issued
with OID for United States federal income tax purposes. As a result,
United States Holders will be required to accrue interest income (in the
form of OID) on an economic accrual basis even if they use the cash method
of tax accounting. In the event of an Extension Period, a United States
Holder will be required to continue to include OID in income
notwithstanding that Delmarva Financing will not make any Distribution on
the Preferred Securities during such Extension Period. As a result, any
Holder who disposes of Preferred Securities prior to the record date for
the payment of Distributions following such Extension Period will include
interest in gross income but will not receive any Distributions related
thereto from Delmarva Financing. The tax basis of a Preferred Security
will be increased by the amount of any OID that is included in income, and
will be decreased when and if Distributions are subsequently received from
Delmarva Financing by such Holders.
In addition, the amount of OID will be increased or decreased if the
issue price of the Subordinated Debentures (offering price of the Preferred
Securities at the time of the issuance) is less than or greater than their
stated principal amount. It is anticipated that the issue price of the
Subordinated Debentures will equal or exceed their stated principal amount.
In the event that the issue price of the Subordinated Debentures is less
than their stated principal amount, however, the Treasury Regulations may
be read to require a recalculation of the amount of OID for each period
that the Company does not exercise its right to extend the interest payment
period. This recalculation could result in minor adjustments to the amount
of OID taxable to the Holders for such period.
RECEIPT OF SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF
DELMARVA FINANCING
Under certain circumstances, as described under the caption
"Description of the Preferred Securities -- Special Event Redemption or
Distribution," Subordinated Debentures may be distributed to Holders of
Preferred Securities in exchange for the Preferred Securities and in
liquidation of Delmarva Financing. Under current law, for United States
federal income tax purposes, if Delmarva Financing is treated as a grantor
trust at the time of distribution, such a distribution would be treated as
a non-taxable event to each United States Holder, and each United States
Holder would receive an aggregate tax basis in the Subordinated Debentures
equal to such Holder's aggregate tax basis in its Preferred Securities. A
United States Holder's holding period for the Subordinated Debentures
received in liquidation of Delmarva Financing would include the period
during which such Holder held the Preferred Securities.
Under certain circumstances, as described under the caption
"Description of the Preferred Securities -- Redemption of Preferred
Securities," the Subordinated Debentures may be redeemed for cash and the
proceeds of such redemption distributed to Holders of Preferred Securities
in redemption of the Preferred Securities. Under current law, such a
redemption would, for United States federal income tax purposes, constitute
a taxable disposition of the Preferred Securities, and a Holder would
recognize gain or loss as if such Holder had sold such redeemed Preferred
Securities. See "-- Sale, Exchange and Redemption of the Preferred
Securities."
SALE, EXCHANGE AND REDEMPTION OF THE PREFERRED SECURITIES
Upon the sale, exchange or redemption of Preferred Securities, a
United States Holder will recognize gain or loss equal to the difference
between the amount realized upon the sale, exchange or redemption and such
Holder's adjusted tax basis in the Preferred Securities. A United States
Holder's adjusted tax basis will, in general, be the issue price of the
Preferred Securities, increased by the OID previously included in income by
the United States Holder and reduced by any Distributions on the Preferred
Securities. Such gain or loss will be capital gain or loss and will be
long-term capital gain or loss if at the time of sale, exchange or
redemption, the Preferred Securities have been held for more than one year.
Under current law, net capital gains of individuals are, under certain
circumstances, taxed at lower rates than items of ordinary income. The
deductibility of capital losses is subject to limitations.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Subject to the qualification discussed below, income on the Preferred
Securities will be reported to holders on Form 1099, which should be mailed
to such Holders by January 31, following each calendar year.
Delmarva Financing will be obligated to report annually to Cede & Co.,
as holder of record of the Preferred Securities, the OID related to the
Subordinated Debentures that accrued during the year. Delmarva Financing
currently intends to report such information on Form 1099 prior to January
31, following each calendar year. The Underwriters have indicated to
Delmarva Financing that, to the extent that they hold Preferred Securities
as nominees for beneficial holders, they currently expect to report the OID
that accrued during the calendar year on such Preferred Securities to such
beneficial holders on Forms 1099 by January 31, following each calendar
year. Under current law, holders of Preferred Securities who hold as
nominees for beneficial holders will not have any obligation to report
information regarding the beneficial holders to Delmarva Financing.
Delmarva Financing, moreover, will not have any obligation to report to
beneficial holders who are not also record holders. Thus, beneficial
holders of Preferred Securities who hold their Preferred Securities through
the Underwriters will receive Forms 1099 reflecting the income on their
Preferred Securities from such nominee holders rather than from Delmarva
Financing.
Payments made in respect of, and proceeds from the sale of, Preferred
Securities (or Subordinated Debentures distributed to holders of Preferred
Securities) may be subject to "backup" withholding tax of 31% unless the
holder complies with certain identification requirements or fails to report
in full dividend and interest income. Any withheld amounts will be allowed
as a refund or a credit against the holder's United States federal income
tax liability, provided the required information is provided to the
Internal Revenue Service.
These information reporting and backup withholding tax rules are
subject to temporary Treasury Regulations. Accordingly, the application of
such rules to the Preferred Securities could be changed.
VALIDITY OF THE SECURITIES
Certain matters of Delaware law relating to the validity of the
Preferred Securities, the enforceability of the Trust Agreement and the
formation of Delmarva Financing are being passed upon by Richards, Layton &
Finger, Special Delaware counsel for the Company and Delmarva Financing.
The validity of the Guarantee and the Subordinated Debentures will be
passed upon for the Company by Dale G. Stoodley, General Counsel for the
Company, and for the Underwriters by Reid & Priest LLP. Reid & Priest LLP
may rely as to matters of all laws, other than New York and federal laws,
upon the opinion of Mr. Stoodley. Mr. Stoodley may rely as to matters of
Virginia law upon the opinion of Peter F. Clark, Assistant General Counsel
for the Company, and as to matters of New York law upon the opinion of Reid
& Priest LLP. From time to time, Reid & Priest LLP has represented the
Company with respect to matters unrelated to the Preferred Securities.
R. Franklin Balotti, a director for the Company, is a member of the
law firm of Richards, Layton & Finger, the Special Delaware counsel.
However, Mr. Balotti is not directly involved with the transactions
described herein, other than in his role as a director for the Company.
As of June 20, 1996, Mr. Stoodley held, in the form of stock and share
equivalents in the Company's employee benefit plans, approximately 2,830
shares of the Company's Common Stock and had been granted 4,050 performance
shares as to which full rights will not vest, if at all, until a future
date. On such date, Mr. Stoodley's shares, including the performance
shares, had a fair market value of approximately $139,320.00. As of June
20, 1996, Mr. Clark held, in the form of stock and share equivalents in the
Company's employee benefit plans, approximately 1,293 shares of the
Company's Common Stock and had been granted 1,930 performance shares as to
which full rights will not vest, if at all, until a future date. On such
date, Mr. Clark's shares, including the performance shares, had a fair
market value of approximately $65,265.75.
EXPERTS
The consolidated financial statements incorporated by reference in
this Prospectus from the Company's Annual Report on Form 10-K for the year
ended December 31, 1995, have been audited by Coopers & Lybrand L.L.P.,
independent accountants, as indicated in their report with respect thereto,
and are incorporated by reference herein in reliance upon such report given
upon the authority of that firm as experts in accounting and auditing.
Dale G. Stoodley, General Counsel for the Company, has reviewed the
statements as to matters of law and legal conclusions under "Description of
the Preferred Securities," "Description of the Guarantee" and "Description
of the Subordinated Debentures" and in the Incorporated Documents and such
statements are included herein and therein upon his authority as an expert.
Statements as to United States federal income taxation under "Certain
United States Federal Income Tax Consequences" herein have been passed upon
for the Company and Delmarva Financing by Reid & Priest LLP, special tax
counsel to the Company.
UNDERWRITING
Under the terms and subject to the conditions contained in the
Underwriting Agreement dated the date hereof, each of the Underwriters
named below for whom Morgan Stanley & Co. Incorporated and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Smith Barney Inc., Dean Witter
Reynolds Inc., PaineWebber Incorporated and Prudential Securities
Incorporated are acting as representatives (the "Representatives") has
severally agreed to purchase, and Delmarva Financing has agreed to sell
to each of the Underwriters, severally, the respective number of
Preferred Securities set opposite its name below:
NUMBER OF
PREFERRED
UNDERWRITERS SECURITIES
------------ ----------
Morgan Stanley & Co. Incorporated . . .
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . .
Smith Barney Inc. . . . . . . . . . . .
Dean Witter Reynolds Inc. . . . . . . .
PaineWebber Incorporated . . . . . . .
Prudential Securities . . . . . . . . .
----------
Total . . . . . . . . . . . . . . .
==========
The Underwriting Agreement provides that the several obligations of
the Underwriters to pay for and accept delivery of the Preferred Securities
are subject to the approval of certain legal matters by their counsel and
to certain other conditions. In the Underwriting Agreement, the several
Underwriters have agreed, subject to the terms and conditions set forth
therein, to purchase all the Preferred Securities offered hereby if any of
the Preferred Securities are purchased. In the event of default by an
Underwriter, the Underwriting Agreement provides that, in certain
circumstances, the purchase commitments of the nondefaulting Underwriters
may be increased or Underwriting Agreement may be terminated.
The Underwriters initially propose to offer all or part of the
Preferred Securities directly to the public at the price to public set
forth on the cover page of this Prospectus, and all or part to certain
dealers at a price that represents a concession not in excess of $ per
Preferred Security. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $ per Preferred Security to
certain other dealers. After the initial offering of the Preferred
Securities, the offering price and other selling terms may from time to
time be varied by the Representatives.
Because the proceeds of the sale of the Preferred Securities will
ultimately be used to purchase the Subordinated Debentures, the
Underwriting Agreement provides that the Company will pay to the
Underwriters as compensation for their services, $ per Preferred Security
(or $ in the aggregate); provided that such compensation will be $ per
Preferred Security sold to certain institutions.
Prior to this offering, there has been no public market for the
Preferred Securities. Application has been made to list the Preferred
Securities on the NYSE. Listing is contingent upon meeting the
requirements of the NYSE, including those relating to distribution. In
order to meet one such requirement, the Underwriters have undertaken to
sell lots of 100 or more Preferred Securities to a minimum of 400
beneficial holders. Trading of the Preferred Securities on the NYSE is
expected to commence within a 30-day period after the date of this
Prospectus. The Underwriters have advised Delmarva Financing that they
intend to make a market in the Preferred Securities prior to the
commencement of trading on the NYSE. The Underwriters will have no
obligation to make a market in the Preferred Securities, however, and may
cease market making activities, if commenced, at any time.
Delmarva Financing and the Company have agreed to indemnify the
Underwriters against or contribute to payments that the Underwriters may be
required to make in respect of, certain liabilities, including liabilities
under the 1933 Act.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. Exhibits
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
--------- -----------------------
1-A - Form of Underwriting Agreement relating to the
Preferred Securities.*
3-A - A copy of the Company's Restated Certificate and
Articles of Incorporation effective as of April 12,
1990, (filed with Registration No. 33-50453).*
3-B - A copy of the Company's Certificate of Designation and
Articles of Amendment establishing the 7-3/4% Preferred
Stock-$25 Par (filed with Registration No. 33-50453).*
3-C - A copy of the Company's Certificate of Designation and
Articles of Amendment establishing the 6-3/4% Preferred
Stock (filed with Form 10-K for the year ended December
31, 1993).*
3-D - A copy of the Company's Certificate of Amendment of
Restated Certificate and Articles of Incorporation
filed with the Delaware Secretary of State, effective
as of June 7, 1996.*
3-E - A copy of the Company's Articles of Amendment of
Restated Certificate and Articles of Incorporation
filed with the Virginia State Corporation Commission,
effective as of June 7, 1996.*
3-F - A copy of the Company's Bylaws as amended February 29,
1996.*
4-A - Trust Agreement relating to the Preferred Securities.*
4-B - Form of Amended and Restated Trust Agreement relating
to the Preferred Securities.
4-C - Form of Indenture relating to the Subordinated
Debentures.
4-D - Form of Guarantee Agreement.
4-E - Form of Agreement as to Expenses and Liabilities
(Exhibit C to Exhibit 4-B).
4-F - Form of Officer's Certificate establishing Subordinated
Debentures (including the form of Subordinated
Debentures as Exhibit A).
4-G - Form of Preferred Securities (Exhibit D to Exhibit 4-
B).
5-A - Opinion of Dale G. Stoodley, General Counsel for the
Company.*
5-B - Opinion of Peter F. Clark, Assistant General Counsel
for the Company.*
5-C - Opinion of Richards, Layton & Finger, Special Delaware
Counsel to the Company and Delmarva Financing.*
8 - Opinion of Reid & Priest LLP, Special Tax Counsel to
the Company.*
12-A - Computation of Ratio of Earnings to Fixed Charges of
the Company (filed with Form 10-Q for the quarter ended
March 31, 1996).
12-B - Computation of Ratio of Earnings to Fixed Charges and
Preferred Dividends of the Company.*
23-A - Consent of Coopers & Lybrand LLP.*
23-B - Consents of Mr. Stoodley, Mr. Clark, Richards, Layton &
Finger and Reid & Priest LLP.*
24 - Power of Attorney.*
25-A - Statement of Eligibility and Qualification on Form T-1
of Wilmington Trust Company relating to Amended and
Restated Trust Agreement.*
25-B - Statement of Eligibility and Qualification on Form T-1
of Wilmington Trust Company relating to Indenture.*
25-C - Statement of Eligibility and Qualification on Form T-1
of Wilmington Trust Company relating to Guarantee
Agreement.
--------------------
* Previously filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Amendment to Registration Statement No. 333-07281 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Wilmington, State of Delaware, on September 16, 1996.
DELMARVA POWER & LIGHT COMPANY
(Registrant)
By /s/ B.S. Graham
-----------------------------
(B.S. Graham, Senior Vice
President, Treasurer and
Chief Financial 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 and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
H.E. Cosgrove Chairman of the Board,
President, Chief
Executive Officer
and Director
(Principal Executive
Officer)
By:/s/ B.S. Graham
-------------------
(B.S. Graham September 16, 1996
Attorney in Fact)
/s/ B.S. Graham
----------------------
(B.S. Graham) Senior Vice President, September 16, 1996
Treasurer and Chief
Financial Officer
(Principal Financial
Officer)
James P. Lavin
Comptroller and Chief
Accounting Officer
(Principal Accounting
Officer)
By:/s/ B.S. Graham
-------------------
(B.S. Graham September 16, 1996
Attorney in Fact)
<PAGE>
DIRECTORS
Michael G. Abercrombie, R. Franklin Balotti, Robert D. Burris, Audrey K.
Doberstein, Michael B. Emery, James H. Gilliam, Jr., James C. Johnson, III
By:/s/ B.S. Graham
-----------------------
(B.S. Graham September 16, 1996
Attorney in Fact)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Amendment to Registration Statement No. 333-07281-01 to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Wilmington, State of Delaware, on September 16, 1996.
DELMARVA FINANCING I
By: /s/ B.S. Graham
-------------------------------------
(B.S. Graham, Administrative Trustee)
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
4-B - Form of Amended and Restated Trust Agreement relating
to the Preferred Securities.
4-C - Form of Indenture relating to the Subordinated
Debentures.
4-D - Form of Guarantee Agreement.
4-E - Form of Agreement as to Expenses and Liabilities
(Exhibit C to Exhibit 4-B).
4-F - Form of Officer's Certificate establishing Subordinated
Debentures (including the form of Subordinated
Debentures as Exhibit A).
4-G - Form of Preferred Securities (Exhibit D to Exhibit 4-
B).
Exhibit 4-B
==========================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
between
DELMARVA POWER & LIGHT COMPANY, as Depositor
and
WILMINGTON TRUST COMPANY,
,
,
and
, as Trustees
Dated as of , 1996
DELMARVA POWER FINANCING I
==========================================================================
<PAGE>
Delmarva Power Financing I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
--------------- ---------------
Section 310(a)(1) . . . . . . . . . . . . . . . . . . 8.07
(a)(2) . . . . . . . . . . . . . . . . . . 8.07
(a)(3) . . . . . . . . . . . . . . . . . . 8.09
(a)(4) . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . 8.08
Section 311(a) . . . . . . . . . . . . . . . . . . 8.13
(b) . . . . . . . . . . . . . . . . . . 8.13
Section 312(a) . . . . . . . . . . . . . . . . . . 5.07
(b) . . . . . . . . . . . . . . . . . . 5.07
(c) . . . . . . . . . . . . . . . . . . 5.07
Section 313(a) . . . . . . . . . . . . . . . . . . 8.14(a)
(a)(4) . . . . . . . . . . . . . . . . . . 8.14(b)
(b) . . . . . . . . . . . . . . . . . . 8.14(b)
(c) . . . . . . . . . . . . . . . . . . 8.14(a)
(d) . . . . . . . . . . . . . . . . . . 8.14(a), 8.14(b)
Section 314(a) . . . . . . . . . . . . . . . . . . 8.15
(a)(4) . . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . 8.16
(d) . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . 1.01
Section 315(a) . . . . . . . . . . . . . . . . . . 8.01
(b) . . . . . . . . . . . . . . . . . . 8.02
(c) . . . . . . . . . . . . . . . . . . 8.01(a)
(d) . . . . . . . . . . . . . . . . . . 8.01, 8.03
(e) . . . . . . . . . . . . . . . . . . Not Applicable
Section 316(a) . . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(A) . . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(B) . . . . . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . Not Applicable
Section 317(a)(1) . . . . . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . 5.09
Section 318(a) . . . . . . . . . . . . . . . . . . 10.10
--------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
<PAGE>
TABLE OF CONTENTS
ARTICLE I.
Defined Terms
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II.
Establishment of the Trust; Issuance of
Trust Securities; Rights of Securityholders
Section 2.01. Name . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.02. Office of the Property Trustee; Principal Place of
Business . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.03. Initial Contribution of Trust Property; Initial
Ownership; Organizational Expenses . . . . . . . . . . . 11
Section 2.04. Issuance of the Preferred Securities . . . . . . . . . . 11
Section 2.05. Subscription and Purchase of Debentures; Issuance of the
Common Securities . . . . . . . . . . . . . . . . . . . 11
Section 2.06. Declaration of Trust; Appointment of Additional
Administrative Trustees . . . . . . . . . . . . . . . . 12
Section 2.07. Authorization to Enter into Certain Transactions . . . . 12
Section 2.08. Assets of Trust . . . . . . . . . . . . . . . . . . . . 16
Section 2.09. Title to Trust Property . . . . . . . . . . . . . . . . 16
Section 2.10. Rights of Securityholders . . . . . . . . . . . . . . . 16
ARTICLE III.
Payment Account
Section 3.01. Payment Account . . . . . . . . . . . . . . . . . . . . 16
ARTICLE IV.
Distributions; Redemption
Section 4.01. Distributions . . . . . . . . . . . . . . . . . . . . . 17
Section 4.02. Redemption . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.03. Subordination of Common Securities . . . . . . . . . . . 19
Section 4.04. Payment Procedures . . . . . . . . . . . . . . . . . . . 20
Section 4.05. Tax Returns and Reports . . . . . . . . . . . . . . . . 20
Section 4.06. Payments under Subordinated Indenture . . . . . . . . . 20
ARTICLE V.
Trust Securities Certificates
Section 5.01. The Trust Securities Certificates . . . . . . . . . . . 21
Section 5.02. Ownership of Common Securities by Depositor . . . . . . 21
Section 5.03. Registration of Transfer and Exchange of Preferred
Securities Certificates . . . . . . . . . . . . . . . . 21
Section 5.04. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.05. Cancellation by Registrar. . . . . . . . . . . . . . . . 23
Section 5.06. Persons Deemed Securityholders . . . . . . . . . . . . . 23
Section 5.07. Lists of Holders. . . . . . . . . . . . . . . . . . . . 23
Section 5.08. Maintenance of Office or Agency . . . . . . . . . . . . 23
Section 5.09. Appointment of Paying Agent . . . . . . . . . . . . . . 23
Section 5.10. Book-Entry System . . . . . . . . . . . . . . . . . . . 24
ARTICLE VI.
Acts of Securityholders; Meetings; Voting
Section 6.01. Limitations on Voting Rights . . . . . . . . . . . . . . 25
Section 6.02. Notice of Meetings . . . . . . . . . . . . . . . . . . . 25
Section 6.03. Meetings of Holders of Preferred Securities . . . . . . 26
Section 6.04. Voting Rights . . . . . . . . . . . . . . . . . . . . . 26
Section 6.05. Proxies, etc. . . . . . . . . . . . . . . . . . . . . . 26
Section 6.06. Securityholder Action by Written Consent . . . . . . . . 26
Section 6.07. Record Date for Voting . . . . . . . . . . . . . . . . . 27
Section 6.08. Acts of Securityholders . . . . . . . . . . . . . . . . 27
Section 6.09. Inspection of Records . . . . . . . . . . . . . . . . . 28
ARTICLE VII.
Representations and Warranties
of the Property Trustee
Section 7.01. Property Trustee . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VIII.
The Trustees
Section 8.01. Certain Duties and Responsibilities . . . . . . . . . . 29
Section 8.02. Certain Notices . . . . . . . . . . . . . . . . . . . . 31
Section 8.03. Certain Rights of Property Trustee . . . . . . . . . . . 31
Section 8.04. Not Responsible for Recitals or Issuance of Securities . 34
Section 8.05. May Hold Securities . . . . . . . . . . . . . . . . . . 34
Section 8.06. Compensation; Fees; Indemnity. . . . . . . . . . . . . . 34
Section 8.07. Certain Trustees Required; Eligibility . . . . . . . . . 35
Section 8.09. Co-Trustees and Separate Trustee . . . . . . . . . . . . 36
Section 8.10. Resignation and Removal; Appointment of Successor . . . 37
Section 8.11. Acceptance of Appointment by Successor . . . . . . . . . 38
Section 8.12. Merger, Conversion, Consolidation or Succession
to Business . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.13. Preferential Collection of Claims Against
Depositor or Trust . . . . . . . . . . . . . . . . . . . 39
Section 8.14. Reports by Property Trustee . . . . . . . . . . . . . . 39
Section 8.15. Reports to the Property Trustee . . . . . . . . . . . . 39
Section 8.16. Evidence of Compliance With Conditions Precedent . . . . 40
Section 8.17. Number of Trustees. . . . . . . . . . . . . . . . . . . 40
Section 8.18. Delegation of Power. . . . . . . . . . . . . . . . . . . 40
Section 8.19. Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE IX.
Termination and Liquidation
Section 9.01. Termination Upon Expiration Date . . . . . . . . . . . . 42
Section 9.02. Early Termination . . . . . . . . . . . . . . . . . . . 42
Section 9.03. Termination . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.04. Liquidation . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.05. Mergers, Consolidations, Amalgamations or Replacements of
the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE X.
Miscellaneous Provisions
Section 10.01. Guarantee by the Depositor and Assumption of
Obligations . . . . . . . . . . . . . . . . . . . . . . 45
Section 10.02. Limitation of Rights of Securityholders . . . . . . . . 45
Section 10.03. Amendment . . . . . . . . . . . . . . . . . . . . . . . 46
Section 10.04. Separability . . . . . . . . . . . . . . . . . . . . . 47
Section 10.05. Governing Law . . . . . . . . . . . . . . . . . . . . . 47
Section 10.06. Successors . . . . . . . . . . . . . . . . . . . . . . 47
Section 10.07. Headings . . . . . . . . . . . . . . . . . . . . . . . 47
Section 10.08. Notice and Demand . . . . . . . . . . . . . . . . . . . 47
Section 10.09. Agreement Not to Petition . . . . . . . . . . . . . . . 48
Section 10.10. Conflict with Trust Indenture Act . . . . . . . . . . . 48
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of ,
1996, between (i) Delmarva Power & Light Company, a Delaware and Virginia
corporation (the "Depositor"), (ii) Wilmington Trust Company, a banking
corporation duly organized and existing under the laws of Delaware, as
trustee (the "Property Trustee") and (iii) ,
and , each an individual, as trustee, and
each of whose address is c/o Delmarva Power & Light Company, 800 King
Street, Wilmington, Delaware 19899 (each, an "Administrative Trustee" and,
collectively, the "Administrative Trustees") (the Property Trustee and the
Administrative Trustees being hereinafter referred to collectively as the
"Trustees").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Depositor, the Property Trustee and
, as Administrative Trustee, have heretofore duly declared and
established a business trust pursuant to the Delaware Business Trust Act by
the entering into of that certain Trust Agreement, dated as of
, 1996 (the "Original Trust Agreement"), and by the execution by the
Property Trustee and , as Administrative Trustee
and filing with the Secretary of State of the State of Delaware of the
Certificate of Trust, dated , 1996 (the "Certificate of
Trust"), a copy of which is attached as Exhibit A; and
WHEREAS, the Depositor, the Property Trustee and
, as Administrative Trustee, desire to amend and restate the Original
Trust Agreement in its entirety as set forth herein to provide for, among
other things, (i) the acquisition by the Trust from the Depositor of all of
the right, title and interest in the Debentures, (ii) the issuance of the
Common Securities by the Trust to the Depositor, (iii) the issuance of the
Preferred Securities by the Trust and (iv) the appointment of additional
Administrative Trustees of the Trust;
NOW THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, each party, for the benefit of
the other parties and for the benefit of the Securityholders, hereby amends
and restates the Original Trust Agreement in its entirety and agrees as
follows:
ARTICLE I.
DEFINED TERMS
SECTION 1.01. DEFINITIONS. For all purposes of this Trust
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well
as the singular;
(b) all other terms used herein that are defined in the
Trust Indenture Act, either directly or by reference therein,
have the meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to
an "Article" or a "Section" refers to an Article or a Section, as
the case may be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole
and not to any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Additional Amount" means, with respect to Trust Securities of a
given Liquidation Amount and for a given period, the amount of Additional
Interest (as defined in the Subordinated Indenture) paid by the Depositor
on a Like Amount of Debentures for such period.
"Administrative Trustee" means each of the individuals identified
as an "Administrative Trustee" in the preamble to this Trust Agreement,
solely in their capacities as Administrative Trustees of the Trust created
hereunder and not in their individual capacities, or any successor trustee
appointed as herein provided.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Bankruptcy Event" means, with respect to any Person:
(i) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or in
respect of such Person under Federal bankruptcy law or any other
applicable Federal or State law, or appointing a receiver, liqui-
dator, assignee, trustee sequestrator or other similar official
of such Person or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect
for a period of 60 consecutive days; or
(ii) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or of the consent by it to
the institution of bankruptcy or insolvency proceedings against
it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under Federal bankruptcy law or
any other applicable Federal or State law, or the consent by it
to the filing of such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator or similar
official of such Person or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to
pay its debts generally as they become due.
"Bankruptcy Laws" has the meaning specified in Section 10.09.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly
adopted by the Depositor's Board of Directors or a duly authorized
committee thereof and to be in full force and effect on the date of such
certification, and delivered to the appropriate Trustee.
"Business Day" means a day other than (a) a Saturday or a Sunday,
(b) a day on which banks in New York, New York are authorized or obligated
by law or executive order to remain closed and (c) a day on which either
the Corporate Trust Office or the Debenture Trustee's principal corporate
trust office is closed for business.
"Certificate of Trust" has the meaning specified in the preamble
to this Trust Agreement.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Closing Date" means the date of delivery of this Trust
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at
any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Common Security" means an undivided beneficial interest in the
assets of the Trust having a Liquidation Amount of $25 and having the
rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as
Exhibit B.
"Corporate Trust Office" means the principal corporate trust
office of the Property Trustee located in Wilmington, Delaware.
"Covered Person" means: (a) any officer, director, shareholder,
partner, beneficial owner, member, representative, employee or agent of the
Trust or the Trust's Affiliates; and (b) any Securityholder.
"Debenture Event of Default" means an "Event of Default" as
defined in the Subordinated Indenture.
"Debenture Issuer" means Delmarva Power & Light Company, a
Delaware and Virginia corporation, in its capacity as issuer of the
Debentures.
"Debenture Redemption Date" means "Redemption Date" as defined in
the Subordinated Indenture.
"Debenture Trustee" means Wilmington Trust Company, as trustee
under the Subordinated Indenture.
"Debentures" means the $ aggregate principal
amount of the Debenture Issuer's % Junior Subordinated Debentures,
Series , Due , issued pursuant to the Subordinated Indenture.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
-- ---
time to time.
"Delaware Trustee" has the meaning specified in Section 8.07(c).
"Depositor" has the meaning specified in the preamble to this
Trust Agreement.
"Distribution Date" has the meaning specified in Section 4.01(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
"Early Termination Event" has the meaning specified in Section
9.02.
"Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default; or
(ii) default by the Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such default
for a period of 30 days; or
(iii) default by the Trust in the payment of any Redemption
Price when it becomes due and payable; or
(iv) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this
Trust Agreement (other than a covenant or warranty a default in
whose performance or breach is specifically dealt with in clause
(ii) or (iii), above) and continuation of such default or breach
for a period of 60 days after there has been given, by registered
or certified mail, to the Property Trustee by the Holders of at
least 10% in Liquidation Amount of the Outstanding Preferred
Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(v) the occurrence of a Bankruptcy Event with respect to the
Trust.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expense Agreement" means the Agreement as to Expenses and
Liabilities between the Depositor and the Trust, substantially in the form
attached as Exhibit C, as amended from time to time.
"Expiration Date" means December 31, 2041.
"Guarantee" means the Guarantee Agreement executed and delivered
by the Depositor and Wilmington Trust Company, a Delaware banking
corporation, as trustee, contemporaneously with the execution and delivery
of this Trust Agreement, for the benefit of the Holders of the Preferred
Securities, as amended from time to time.
"Holder" has the meaning specified in the definition of
"Securityholder."
"Indemnified Person" means any Trustee, any Affiliate of any
Trustee, any officer, director, shareholder, member, partner, employee,
representative or agent of any Trustee, or any employee or agent of the
Trust or its Affiliates.
"Investment Company Act" means the Investment Company Act of
1940, as amended.
"Investment Company Event" means the occurrence of a change in
law or regulation or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or
regulatory authority to the effect that the Trust is or will be considered
an "investment company" that is required to be registered under the
Investment Company Act, which change in law becomes effective on or after
the date of original issuance of the Preferred Securities.
"Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation, assignment,
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever.
"Like Amount" means, as the context requires, (i) Trust
Securities having a Liquidation Amount equal to the principal amount of
Debentures at any time to be repaid, whether at stated maturity or upon
maturity by earlier acceleration, redemption or otherwise and (ii)
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities with respect to which such Debentures are to be
distributed.
"Liquidation Amount" means the stated amount of $25 per Trust
Security.
"Liquidation Date" means the date on which Debentures are to be
distributed to Securityholders in connection with a termination and
liquidation of the Trust pursuant to Section 9.04(a).
"Liquidation Distribution" has the meaning specified in
Section 9.04(e).
"No Recognition Opinion" means an opinion of nationally
recognized independent tax counsel experienced in such matters, which
opinion may rely on any then applicable published revenue rulings of the
Internal Revenue Service, to the effect that the Holders of the Preferred
Securities will not recognize any gain or loss for United States
federal income tax purposes as a result of the termination of the Trust and
distribution of the Debentures.
"Officer's Certificate" means a certificate signed by the
Chairman of the Board, the President, a Vice President, the Treasurer or an
Assistant Treasurer of the Depositor, and delivered to the appropriate
Trustee. Any Officer's Certificate delivered with respect to compliance
with a condition or covenant provided for in this Trust Agreement shall
include:
(a) a statement that the officer signing the Officer's
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by such officer in rendering the Officer's
Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Trust, the Property Trustee or the Depositor, but not an
employee of the Trust, the Property Trustee or the Depositor, and who shall
be reasonably acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.
"Outstanding," when used with respect to Preferred Securities,
means, as of the date of determination, all Preferred Securities
theretofore delivered under this Trust Agreement, except:
(i) Preferred Securities theretofore canceled by the
Administrative Trustees or delivered to the Administrative
Trustees for cancellation;
(ii) Preferred Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with the
Property Trustee or any Paying Agent for the Holders of such
Preferred Securities; provided, however, that, if such Preferred
Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Trust Agreement; and
(iii) Preferred Securities in exchange for or in lieu of which
other Preferred Securities have been delivered pursuant to this
Trust Agreement, including pursuant to Sections 5.03 or 5.04;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, Preferred Securities owned by the Depositor, any Trustee or any
Affiliate of the Depositor or any Trustee shall be disregarded and deemed
not to be Outstanding, except that (a) in determining whether any Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Preferred Securities which such
Trustee knows to be so owned shall be so disregarded and (b) the foregoing
shall not apply at any time when all of the outstanding Preferred
Securities are owned by the Depositor, one or more of the Trustees and/or
any such Affiliate. Preferred Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to
the satisfaction of the Administrative Trustees the pledgee's right so to
act with respect to such Preferred Securities and that the pledgee is not
the Depositor or any Affiliate of the Depositor.
"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.09 and initially shall be Wilmington Trust
Company.
"Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee at Wilmington
Trust Company, or such other banking institution as the Depositor shall
select, for the benefit of the Securityholders in which all amounts paid in
respect of the Debentures will be held and from which the Paying Agent,
pursuant to Section 5.09, shall make payments to the Securityholders in
accordance with Sections 4.01 and 4.02.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in
the assets of the Trust designated as a "__% Cumulative Trust Preferred
Capital Security" having a Liquidation Amount of $25 and having rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as
Exhibit D.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust
Agreement solely in its capacity as Property Trustee of the Trust formed
and continued hereunder and not in its individual capacity, or its
successor in interest in such capacity, or any successor trustee appointed
as herein provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided, however, that each Debenture Redemption Date and
Maturity (as defined in the Subordinated Indenture) of the Debentures shall
be a Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Redemption Date of
any Trust Security, the Liquidation Amount of such Trust Security, plus
accumulated and unpaid Distributions thereon to the Redemption Date.
"Registrar" shall mean the registrar for the Preferred Securities
appointed by the Trust and shall be initially Wilmington Trust Company.
"Responsible Officer," when used with respect to the Property
Trustee means an officer of the Property Trustee assigned by the Property
Trustee to administer its corporate trust matters.
"Securities Depository" shall be The Depository Trust Company, or
a successor thereto.
"Securities Register" shall mean the Securities Register
described in Section 5.03.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such
Person shall be deemed to be a beneficial owner within the meaning of the
Delaware Business Trust Act.
"Special Event" means either a Tax Event or an Investment Company
Event.
"Subordinated Indenture" means the Indenture, dated as of
, 1996, between the Depositor and the Debenture Trustee, as amended or
supplemented from time to time.
"Tax Event" means the receipt by the Trust of an Opinion of
Counsel 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 affecting
taxation, or as a result of any official administrative or judicial
pronouncement or decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement
or decision is announced on or after the date of original issuance of the
Preferred Securities under this Trust Agreement, there is more than an
insubstantial risk that at such time or within 90 days of the date thereof
(i) the Trust is, or will be, subject to United States federal income tax
with respect to income received or accrued on the Debentures, (ii) interest
payable by the Depositor on the Debentures is not, or will not be, fully
deductible by the Depositor for United States federal income tax purposes,
or (iii) the Trust is, or will be, subject to more than a de minimis amount
of other taxes, duties or other governmental charges.
"Transfer Agent" shall mean one or more transfer agents for the
Preferred Securities appointed by the Administrative Trustees on behalf of
the Trust and shall be initially Wilmington Trust Company.
"Trust" means the Delaware business trust created by the Original
Trust Agreement and continued hereby and identified on the cover page to
this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in
accordance with the applicable provisions hereof, including all exhibits
hereto and the provisions of the Trust Indenture Act that are deemed to be
a part of and govern this Amended and Restated Trust Agreement and any such
modification, amendment or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (i) the Debentures, (ii) any cash on
deposit in, or owing to, the Payment Account and (iii) all proceeds and
rights in respect of the foregoing and any other property and assets for
the time being held by the Property Trustee pursuant to the trusts of this
Trust Agreement.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities Certificates.
"Underwriting Agreement" means the Underwriting Agreement, dated
as of , 1996, among the Trust, the Depositor and the
underwriters named therein.
ARTICLE II.
ESTABLISHMENT OF THE TRUST; ISSUANCE OF
TRUST SECURITIES; RIGHTS OF SECURITYHOLDERS
SECTION 2.01. NAME. The Trust created hereby shall be known as
"Delmarva Power Financing I," in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
SECTION 2.02. OFFICE OF THE PROPERTY TRUSTEE; PRINCIPAL PLACE OF
BUSINESS. The office of the Property Trustee in the State of Delaware is
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890,
or at such other address in Delaware as the Property Trustee may designate
by written notice to the Securityholders and the Depositor. The principal
place of business of the Trust is c/o Delmarva Power & Light Company, 800
King Street, Wilmington, Delaware 19899.
SECTION 2.03. INITIAL CONTRIBUTION OF TRUST PROPERTY; INITIAL
OWNERSHIP; ORGANIZATIONAL EXPENSES. The Property Trustee acknowledges
receipt in trust from the Depositor in connection with the Original Trust
Agreement of the sum of $10, which constituted the initial Trust Property.
Upon the creation of the Trust by such contribution and until the issuance
of the Trust Securities, and at any time during which no Trust Securities
are outstanding, the Depositor shall be the sole beneficial owner of the
Trust. The Depositor shall pay organizational expenses of the Trust as
they arise or shall, upon request of any Trustee, promptly reimburse such
Trustee for any such expenses paid by such Trustee. The Depositor shall
make no claim upon the Trust Property for the payment of such expenses.
SECTION 2.04. ISSUANCE OF THE PREFERRED SECURITIES. The
Depositor and an Administrative Trustee, on behalf of the Trust, executed
and delivered the Underwriting Agreement. Contemporaneously with the
execution and delivery of this Trust Agreement, one of the Administrative
Trustees, on behalf of the Trust in accordance with Section 5.01, executed
manually and delivered a Preferred Securities Certificate, registered in
the name of the nominee of the Securities Depository, evidencing [
] Preferred Securities having an aggregate Liquidation Amount of
$ , against receipt of the purchase price of such Preferred
Securities of $ , which amount such Administrative Trustee shall
promptly deliver to the Property Trustee.
SECTION 2.05. SUBSCRIPTION AND PURCHASE OF DEBENTURES; ISSUANCE
OF THE COMMON SECURITIES. Contemporaneously with the execution and
delivery of this Trust Agreement, the Administrative Trustees, on behalf of
the Trust, shall subscribe to and purchase from the Depositor Debentures,
registered in the name of the Property Trustee and in an aggregate
principal amount of $ , and, in satisfaction of the purchase
price for such Debentures, (x) one of the Administrative Trustees, on
behalf of the Trust, shall execute and deliver to the Depositor Common
Securities Certificates, registered in the name of the Depositor,
evidencing [ ] Common Securities having an aggregate
Liquidation Amount of $ , and (y) the Property Trustee, on
behalf of the Trust, shall deliver to the Depositor the sum of $
, representing the proceeds from the sale of the Preferred Securities
pursuant to the Underwriting Agreement.
SECTION 2.06. DECLARATION OF TRUST; APPOINTMENT OF ADDITIONAL
ADMINISTRATIVE TRUSTEES. The exclusive purposes and functions of the Trust
are (i) to issue Trust Securities and invest the proceeds thereof in
Debentures, and (ii) to receive payments to be made with respect to the
Debentures and disburse such payments in accordance with the terms hereof,
and (iii) to engage in those activities necessary, convenient or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the
Trust, to have all the rights, powers and duties to the extent set forth
herein. The Property Trustee hereby declares that it will hold the Trust
Property in trust upon and subject to the conditions set forth herein for
the benefit of the Securityholders. The Trustees shall have all rights,
powers and duties set forth herein and in accordance with applicable law
with respect to accomplishing the purposes of the Trust.
SECTION 2.07. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section 2.07 and Article VIII and in accordance with
the following provisions (i) and (ii), the Trustees shall have the
authority to enter into all transactions and agreements determined by the
Trustees to be appropriate in exercising the authority, express or implied,
otherwise granted to the Trustees under this Trust Agreement, and to
perform all acts in furtherance thereof, including without limitation, the
following:
(i) As among the Trustees, the Administrative Trustees, acting singly
or jointly, shall have the power, duty and authority to act on behalf of
the Trust with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) without the consent of any Person, the causing of the
Trust to enter into and to execute, deliver and perform on behalf
of the Trust, the Expense Agreement, and such agreements or other
documents as may be necessary or desirable in connection with the
consummation of the Underwriting Agreement;
(C) the qualification of the Trust to do business in any
jurisdiction as may be necessary or desirable;
(D) the collection of interest, principal and any other
payments made in respect of the Debentures in the Payment
Account;
(E) the registration of the Preferred Securities under the
Securities Act of 1933, as amended, and under state securities or
blue sky laws, and the qualification of this Trust Agreement as a
trust indenture under the Trust Indenture Act;
(F) the listing of the Preferred Securities upon such
securities exchange or exchanges as shall be determined by the
Depositor and the registration of the Preferred Securities under
the Exchange Act, and the preparation and filing of all periodic
and other reports and other documents pursuant to the foregoing;
(G) the appointments of a Paying Agent [subject to Section
5.09], a Transfer Agent and a Registrar in accordance with this
Trust Agreement;
(H) the registration of transfers of the Trust Securities in
accordance with this Trust Agreement; and
(I) the taking of any action incidental to the foregoing as
the Administrative Trustees may from time to time determine is
necessary or advisable to protect and conserve the Trust Property
for the benefit of the Securityholders (without consideration of
the effect of any such action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect to the
following ministerial matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the deposit of interest, principal and any other payments
made in respect of the Debentures in the Payment Account;
(D) the distribution of amounts owed to the Securityholders in
respect of the Trust Securities in accordance with the terms of
this Trust Agreement;
(E) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the
Securityholders in accordance with the terms of this Trust
Agreement;
(F) the distribution of the Trust Property in accordance with
the terms of this Trust Agreement;
(G) as provided in this Trust Agreement, the winding up of the
affairs of and liquidation of the Trust and the execution of the
certificate of cancellation to be prepared and filed by the
Administrative Trustees with the Secretary of State of the State
of Delaware; and
(H) the taking of any ministerial action incidental to the
foregoing as the Property Trustee may from time to time determine
is necessary or advisable to protect and conserve the Trust
Property for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder).
Subject to this Section 2.07(a)(ii), the Property Trustee shall have none
of the duties, liabilities, powers or authority of the Administrative
Trustees set forth in Section 2.07(a)(i) or the Depositor set forth in
Section 2.07(c). The Property Trustee shall have the power and authority
to exercise all of the rights, powers and privileges of a holder of
Debentures under the Subordinated Indenture and, if an Event of Default
occurs and is continuing, the Property Trustee may, for the benefit of
Holders of the Trust Securities, in its discretion proceed to protect and
enforce its rights as holder of the Debentures subject to the rights of the
Holders pursuant to the terms of this Trust Agreement.
(b) The Trust (or the Trustees acting on behalf of the Trust)
shall not undertake any business, activities or transaction except as
expressly provided herein or contemplated hereby. In particular, the
Trustees shall not (i) acquire any investments or engage in any activities
not authorized by this Trust Agreement, (ii) sell, assign, transfer,
exchange, pledge, set-off or otherwise dispose of any of the Trust Property
or interests therein, including to Securityholders, except as expressly
provided herein, (iii) take any action that would cause the Trust to fail
or cease to qualify as a "grantor trust" for United States federal income
tax purposes, (iv) incur any indebtedness for borrowed money or (v) take or
consent to any action that would result in the placement of a Lien on any
of the Trust Property. The Trustees shall defend all claims and demands of
all Persons at any time claiming any Lien on any of the Trust Property
adverse to the interest of the Trust or the Securityholders in their
capacity as Securityholders.
(c) In connection with the issuance of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust
with respect to, or effect on behalf of the Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the
date of this Trust Agreement are hereby ratified and confirmed in all
respects):
(i) to prepare for filing by the Trust with the Commission and
to execute a registration statement on Form S-3 in relation to
the Preferred Securities, including any amendments thereto;
(ii) to determine the states in which to take appropriate
action to qualify or register for sale all or part of the
Preferred Securities and to do any and all such acts, other than
actions which must be taken by or on behalf of the Trust, and
advise the Trustees of actions they must take on behalf of the
Trust, and prepare for execution and filing any documents to be
executed and filed by the Trust or on behalf of the Trust, as the
Depositor deems necessary or advisable in order to comply with
the applicable laws of any such states;
(iii) to prepare for filing by the Trust an application to the
New York Stock Exchange, any other national stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any
Preferred Securities and to file or cause the Administrative
Trustees to file thereafter with such exchange such notifications
and documents as may be necessary from time to time to maintain
such listing;
(iv) to prepare for filing by the Trust with the Commission and
to execute a registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12(b) of
the Exchange Act, including any amendments thereto;
(v) to execute and deliver on behalf of the Trust the
Underwriting Agreement and such other agreements as may be
necessary or desirable in connection with the consummation
thereof;
(vi) to select the investment banker or bankers to act as
underwriters with respect to the offer and sale by the Trust of
Preferred Securities and negotiate the terms of an Underwriting
Agreement and pricing agreement providing for such offer; and
(vii) to take any other actions necessary or desirable to carry
out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs
of the Trust and to operate the Trust so that the Trust will not be deemed
to be an "investment company" required to be registered under the
Investment Company Act of 1940, as amended, or classified other than as a
"grantor trust" for United States federal income tax purposes and so that
the Debentures will be treated as indebtedness of the Depositor for United
States federal income tax purposes. In this connection, subject to the
provisions of Section 10.03, the Depositor and the Administrative Trustees
are authorized to take any action, not inconsistent with applicable law or
this Trust Agreement, that each of the Depositor and the Administrative
Trustees determines in its discretion to be necessary or desirable for such
purposes, as long as such action does not materially and adversely affect
the interests of the Holders of the Preferred Securities.
(e) Anything in this Trust Agreement to the contrary
notwithstanding, 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 Property Trustee or the Administrative Trustees
set forth herein. The Delaware Trustee shall be one of the Trustees of the
Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act.
SECTION 2.08. ASSETS OF TRUST. The assets of the Trust shall
consist of the Trust Property.
SECTION 2.09. TITLE TO TRUST PROPERTY. Legal title to all Trust
Property shall be vested at all times in the Property Trustee (in its
capacity as such) and shall be held and administered by the Property
Trustee for the benefit of the Securityholders in accordance with this
Trust Agreement.
SECTION 2.10. RIGHTS OF SECURITYHOLDERS. The legal title to the
Trust Property is vested exclusively in the Property Trustee (in its
capacity as such) in accordance with Section 2.09, and the Securityholders
shall not have any right or title therein other than an undivided
beneficial interest in the assets of the Trust conferred by their Trust
Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described
below. The Trust Securities shall be personal property giving only the
rights specifically set forth therein and in this Trust Agreement. The
Preferred Securities shall have no preemptive or similar rights and when
issued and delivered to Securityholders against payment of the purchase
price therefor will be fully paid and nonassessable interests in the Trust.
ARTICLE III.
PAYMENT ACCOUNT
SECTION 3.01. PAYMENT ACCOUNT. (a) On or prior to the Closing
Date, the Property Trustee shall establish the Payment Account. The
Property Trustee and the Paying Agent appointed by the Administrative
Trustees shall have exclusive control with respect to the Payment Account
for the purpose of making deposits in and withdrawals from the Payment
Account in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account shall
be held by the Property Trustee in the Payment Account for the exclusive
benefit of the Holders of Trust Securities and for distribution as herein
provided.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held
in the Payment Account shall not be invested by the Property Trustee
pending distribution thereof.
ARTICLE IV.
DISTRIBUTIONS; REDEMPTION
SECTION 4.01. DISTRIBUTIONS. (a) Distributions on the Trust
Securities shall be cumulative, and will accumulate whether or not there
are funds of the Trust available for the payment of Distributions.
Distributions shall accrue from the Closing Date, and, except in the event
that the Depositor exercises its right to extend the interest payment
period for the Debentures pursuant to Section 311 of the Subordinated
Indenture, shall be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on December 31, 1996.
If any date on which Distributions are otherwise payable on the Trust
Securities is not a Business Day, then the payment of such Distribution
shall be made on the next succeeding day that is a Business Day except
that, if such Business Day is in the next succeeding calendar year, payment
of such distribution shall be made on the immediately preceding Business
Day, 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 this
Section 4.01(a) a "Distribution Date").
(b) Distributions payable on the Trust Securities shall be fixed
at a rate of % per annum of the Liquidation Amount of the Trust
Securities. The amount of Distributions payable for any full quarterly
period shall be computed on the basis of twelve 30-day months and a 360-day
year and for any period shorter than a full month, on the basis of the
actual number of days elapsed. If the interest payment period for the
Debentures is extended pursuant to Section 311 of the Subordinated
Indenture, then Distributions on the Preferred Securities will be deferred
for the period equal to the extension of the interest payment period for
the Debentures and the rate per annum at which Distributions on the Trust
Securities accumulate shall be increased by an amount such that the
aggregate amount of Distributions that accumulate on all Trust Securities
during any such extended interest payment period is equal to the aggregate
amount of interest (including, to the extent permitted by law, interest
payable on unpaid interest at the percentage rate per annum set forth
above, compounded quarterly) that accrues during any such extended interest
payment period on the Debentures. The amount of Distributions payable for
any period shall include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made and
shall be deemed payable on each Distribution Date only to the extent that
the Trust has funds immediately available in the Payment Account for the
payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on
the Securities Register for the Trust Securities on the relevant record
date, which shall be 15 days prior to such Distribution Date.
SECTION 4.02. REDEMPTION. (a) On each Debenture Redemption Date
and at Maturity for the Debentures, the Property Trustee will be required
to redeem a Like Amount of Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee
by first-class mail, postage prepaid, mailed not less than 30 nor more than
60 days prior to the Redemption Date to each Holder of Trust Securities to
be redeemed, at such Holder's address appearing in the Security Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to
be redeemed, the identification and the total Liquidation Amount
of the particular Trust Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will
become due and payable upon each such Trust Security to be
redeemed and that Distributions thereon will cease to accrue on
and after said date;
(vi) the place or places where such Trust Securities are to be
surrendered for payment of the Redemption Price; and
(vii) such other matters as the Property Trustee shall deem
desirable or appropriate.
(c) The Trust Securities redeemed on each Redemption Date shall
be redeemed at the Redemption Price with the proceeds from the
contemporaneous redemption of Debentures. Redemptions of the Trust
Securities shall be made and the Redemption Price shall be deemed payable
on each Redemption Date only if the Trust has funds immediately available
in the Payment Account for such payment.
(d) If the Property Trustee gives a notice of redemption in
respect of any Preferred Securities, then, by 12:00 noon, New York time, on
the Redemption Date, subject to Section 4.02(c), the Property Trustee shall
irrevocably deposit with the Paying Agent funds sufficient to pay the
applicable Redemption Price and will give the Paying Agent irrevocable
instructions to pay the Redemption Price to the Holders thereof upon
surrender of their Trust Securities Certificates. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Trust Securities called for redemption shall be payable to the Holders of
such Trust Securities as they appear on the Securities Register for the
Trust 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 on the Redemption Date all rights of Securityholders
holding Trust Securities so called for redemption will cease, except the
right of such Securityholders to receive the Redemption Price, and such
Trust Securities will cease to be outstanding. In the event that any
Redemption Date is not a Business Day, then payment of the Redemption Price
payable on such date shall 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). In the event that payment of the Redemption Price in respect
of any Trust Securities called for redemption is not paid either by the
Trust or by the Depositor pursuant to the Guarantee, Distributions on such
Trust Securities will continue to accrue, at the then applicable rate, from
the Redemption Date originally established to the date on which such
Redemption Price shall actually be paid.
(e) Subject to Section 4.03(a), if less than all the Outstanding
Trust Securities are to be redeemed on a Redemption Date, then the
aggregate Liquidation Amount of Trust Securities to be redeemed shall be
allocated 3% to the Common Securities and 97% to the Preferred Securities.
The particular Preferred Securities to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Property Trustee from
the Outstanding Preferred Securities not previously called for redemption,
by such method as the Property Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to
$25 or integral multiples thereof) of the Liquidation Amount of Preferred
Securities of a denomination larger than $25. The Property Trustee shall
promptly notify the Transfer Agent and Registrar in writing of the
Preferred Securities selected for redemption and, in the case of any
Preferred Securities selected for partial redemption, the Liquidation
Amount thereof to be redeemed. For all purposes of this Trust Agreement,
unless the context otherwise requires, all provisions relating to the
redemption of Preferred Securities shall relate, in the case of any
Preferred Securities redeemed or to be redeemed only in part, to the
portion of the Liquidation Amount of Preferred Securities which has been or
is to be redeemed.
SECTION 4.03. SUBORDINATION OF COMMON SECURITIES. (a) If on
any Distribution Date or Redemption Date any Event of Default resulting
from a Debenture Event of Default shall have occurred and be continuing, no
payment of any Distribution (including Additional Amounts, if applicable)
on, or Redemption Price of, any Common Security, and no other payment on
account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated
and unpaid Distributions (including Additional Amounts, if applicable) on
all Outstanding Preferred Securities for all distribution periods
terminating on or prior thereto, or in the case of payment of the
Redemption Price, payment in full of such Redemption Price on all
Outstanding Preferred Securities, shall have been made or provided for.
(b) In the case of the occurrence of an Event of Default
resulting from a Debenture Event of Default, the Holder of Common
Securities will be deemed to have waived such Event of Default until the
effect of all such Events of Default with respect to the Preferred
Securities shall have been cured, waived or otherwise eliminated. Until
all Events of Default with respect to the Preferred Securities shall have
been so cured, waived or otherwise eliminated, the Property Trustee shall
act solely on behalf of the Holders of the Preferred Securities, and only
the Holders of the Preferred Securities will have the right to direct the
Property Trustee to act.
SECTION 4.04. PAYMENT PROCEDURES. Payments in respect of the
Preferred Securities shall be made by check mailed to the address of the
Person entitled thereto as such address shall appear on the Securities
Register. Payments in respect of the Common Securities shall be made in
such manner as shall be mutually agreed between the Administrative Trustees
and the Holder of the Common Securities.
SECTION 4.05. TAX RETURNS AND REPORTS. The Administrative
Trustees shall prepare (or cause to be prepared), at the Depositor's
expense and direction, and file all United States federal, state and local
tax and information returns and reports required to be filed by or in
respect of the Trust. In this regard, the Administrative Trustees shall
(a) prepare and file (or cause to be prepared and filed) the Internal
Revenue Service Form 1041 (or any successor form) required to be filed in
respect of the Trust in each taxable year of the Trust and (b) prepare and
furnish (or cause to be prepared and furnished) to each Securityholder the
related Internal Revenue Service Form 1099, or any successor form or the
information required to be provided on such form. The Administrative
Trustees shall provide the Depositor and the Property Trustee with a copy
of all such returns, reports and schedules promptly after such filing or
furnishing. The Trustees shall comply with United States federal
withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Securityholders under the
Trust Securities.
SECTION 4.06. PAYMENTS UNDER SUBORDINATED INDENTURE. Any amount
payable hereunder to any Holder of Preferred Securities shall be reduced by
the amount of any corresponding payment such Holder has directly received
pursuant to Section 808 of the Subordinated Indenture. Notwithstanding the
provisions hereunder to the contrary, Securityholders acknowledge that any
Holder of Preferred Securities that receives payment under Section 808 of
the Subordinated Indenture may receive amounts greater than the amount such
Holder may be entitled to receive pursuant to the other provisions of this
Trust Agreement.
ARTICLE V.
TRUST SECURITIES CERTIFICATES
SECTION 5.01. THE TRUST SECURITIES CERTIFICATES. The Trust
Securities Certificates shall be issued in denominations of $25 Liquidation
Amount and integral multiples thereof. Subject to Section 2.04 relating to
the original issuance of the Preferred Securities Certificate registered in
the name of the nominee of the Securities Depository, the Trust Securities
Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of at least one Administrative Trustee and, if executed
on behalf of the Trust by facsimile signature, countersigned by a Transfer
Agent or its agent. Trust Securities Certificates bearing the signatures
of individuals who were, at the time when such signatures shall have been
affixed, authorized to sign on behalf of the Trust and, if executed on
behalf of the Trust by facsimile signature and countersigned by a Transfer
Agent or its agent, shall be validly issued and entitled to the benefits of
this Trust Agreement, notwithstanding that such individuals or any of them
shall have ceased to be so authorized prior to the delivery of such Trust
Securities Certificates or did not hold such offices at the date of
delivery of such Trust Securities Certificates. Trust Securities
Certificates may be typewritten, printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the
Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees, or any one of them.
SECTION 5.02. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR. On
the Closing Date, the Depositor shall acquire, and thereafter retain,
beneficial and record ownership of the Common Securities. Any attempted
transfer of the Common Securities (other than a transfer in connection with
a merger or consolidation of the Depositor with or into another corporation
pursuant to Section 1101 of the Subordinated Indenture) shall be void. The
Administrative Trustees shall cause each Common Securities Certificate
issued to the Depositor to contain a legend stating "THIS CERTIFICATE IS
NOT TRANSFERABLE." A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of a
typewritten or definitive Common Securities Certificate.
SECTION 5.03. REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED
SECURITIES CERTIFICATES. (a) The Registrar shall keep or cause to be kept,
at its principal corporate office, a Securities Register in which, subject
to such reasonable regulations as it may prescribe, the Registrar shall
provide for the registration of Preferred Securities Certificates and the
registration of transfers and exchanges of Preferred Securities
Certificates as herein provided.
(b) Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to
Section 5.08, the Administrative Trustees, or any one of them, shall
execute on behalf of the Trust by manual or facsimile signature and, if
executed on behalf of the Trust by facsimile signature, cause a Transfer
Agent or its agent to countersign and deliver, in the name of the
designated transferee or transferees, one or more new Preferred Securities
Certificates in authorized denominations of a like aggregate Liquidation
Amount. At the option of a Holder, Preferred Securities Certificates may
be exchanged for other Preferred Securities Certificates in authorized
denominations of the same class and of a like aggregate Liquidation Amount
upon surrender of the Preferred Securities Certificates to be exchanged at
the office or agency maintained pursuant to Section 5.08.
(c) Every Preferred Securities Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied
by a written instrument of transfer in form satisfactory to the
Administrative Trustees and a Transfer Agent duly executed by the Holder or
such Holder's attorney duly authorized in writing. The Trust shall not be
required to (i) issue, register the transfer of, or exchange any Preferred
Securities during a period beginning at the opening of business 15
calendar days before the day of mailing of a notice of redemption of any
Preferred Securities called for redemption and ending at the close of
business on the day of such mailing or (ii) register the transfer of or
exchange any Preferred Securities so selected for redemption, in whole or
in part, except the unredeemed portion of any such Preferred Securities
being redeemed in part.
(d) No service charge shall be made for any registration of
transfer or exchange of Preferred Securities Certificates, but a Transfer
Agent may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Preferred Securities Certificates.
SECTION 5.04. MUTILATED, DESTROYED, LOST OR STOLEN TRUST
SECURITIES CERTIFICATES. If (i) any mutilated Trust Securities Certificate
shall be surrendered to a Transfer Agent, or if a Transfer Agent shall
receive evidence to its satisfaction of the destruction, loss or theft of
any Trust Securities Certificate and (ii) there shall be delivered to the
Transfer Agent and the Administrative Trustees such security or indemnity
as may be required by them to save each of them and the Depositor harmless,
then in the absence of notice that such Trust Securities Certificate shall
have been acquired by a bona fide purchaser, the Administrative Trustees,
or any one of them, on behalf of the Trust, shall execute by manual or
facsimile signature such Trust Securities Certificate and, if execution on
behalf of the Trust is by facsimile signature, such Certificate shall be
countersigned by a Transfer Agent; and the Administrative Trustees, or any
one of them, shall make available for delivery, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Trust Securities
Certificate, a new Trust Securities Certificate of like class, tenor and
denomination. In connection with the issuance of any new Trust Securities
Certificate under this Section 5.04, the Administrative Trustees or the
Transfer Agent may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection therewith.
Any duplicate Trust Securities Certificate issued pursuant to this Section
5.04 shall constitute conclusive evidence of an ownership interest in the
Trust, as if originally issued, whether or not the lost, stolen or
destroyed Trust Securities Certificate shall be found at any time.
SECTION 5.05. CANCELLATION BY REGISTRAR. All Trust Securities
Certificates surrendered for payment, redemption, registration of transfer
or exchange shall, if surrendered to any Person other than the Registrar,
be delivered to the Registrar and, if not theretofore cancelled, shall
promptly be cancelled by the Registrar. No Trust Securities Certificates
shall be issued in lieu of or in exchange for any Trust Securities
Certificates cancelled as provided in this Section, except as expressly
permitted by this Trust Agreement. All cancelled Trust Securities
Certificates held by the Registrar shall be disposed of in accordance with
customary practices.
SECTION 5.06. PERSONS DEEMED SECURITYHOLDERS. Prior to due
presentation of a Preferred Securities Certificate for registration of
transfer, the Trustees and the Registrar shall be entitled to treat the
Person in whose name any Preferred Securities Certificate shall be
registered in the Securities Register as the Holder of such Preferred
Securities Certificate for the purpose of receiving Distributions and for
all other purposes whatsoever, and neither the Trustees nor the Registrar
shall be bound by any notice to the contrary.
SECTION 5.07. LISTS OF HOLDERS. Semiannually, not later than
June 1 and December 1 in each year, commencing December 1, 1996, and at
such other times as the Property Trustee may request in writing, the
Administrative Trustees shall furnish or cause to be furnished to the
Property Trustee information as to the names and addresses of the Holders,
and the Property Trustee shall preserve such information and similar
information received by it in any other capacity and afford to the Holders
access to information so preserved by it, all to such extent, if any, and
in such manner as shall be required by the Trust Indenture Act; provided,
however, that no such list need be furnished so long as the Property
Trustee shall be the Registrar.
SECTION 5.08. MAINTENANCE OF OFFICE OR AGENCY. The
Administrative Trustees shall or shall cause the Transfer Agent to
maintain, in the Borough of Manhattan, the City of New York, an office or
offices or agency or agencies where Preferred Securities Certificates may
be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Trustees or the Transfer Agent in respect of the
Trust Securities Certificates may be served. The Administrative Trustees
shall or shall cause the Transfer Agent to give prompt written notice to
the Property Trustee and to the Securityholders of any change in any such
office or agency.
SECTION 5.09. APPOINTMENT OF PAYING AGENT. The Paying Agent
shall make Distributions to Securityholders from the Payment Account and
shall report the amounts of such Distributions to the Administrative
Trustees and the Property Trustee. Any Paying Agent shall have the
revocable power to withdraw funds from the Payment Account for the purpose
of making the Distributions. The Property Trustee shall be entitled to
rely upon a certificate of the Paying Agent stating in effect the amount of
such funds so to be withdrawn and that same are to be applied by the Paying
Agent in accordance with this Section 5.09. The Administrative Trustees or
any one of them may revoke such power and remove the Paying Agent if the
Administrative Trustees or any one of them determines in its sole
discretion that the Paying Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect. The Paying
Agent may choose any co-paying agent that is acceptable to the
Administrative Trustees and the Depositor. The Paying Agent shall be
permitted to resign upon 30 days' written notice to the Administrative
Trustees and the Depositor. In the event of the removal or resignation of
the Paying Agent, the Administrative Trustees shall appoint a successor
that is reasonably acceptable to the Property Trustee and the Depositor to
act as Paying Agent (which shall be a bank, trust company or an Affiliate
of the Depositor). The Administrative Trustees shall cause such successor
Paying Agent or any additional Paying Agent appointed by the Administrative
Trustees to execute and deliver to the Trustees an instrument in which such
successor Paying Agent or additional Paying Agent shall agree with the
Trustees that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to such Securityholders. The Paying
Agent shall return all unclaimed funds to the Property Trustee and upon
resignation or removal of a Paying Agent such Paying Agent also shall
return all other funds in its possession to the Property Trustee. The
provisions of Sections 8.01 through 8.06 shall apply to the Paying Agent
appointed hereunder, and the Paying Agent shall be bound by the
requirements with respect to paying agents of securities issued pursuant to
the Trust Indenture Act. Any reference in this Trust Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
SECTION 5.10. BOOK-ENTRY SYSTEM. (a) The Administrative
Trustees, at the direction and expense of the Depositor, may from time to
time appoint a Securities Depository or a successor thereto and enter into
a letter of representations or other agreement with such Securities
Depository to establish procedures with respect to the Preferred
Securities. Any Securities Depository shall be a Clearing Agency.
(b) The Depositor and the Trustees covenant and agree to meet the
requirements of a Securities Depository for the Preferred Securities with
respect to required notices and other provisions of the letter of
representations or agreement executed with respect to such Preferred
Securities.
(c) Whenever the beneficial ownership of any Preferred Securities
is determined through the books of a Securities Depository, the
requirements in this Trust Agreement of holding, delivering or
transferring, and making payments in respect of, such Preferred Securities
shall be deemed modified with respect to such Preferred Securities to meet
the requirements of the Securities Depository with respect to actions of
the Trustees, the Depositor and the Paying Agent. Any provisions hereof
permitting or requiring delivery of such Preferred Securities shall, while
such Preferred Securities are in a book-entry system, be satisfied by the
notation on the books of the Securities Depository in accordance with
applicable state law.
ARTICLE VI.
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.01. LIMITATIONS ON VOTING RIGHTS. (a) Except as
provided in this Section 6.01, in Section 10.03 and as otherwise required
by law, no Holder of Preferred Securities shall have any right to vote or
in any manner otherwise control the administration, operation and
management of the Trust or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Trust
Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an association.
If the Property Trustee fails to enforce its rights under the Debentures or
this Trust Agreement, a Holder of Preferred Securities may institute a
legal proceeding directly against the Depositor to enforce the Property
Trustee's rights under the Debentures or this Trust Agreement, to the
fullest extent permitted by law, without first instituting any legal
proceeding against the Property Trustee or any other person.
Notwithstanding the foregoing, a Holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such Holder
directly of principal of or interest on the Debentures having a principal
amount equal to the aggregate Liquidation Amount of the Preferred
Securities of such Holder on or after the due dates specified in the
Debentures. In connection with any such proceeding, the Depositor will be
subrogated to the rights of any Holder of Preferred Securities to the
extent of any payment made by the Depositor to such Holder.
(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 the Debenture Trustee with
respect to such Debentures, (ii) waive any past default which is waivable
under Section 813 of the Subordinated Indenture, (iii) exercise any right
to rescind or annul a declaration that the principal of all the Debentures
shall be due and payable or (iv) consent to any amendment, modification or
termination of the Subordinated Indenture or the Debentures, where such
consent shall be required, without, in each case, obtaining the prior
approval of the Holders of at least 66 2/3% of the aggregate Liquidation
Amount of the Outstanding Preferred Securities; provided, however, that
where a consent under the Subordinated Indenture would require the consent
of each holder of Debentures affected thereby, no such consent shall be
given by any Trustee without the prior written consent of each holder of
Preferred Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Preferred Securities, except
pursuant to a subsequent vote of the Preferred Securities.
SECTION 6.02. NOTICE OF MEETINGS. Notice of all meetings of the
Holders of a Preferred Securities, stating the time, place and purpose of
the meeting, shall be given by the Administrative Trustees pursuant to
Section 10.08 to each Holder of a Preferred Security, at his registered
address, at least 15 days and not more than 90 days before the meeting. At
any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any
adjourned meeting may be held as adjourned without further notice.
SECTION 6.03. MEETINGS OF HOLDERS OF PREFERRED SECURITIES. (a)
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders
to vote on any matter upon the written request of the Holders of at least
25% of the aggregate Liquidation Amount of the Outstanding Preferred
Securities and may, at any time in their discretion, call a meeting of
Holders of Preferred Securities to vote on any matters as to which the
Holders of Preferred Securities are entitled to vote.
(b) Holders of at least 50% of the aggregate Liquidation Amount
of the Outstanding Preferred Securities, present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
(c) If a quorum is present at a meeting, an affirmative vote by
the Holders of a majority of the aggregate Liquidation Amount of the
Outstanding Preferred Securities shall constitute the action of the
Securityholders, unless this Trust Agreement shall require a greater
affirmative vote.
SECTION 6.04. VOTING RIGHTS. Securityholders shall be entitled
to one vote for each $25 of Liquidation Amount represented by their Trust
Securities in respect of any matter as to which such Securityholders are
entitled to vote.
SECTION 6.05. PROXIES, ETC. At any meeting of Securityholders,
any Securityholder entitled to vote thereat may vote by proxy, provided
that no proxy shall be voted at any meeting unless it shall have been
placed on file with the Administrative Trustees, or with such other officer
or agent of the Trust as the Administrative Trustees may direct, for
verification prior to the time at which such vote shall be taken. Only
Securityholders of record shall be entitled to vote. When Trust Securities
are held jointly by several Persons, any one of them may vote at any
meeting in person or by proxy in respect of such Trust Securities, but if
more than one of them shall be present at such meeting in person or by
proxy, and such joint owners or their proxies so present disagree as to any
vote to be cast, such vote shall not be received in respect of such Trust
Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the
challenger.
SECTION 6.06. SECURITYHOLDER ACTION BY WRITTEN CONSENT. Any
action which may be taken by Securityholders at a meeting may be taken
without a meeting if Holders of at least a majority of the aggregate
Liquidation Amount of the Outstanding Trust Securities entitled to vote in
respect of such action (or such larger proportion thereof as shall be
required by any express provision of this Trust Agreement) shall consent to
the action in writing.
SECTION 6.07. RECORD DATE FOR VOTING. For the purposes of
determining the Securityholders who are entitled to notice of and to vote
at any meeting or by written consent, or for the purpose of any other
action, the Administrative Trustees may from time to time fix a date, not
more than 90 days prior to the date of any meeting of Securityholders or
other action, as the case may be, as a record date for the determination of
the identity of the Securityholders of record for such purposes.
SECTION 6.08. ACTS OF SECURITYHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided
or permitted by this Trust Agreement to be given, made or taken by
Securityholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Securityholders in person or
by an agent duly appointed in writing; and, except as otherwise expressly
provided herein, such action shall become effective when such instrument or
instruments are delivered to the Administrative Trustees. Such instrument
or instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Securityholders signing
such instrument or instruments. Proof of execution of any such instrument
or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.01) conclusive in
favor of the Trustees, if made in the manner provided in this Section 6.08.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgements of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a
capacity other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of his authority. The fact and date
of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which any
Trustee deems sufficient.
(c) The ownership of Preferred Securities shall be proved by the
Securities Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Trust Security shall bind
every future Holder of the same Trust Security and the Holder of every
Trust Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done, omitted
or suffered to be done by the Trustees or the Trust in reliance thereon,
whether or not notation of such action is made upon such Trust Security.
(e) Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any particular Trust
Security may do so with regard to all or any part of the Liquidation Amount
of such Trust Security or by one or more duly appointed agents each of
which may do so pursuant to such appointment with regard to all or any part
of such Liquidation Amount.
(f) If any dispute shall arise between or among the
Securityholders and the Administrative Trustees with respect to the
authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such
Securityholder or Trustee under this Article VI, then the determination of
such matter by the Property Trustee shall be conclusive with respect to
such matter.
SECTION 6.09. INSPECTION OF RECORDS. Subject to Section 5.07
concerning access to the list of Securityholders, upon reasonable notice to
the Administrative Trustees and the Property Trustee, the records of the
Trust shall be open to inspection by Securityholders during normal business
hours for any purpose reasonably related to such Securityholder's interest
as a Securityholder.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
OF THE PROPERTY TRUSTEE
SECTION 7.01. PROPERTY TRUSTEE. The Property Trustee hereby
represents and warrants for the benefit of the Depositor and the
Securityholders that:
(i) the Property Trustee is a banking corporation or trust
company duly organized, validly existing and in good standing under the
laws of the State of Delaware;
(ii) the Property Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under this
Trust Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Agreement;
(iii) this Trust Agreement has been duly authorized, executed
and delivered by the Property Trustee and constitutes the valid and legally
binding agreement of the Property Trustee enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(iv) the execution, delivery and performance by the Property
Trustee of this Trust Agreement will not violate, conflict with or
constitute a breach of the Property Trustee's charter or by-laws; and
(v) neither the authorization, execution or delivery by the
Property Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Property Trustee contemplated herein require the
consent or approval of, the giving of notice to, the registration with or
the taking of any other action with respect to any governmental authority
or agency under any existing Federal or Delaware law governing the banking
or trust powers of the Property Trustee.
ARTICLE VIII.
THE TRUSTEES
SECTION 8.01. CERTAIN DUTIES AND RESPONSIBILITIES. (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 Trust
Agreement and in the terms of the Trust Securities and no implied covenants
shall be read into this Trust Agreement against the Property Trustee. In
case an Event of Default has occurred (that has not been cured or waived),
the Property Trustee shall exercise such of the rights and powers vesting
in it by this Trust Agreement, 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 Trust Agreement 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
Trust Agreement and in the terms of the Trust 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 Trust Agreement, and no implied covenants or obligations
shall be read into this Trust Agreement against the Property
Trustee; and
(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 Trust Agreement; provided, however, that in
the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
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 Trustee Agreement.
(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 at least a majority of
the aggregate Liquidation Amount of the Outstanding Preferred
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 Trust Agreement;
(iv) no provision of this Trust Agreement shall require any of
the Trustees to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity 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 Trust Property
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 Trust Agreement, the Trust Indenture
Act and, to the extent applicable, Rule 3a-7 under the Investment
Company Act of 1940, as amended;
(vi) the Property Trustee shall have no duty or liability for,
or with respect to the value, genuineness, existence or sufficiency
of, the Trust Property 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
with the Depositor. Money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Payment Account established by the Property Trustee pursuant to this
Trust Agreement and except to the extent otherwise required by law;
and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Trust Agreement, nor
shall the Property Trustee be liable for the default or misconduct of
the Administrative Trustees or the Depositor.
(C) all payments made by the Property Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from
the income and proceeds from the Trust Property and only to the
extent that there shall be sufficient income or proceeds from the
Trust Property to enable the Property Trustee or Paying Agent to
make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees
that it will look solely to the income and proceeds from the
Trust Property to the extent available for distribution to it as
herein provided and that the Trustees are not personally liable
to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust
Security. This Section 8.01(c) does not limit the liability of
the Trustees expressly set forth elsewhere in this Trust
Agreement or, in the case of the Property Trustee, in the Trust
Indenture Act.
(D) no Administrative Trustee shall be liable for any act
or omission to act hereunder, except for its own gross negligence
or wilful misconduct.
SECTION 8.02. CERTAIN NOTICES. (a) Within five Business Days
after the occurrence of any Event of Default, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 10.08, notice
of any Event of Default known to the Property Trustee to the
Securityholders, the Administrative Trustees and the Depositor, unless such
Event of Default shall have been cured or waived.
(b) Within Five Business Days after receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Subordinated Indenture, an Administrative
Trustee shall transmit, in the manner and to the extent provided in Section
10.08, notice of such exercise to the Securityholders and the Property
Trustee.
SECTION 8.03. CERTAIN RIGHTS OF PROPERTY TRUSTEE. Subject to
the provisions of Section 8.01 and except as provided by law:
(i) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any
resolution, Opinion of Counsel, certificate, written
representation of a Holder or transferee, certificate of auditors
or any other certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, appraisal, bond,
debenture, note, other evidence of indebtedness or other paper or
document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(ii) if (A) in performing its duties under this Trust Agreement
the Property Trustee is required to decide between alternative
courses of action or (B) in construing any of the provisions in
this Trust Agreement the Property Trustee finds the same
ambiguous or inconsistent with any other provisions contained
herein or (C) the Property Trustee is unsure of the application
of any provision of this Trust Agreement, then, except as to any
matter as to which the Preferred Securityholders are entitled to
vote under the terms of this Trust Agreement, the Property
Trustee shall deliver a notice to the Depositor requesting
written instructions of the Depositor as to the course of action
to be taken. The Property Trustee shall take such action, or
refrain from taking such action, as the Property Trustee shall be
instructed in writing to take, or to refrain from taking, by the
Depositor; provided, however, that if the Property Trustee does
not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such
reasonably shorter period of time set forth in such notice (which
to the extent practicable shall not be less than two Business
Days), it may, but shall be under no duty to, take or refrain
from taking such action not inconsistent with this Trust
Agreement as it shall deem advisable and in the best interests of
the Securityholders, in which event the Property Trustee shall
have no liability except for its own bad faith, negligence or
willful misconduct;
(iii) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officer's Certificate;
(iv) the Property Trustee may consult with counsel of its
selection and the written advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon;
(v) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust
Agreement at the request or direction of any of the
Securityholders pursuant to this Trust Agreement, unless such
Securityholders shall have offered to the Property Trustee
reasonable security or indemnity against the costs, expenses
(including reasonable attorneys' fees and expenses) and
liabilities which might be incurred by it in complying with such
request or direction;
(vi) 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, approval, bond, debenture,
note or other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine, unless requested in
writing to do so by one or more Securityholders, but the Property
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(vii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through its agents 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; provided, however, that the Property Trustee shall
be responsible for its own negligence or recklessness with
respect to selection of any agent or attorney appointed by it
hereunder;
(viii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Trust
Agreement;
(ix) the Property Trustee shall not be charged with knowledge
of any default or Event of Default with respect to the Trust
Securities unless either (A) a Responsible Officer of the
Property Trustee shall have actual knowledge of the default or
Event of Default or (B) written notice of such default or Event
of Default shall have been given to the Property Trustee by the
Depositor, the Administrative Trustees or by any Securityholder;
(x) no provision of this Trust Agreement 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; and no permissive or discretionary power or authority
available to the Property Trustee shall be construed to be a
duty;
(xi) no provision of this Trust Agreement 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
the Property 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 Trust Agreement or adequate
indemnity against such risk or liability is not reasonably
assured to it;
(xii) 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 securities) (or
any rerecording, refiling or reregistration thereof);
(xiii) the Property Trustee shall have the right at any time to
seek instructions concerning the administration of this Trust
Agreement from any court of competent jurisdiction; and
(xiv) whenever in the administration of this Trust Agreement 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 (A) may request
instructions from the Securityholders, which instructions may
only be given by the Holders of the same amount of the Trust
Securities as would be entitled to direct the Property Trustee
under the terms of this Trust Agreement in respect of such
remedies, rights or actions, (B) may refrain from enforcing such
remedy or right or taking such other action until such
instructions are received, and (C) shall be protected in acting
in accordance with such instructions.
SECTION 8.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES. The recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Depositor, 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 or as to the title of the Trust
thereto or as to the security afforded thereby or hereby, or as to the
validity or genuineness of any securities at any time pledged and deposited
with any Trustees hereunder, nor as to the validity or sufficiency of this
Trust Agreement or the Trust Securities. The Trustees shall not be
accountable for the use or application by the Trust of the proceeds of the
sale of the Trust Securities in accordance with Section 2.05.
SECTION 8.05. MAY HOLD SECURITIES. Except as provided in the
definition of the term "Outstanding" in Article I, any Trustee or any agent
of any Trustee or the Trust, in its individual or any other capacity, may
become the owner or pledgee of Trust Securities and may otherwise deal with
the Trust with the same rights it would have if it were not a Trustee or
such agent.
SECTION 8.06. COMPENSATION; FEES; INDEMNITY. (a) The Depositor
agrees:
(i) to pay to the Trustees from time to time compensation for
all services rendered by the Trustees hereunder in accordance with a
separate fee agreement between the Depositor and the Trustees, if any
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(ii) except as otherwise expressly provided herein, to reimburse
the Trustees upon request for all reasonable expenses, disbursements
and advances reasonably incurred or made by the Trustees in accordance
with any provision of this Trust Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence (gross negligence, in the case of any
Administrative Trustee), bad faith or willful misconduct; and
(iii) to indemnify each Indemnified Person for, and to hold each
Indemnified Person harmless against, any and all loss, damage, claims,
liability or expense incurred without negligence (gross negligence, in
the case of any Administrative Trustee), bad faith or willful
misconduct on its part, arising out of or in connection with the
acceptance or administration of this Trust Agreement, including the
reasonable costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
(b) As security for the performance of the obligations of the
Depositor under this Section, each of the Trustees shall have a lien prior
to the Trust Securities upon all property and funds held or collected by
such Trustee as such.
(c) The provisions of this Section 8.06 shall survive the
termination of this Trust Agreement.
SECTION 8.07. CERTAIN TRUSTEES REQUIRED; ELIGIBILITY. (a) There
shall at all times be a Property Trustee hereunder with respect to the
Trust Securities. The Property Trustee shall be a Person that has a
combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the
purposes of this Section 8.07(a), the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the
Property Trustee with respect to the Trust Securities shall cease to be
eligible in accordance with the provisions of this Section 8.07(a), it
shall resign immediately in the manner and with the effect hereinafter
specified in this Article VIII.
(b) There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each
Administrative 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 persons
authorized to bind such entity.
(c) There shall at all times be a Delaware Trustee with respect
to the Trust Securities. The Delaware Trustee shall either be (i) a
natural person who is at least 21 years of age and a resident of the State
of Delaware or (ii) a legal entity with its principal place of business in
the State of Delaware that otherwise meets the requirements of applicable
Delaware law and that shall act through one or more persons authorized to
bind such entity. So long as the Property Trustee has its principal place
of business in the State of Delaware and otherwise meets the requirements
of applicable law, the Property Trustee shall also be the Delaware Trustee.
In the event that the Property Trustee should no longer qualify as the
Delaware Trustee, either one of the Administrative Trustees who is a
resident of the State of Delaware shall be the Delaware Trustee or the
Administrative Trustees shall appoint a qualified Person to be Delaware
Trustee.
SECTION 8.08. CONFLICTING INTERESTS. If the Property Trustee
has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Property Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Trust Agreement. The
Subordinated Indenture and the Guarantee Agreement shall be deemed to be
specifically described in this Trust Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture
Act.
SECTION 8.09. CO-TRUSTEES AND SEPARATE TRUSTEE. (a) 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
Property may at the time be located, the Depositor and the Property Trustee
shall have power to appoint, and upon the written request of the Property
Trustee, the Depositor shall for such purpose join with the Property
Trustee in the execution, delivery, and performance of all instruments and
agreements necessary or proper to appoint, one or more Persons approved by
the Property Trustee either to act as co-trustee, jointly with the Property
Trustee, of all or any part of such Trust 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 the capacity aforesaid, any property, title, right or power
deemed necessary or desirable, subject to the other provisions of this
Section 8.09. If the Depositor does not join in such appointment within 15
days after the receipt by it of a request so to do, or in case a Debenture
Event of Default has occurred and is continuing, the Property Trustee alone
shall have power to make such appointment.
(b) Should any written instrument from the Depositor be required
by any co-trustee or separate trustee so appointed for more fully
confirming to such co-trustee or separate trustee such property, title,
right, or power, any and all such instruments shall, on request, be
executed, acknowledged, and delivered by the Depositor.
(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the
following terms, namely:
(i) The Trust Securities shall be executed and delivered
and all rights, powers, duties, and obligations hereunder in
respect of the custody of securities, cash and other personal
property held by, or required to be deposited or pledged with,
the Trustees designated for such purpose hereunder, shall be
exercised, solely by such Trustees.
(ii) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of any
property covered by such appointment shall be conferred or
imposed upon and exercised or performed by the Property Trustee
or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any
particular act is to be performed, the Property Trustee shall be
incompetent or unqualified to perform such act, in which event
such rights, powers, duties, and obligations shall be exercised
and performed by such co-trustee or separate trustee.
(iii) The Property Trustee at any time, by an instrument
in writing executed by it, with the written concurrence of the
Depositor, may accept the resignation of or remove any co-trustee
or separate trustee appointed under this Section 8.09, and, in
case a Debenture Event of Default has occurred and is continuing,
the Property Trustee shall have power to accept the resignation
of, or remove, any such co-trustee or separate trustee without
the concurrence of the Depositor. Upon the written request of
the Property Trustee, the Depositor shall join with the Property
Trustee in the execution, delivery, and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or
separate trustee so resigned or removed may be appointed in the
manner provided in this Section 8.09.
(iv) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the
Trustee, or any other such trustee hereunder.
(v) The Property Trustee shall not be liable by reason of
any act of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Property Trustee
shall be deemed to have been delivered to each such co-trustee
and separate trustee.
SECTION 8.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of any Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
requirements of Section 8.11.
(b) The Property Trustee may resign at any time by giving
written notice thereof to the Deppositor and the Securityholders. Any
Administrative Trustee may resign at any time by giving written notice
thereof to the Depositor. If the instrument of acceptance by a successor
Trustee required by Section 8.11 shall not have been delivered to the
resigning Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) Unless a Debenture Event of Default shall have occurred and
be continuing, the Trustee may be removed at any time by Act of the Common
Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Trustee may be removed at such time by Act of the
Securityholders of a majority of the aggregate Liquidation Amount of the
Outstanding Preferred Securities, delivered to such Trustee (in its
individual capacity and on behalf of the Trust).
(d) If a Trustee shall resign, be removed or become incapable of
continuing to act as Trustee at a time when no Debenture Event of Default
shall have occurred and be continuing, the Common Securityholder, by Act of
the Common Securityholder delivered to the retiring Trustee, shall promptly
appoint a successor Trustee, and the Trustee so succeeded shall comply with
the requirements of Section 8.11. If any Trustee shall resign, be removed
or become incapable of continuing to act as Trustee at a time when a
Debenture Event of Default shall have occurred and be continuing, the
Preferred Securityholders, by Act of the Holders of at least a majority of
the aggregate Liquidation Amount of the Outstanding Preferred Securities
delivered to such Trustee, shall promptly appoint a successor Trustee, and
the Trustee so succeeded shall comply with the requirements of Section
8.11. If no successor Trustee shall have been so appointed by the Common
Securityholders or the Preferred Securityholders and accepted appointment
in the manner required by Section 8.11, any Securityholder who has been a
Securityholder for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee.
(e) A retiring Property Trustee shall give notice thereof and of
the appointment of its successor Trustee to all Securityholders in the
manner provided in Section 10.08 and shall give notice to the Depositor.
Each notice shall include the name and address of the successor Trustee and
the address of its Corporate Trust Office.
(f) Notwithstanding the foregoing or any other provision of this
Trust Agreement, in the event any Administrative Trustee dies or becomes
incompetent or incapacitated, the vacancy created by such death,
incompetence or incapacity may be filled by (i) the unanimous act of
remaining Administrative Trustees if there are at least two of them or (ii)
otherwise by the Depositor (with the successor in each case being an
individual who satisfies the eligibility requirements for Administrative
Trustees set forth in Section 8.07). Additionally, notwithstanding the
foregoing or any other provision of this Trust Agreement, in the event the
Depositor reasonably believes that any Administrative Trustee has become
incompetent or incapacitated, the Depositor, by notice to the remaining
Trustees, may terminate the status of such Person as an Administrative
Trustee (in which case the vacancy so created will be filled in accordance
with the preceding sentence).
SECTION 8.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In
case of the appointment hereunder of a successor Trustee, the retiring
Trustee and the successor Trustee shall execute and deliver an amendment
hereto wherein the successor Trustee shall accept such appointment and
which shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, the successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to
the Trust Securities and the Trust.
(b) Upon request of any such successor Trustee, the retiring
Trustee shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers
and trusts referred to in the preceding paragraph.
No successor Trustee shall accept its appointment unless at the
time of such acceptance the successor Trustee shall be qualified and
eligible under this Article VIII.
SECTION 8.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any Person into which the Property Trustee or any Trustee that
is not a natural person may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of such
Trustee, shall be the successor of such Trustee hereunder, provided such
Person shall be otherwise qualified and eligible under this Article VIII,
without the execution or filing of any paper or any further act on the part
of any of the parties hereto.
SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
DEPOSITOR OR TRUST. If and when the Property Trustee shall be or become a
creditor of the Depositor or the Trust (or any other obligor upon the
Debentures or the Trust Securities), the Property Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of
claims against the Depositor or Trust (or any such other obligor).
SECTION 8.14. REPORTS BY PROPERTY TRUSTEE. (a) The Property
Trustee shall transmit to Securityholders such reports concerning the
Property Trustee and its actions under this Trust Agreement as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. Such of those reports as are required to be
transmitted by the Property Trustee pursuant to Section 313(a) of the Trust
Indenture Act shall be so transmitted within 60 days after December 31 of
each year, commencing December 31, 1996.
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Property Trustee with each
stock exchange upon which the Preferred Securities are listed, with the
Commission and with the Depositor. The Depositor will notify the Property
Trustee when any Preferred Securities shall have been listed on any stock
exchange.
SECTION 8.15. REPORTS TO THE PROPERTY TRUSTEE. The Depositor
and the Administrative Trustees on behalf of the Trust shall provide to the
Property Trustee such documents, reports, compliance certificates and
information as may be required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required thereby.
SECTION 8.16. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Trust Agreement
(including any covenants compliance with which constitutes a condition
precedent) 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) of the Trust Indenture Act may
be given in the form of an Officer's Certificate.
SECTION 8.17. NUMBER OF TRUSTEES. (a) The number of Trustees
shall be four, provided that the Depositor, by written instrument, may
increase or decrease the number of Administrative Trustees so long as there
is at least one.
(b) If a Trustee ceases to hold office for any reason and the
number of Administrative Trustees is not reduced pursuant to Section
8.17(a), or if the number of Trustees is increased pursuant to Section
8.17(a), the vacancy shall be filled with a Trustee appointed in accordance
with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not
operate to 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 8.10,
the Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 8.18. 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 2.07(a),
including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to delegate
from time to time to such of their number 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 8.19. 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 Trust Agreement shall not
be liable to the Trust or to any other Covered Person for its good faith
reliance on the provisions of this Trust Agreement; provided, however, that
an Indemnified Person shall be liable for any loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or
willfull misconduct, (subject, with respect to the Property Trustee, to
Section 8.01). The provisions of this Trust Agreement, 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 and subject to
the provisions of the Trust Indenture Act:
(i) whenever a conflict of interest exists or arises between
an Indemnified Person and the Trust or any Covered Person; or
(ii) whenever this Trust Agreement or any other agreement
contemplated herein 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 Securityholder,
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
terms so made, taken or provided by the Indemnified Person shall not
constitute a breach of this Trust Agreement or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person
at law or in equity or otherwise; and
(c) Unless otherwise expressly provided herein and subject to
the provisions of the Trust Indenture Act, whenever in this Trust Agreement
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 reasonably 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, to
the extent permitted by applicable law, shall not be subject to
any other or different standard imposed by this Trust Agreement.
ARTICLE IX.
TERMINATION AND LIQUIDATION
SECTION 9.01. TERMINATION UPON EXPIRATION DATE. The Trust shall
automatically terminate on the Expiration Date and the Trust Property shall
be distributed in accordance with Section 9.04.
SECTION 9.02. EARLY TERMINATION. Upon the first to occur of
(such first occurrence, an "Early Termination Event"):
(i) a Bankruptcy Event in respect of, or the dissolution or
liquidation of, the Depositor;
(ii) the redemption of all of the Preferred Securities;
(iii) the occurrence of a Special Event and the election by the
Depositor to terminate that Trust pursuant to Section 9.04(d);
(iv) the entrance by a court of competent jurisdiction of an
order for judicial termination of the Trust;
the Trust shall terminate and the Trustees shall take such action as is
required by Section 9.04.
SECTION 9.03. TERMINATION. The respective obligations and
responsibilities of the Trust and the Trustees created hereby shall
terminate upon the latest to occur of the following: (i) the distribution
by the Property Trustee to Securityholders upon the liquidation of the
Trust pursuant to Section 9.04, or upon the redemption of all of the Trust
Securities pursuant to Section 4.02 or 9.04(d), of all amounts required to
be distributed hereunder upon the final payment of the Trust Securities;
(ii) the payment of all amounts due to creditors of the Trust; and (iii)
the discharge of all administrative duties of the Administrative Trustees,
including the performance of any tax reporting obligations with respect to
the Trust or the Securityholders.
SECTION 9.04. LIQUIDATION. (a) On the Expiration Date or
earlier if an Early Termination Event specified in clause (i), (iii) or
(iv) of Section 9.02 shall occur, subject to Section 9.04(e), after
satisfaction of all amounts due to creditors of the Trust, if any, as
provided by applicable law, the Trust shall be liquidated by the Property
Trustee by distributing to each Securityholder a Like Amount of Debentures.
Notice of liquidation shall be given by the Administrative Trustees by
first-class mail, postage prepaid, mailed not later than 30 nor more than
60 days prior to the Liquidation Date to each Securityholder at such
Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(i) state the Liquidation Date, which, in the case of an Early
Termination Event specified in clause (iii) of Section 9.02 shall
be no later than the 90th day following the occurrence of the
Special Event;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be outstanding and any
Trust Securities Certificates not surrendered for exchange will
be deemed to represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for
Debentures, or in the case of a Section 9.04(e) liquidation,
receive a Liquidation Distribution, as the Administrative
Trustees or the Property Trustee shall deem appropriate.
(b) In order to effect the distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for
such distribution (which shall be not more than 45 days prior to the
Liquidation Date) and, either itself acting as exchange agent or through
the appointment of a separate exchange agent, shall establish such
procedures as it shall deem appropriate to effect the distribution of
Debentures in exchange for the outstanding Trust Securities Certificates.
(c) After the Liquidation Date, (i) the Trust Securities will no
longer be deemed to be Outstanding, (ii) certificates representing a Like
Amount of Debentures will be issued to Holders of Trust Securities
Certificates, upon surrender of such Trust Securities Certificates to the
Property Trustee or its agent for exchange, (iii) the Depositor shall use
its reasonable efforts to have the Debentures listed on the New York Stock
Exchange or on such other stock exchange or other organization as the
Preferred Securities are then listed or traded, (iv) any Trust Securities
Certificate not so surrendered for exchange will be deemed to represent a
Like Amount of Debentures, accruing interest at the rate provided for in
the Debentures from the last Distribution Date on which a Distribution was
made on such Trust Securities Certificate until such Trust Securities
Certificate shall be so surrendered (and until such Trust Securities
Certificates shall be so surrendered, no payments of interest or principal
will be made to Holders of such Trust Securities Certificates) and (v) all
rights of Securityholders will cease, except the right to receive
Debentures and payments of interest and principal received by the Trustee
with respect to the Debentures represented by Trust Security Certificates
not surrendered for exchange upon surrender of Trust Securities
Certificates.
(d) If at any time a Special Event shall occur and be
continuing, the Depositor may elect to (i) redeem the Debentures in whole
but not in part and therefore cause a mandatory redemption of all the
Preferred Securities at the Redemption Price within 90 days following the
occurrence of such Special Event, or (ii) cause the termination of the
Trust; provided, however, that, in the case of a Tax Event, any such
termination shall be conditioned upon receipt by the Administrative
Trustees of a No Recognition Opinion.
(e) In the event that, notwithstanding the other provisions of
this Section 9.04, whether because of an order for termination entered by a
court of competent jurisdiction or otherwise, distribution of the
Debentures in the manner provided herein is determined by the Property
Trustee not to be practical, the Trust Property shall be liquidated, and
the Trust shall be dissolved, wound-up or terminated by the Property
Trustee in such manner as the Property Trustee determines. In such event,
on the date of the dissolution, winding-up or other termination of the
Trust, Securityholders will be entitled to receive out of the assets of the
Trust available for distribution to Securityholders, after satisfaction of
all amounts due to creditors of the Trust, if any, as provided by
applicable law, an amount equal to the Liquidation Amount per Trust
Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If, upon any
such dissolution, winding up or termination, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then,
subject to the next succeeding sentence, the amounts payable by the Trust
on the Trust Securities shall be paid on a pro rata basis (based upon
Liquidation Amounts). The Holder of Common Securities will be entitled to
receive Liquidation Distributions upon any such dissolution, winding-up or
termination pro rata (determined as aforesaid) with Holders of Preferred
Securities, except that, if a Debenture Event of Default has occurred and
is continuing or if a Debenture Event of Default has not occurred solely by
reason of a requirement that time lapse or notice be given, the Liquidation
Distribution with respect to the Preferred Securities shall be paid in full
prior to the making of any Liquidation Distribution with respect to the
Common Securities.
SECTION 9.05. 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 substantially as an entirety to any corporation
or other Person, except pursuant to this Section 9.05. At the request of
the Depositor, with the consent of the Administrative Trustees and without
the consent of the Property Trustee or the Holders of the Preferred
Securities, the Trust may merge with or into, consolidate, amalgamate, be
replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of
any state; provided, however, that (i) such successor entity either (a)
expressly assumes all of the obligations of the Trust with respect to the
Preferred Securities or (b) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities
(the "Successor Securities") so long as the Successor Securities rank the
same as the Preferred Securities rank in priority with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii)
the Depositor expressly appoints a trustee of such successor entity
possessing substantially the same powers and duties as the Property Trustee
as the holder of the Debentures, (iii) the Successor Securities are listed
or traded, or any Successor Securities will be listed or traded upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any,
(iv) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Preferred 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 Preferred
Securities (including any Successor Securities) in any material respect,
(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 Depositor has received an
Opinion of Counsel 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
Preferred Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor any
successor entity will be required to register as an investment company
under the Investment Company Act and (viii) the Depositor 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% of the aggregate
Liquidation Amount of the Outstanding Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to any other
Person or permit any other Person to consolidate, amalgamate, merge with or
into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or the successor entity to be classified
as other than a grantor trust for United States Federal income tax
purposes.
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 10.01. GUARANTEE BY THE DEPOSITOR AND ASSUMPTION OF
OBLIGATIONS. Subject to the terms and conditions hereof, the Depositor
irrevocably and unconditionally guarantees to each Person to whom the Trust
is now or hereafter becomes indebted or liable (the "Beneficiaries"), and
agrees to assume liability for, the full payment, when and as due, of any
and all Obligations (as hereinafter defined) to such Beneficiaries. As
used herein, "Obligations" means any indebtedness, expenses or liabilities
of the Trust, other than obligations of the Trust to pay to Holders the
amounts due such Holders pursuant to the terms of the Trust Securities.
This guarantee and assumption is intended to be for the benefit, of, and to
be enforceable by, all such Beneficiaries, whether or not such
Beneficiaries have received notice hereof.
SECTION 10.02. LIMITATION OF RIGHTS OF SECURITYHOLDERS. The
death or incapacity of any person having an interest, beneficial or
otherwise, in a Trust Security shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such person or
any Securityholder for such person, to claim an accounting, take any action
or bring any proceeding in any court for a partition or winding up of the
arrangements contemplated hereby, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
SECTION 10.03. AMENDMENT. (a) This Trust Agreement may be
amended from time to time by the Property Trustee, a majority of the
Administrative Trustees and the Depositor, without the consent of any
Securityholders, (i) to cure any ambiguity, correct or supplement any
provision herein or therein which may be inconsistent with any other
provision herein or therein, or to make any other provisions with respect
to matters or questions arising under this Trust Agreement, which shall not
be inconsistent with the other provisions of this Trust Agreement;
provided, however, that such action shall not adversely affect in any
material respect the interests of any Securityholder, (ii) to modify,
eliminate or add to any provisions of this Trust Agreement to such extent
as shall be necessary to ensure that the Trust will not be classified for
United States federal income tax purposes other than as a "grantor trust"
at any time that any Trust Securities are Outstanding or to ensure the
Trust's exemption from the status of an "investment company" under the
Investment Company Act of 1940, as amended, or (iii) to effect the
acceptance of a successor Trustee's appointment. Any amendment of this
Trust Agreement pursuant to clause (i) above shall become effective only
when notice thereof shall have been given to the Securityholders.
(b) Except as provided in Sections 6.01(c) and 10.03(c), any
provision of this Trust Agreement may be amended by the Property Trustee, a
majority of Administrative Trustees and the Depositor with (i) the approval
of the Holders of at least a majority of the aggregate Liquidation Amount
of the Outstanding Trust 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 of an "investment
company" under the Investment Company Act of 1940, as amended; provided,
however, that, subject to Section 10.03(c), if any proposed amendment to
the Trust Agreement provides for, or the Trustees otherwise propose to
effect, (A) any action that would materially adversely affect the powers,
preferences or special rights of the Preferred Securities, whether by way
of amendment to the Trust Agreement or otherwise, or (B) the dissolution,
winding-up or termination of the Trust, other than pursuant to the terms of
this Trust Agreement, then such amendment or proposal shall not be
effective except with the approval of the Holders of at least 66 2/3% of
the aggregate Liquidation Amount of the Outstanding Preferred Securities.
(c) In addition to and notwithstanding any other provision in
this Trust Agreement, without the consent of each affected Securityholder
(such consent being obtained in accordance with Section 6.03 or 6.06), this
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, (ii) restrict the right of a
Securityholder to institute suit for the enforcement of any such payment on
or after such date or (iii) change the provisions of Section 10.03(c).
(d) Notwithstanding any other provisions of this Trust
Agreement, no Administrative Trustee shall enter into or consent to any
amendment to this Trust Agreement which would cause the Trust to fail or
cease to qualify for the exemption from status of an "investment company"
under the Investment Company Act of 1940, as amended, afforded by Rule 3a-5
thereunder.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the affected party, this Trust Agreement
may not be amended in a manner which imposes any additional obligation on
the Depositor or any Trustee.
(f) In the event there shall be that any amendment to this Trust
Agreement, the Administrative Trustees shall promptly provide to the
Depositor a copy of such amendment.
(g) The Trustees are entitled to receive an Opinion of Counsel
as conclusive evidence that any amendment to this Trust Agreement executed
pursuant to this Section 10.03 is authorized or permitted by, and conforms
to, the terms of this Section 10.03, has been duly authorized by and
lawfully executed and delivered on behalf of the other requisite parties,
and that it is proper for the Trustees under the provisions of this Section
10.03 to join in the execution thereof.
SECTION 10.04. SEPARABILITY. In case any provision in this
Trust Agreement or in the Trust Securities Certificates shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.05. GOVERNING LAW. This Trust Agreement and the
rights and obligations of each of the Securityholders, the Trust and the
Trustees with respect to this Trust Agreement and the Trust Securities
shall be construed in accordance with and governed by the laws of the State
of Delaware (without regard to conflict of laws principles).
SECTION 10.06. SUCCESSORS. This Trust Agreement shall be
binding upon and shall inure to the benefit of any successor to the Trust
or the Trustees, including any successor by operation of law.
SECTION 10.07. HEADINGS. The Article and Section headings are
for convenience only and shall not affect the construction of this Trust
Agreement.
SECTION 10.08. NOTICE AND DEMAND. (a) Any notice, demand or
other communication which by any provision of this Trust Agreement is
required or permitted to be given or served to or upon any Securityholder
or the Depositor may be given or served in writing by deposit thereof,
postage prepaid, in the United States mail, hand delivery or facsimile
transmission, in each case, addressed, (i) in the case of a Preferred
Securityholder, to such Preferred Securityholder as such Securityholder's
name and address may appear on the Securities Register and (ii) in the case
of the Common Securityholder or the Depositor, to Delmarva Power & Light
Company, 800 King Street, Wilmington, Delaware 19899, Attention: Treasurer,
facsimile no. (302) 429-3356, with a copy to the Secretary, facsimile no.
(302) 429-3367. Such notice, demand or other communication to or upon a
Securityholder shall be deemed to have been sufficiently given or made, for
all purposes, upon hand delivery, mailing or transmission.
(b) Any notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or
served to or upon the Trust, the Property Trustee or the Administrative
Trustees shall be given in writing addressed (until another address is
published by the Trust) as follows: (i) with respect to the Property
Trustee, 1100 North Market Street, Wilmington, Delaware 19890 marked
"Attention: Corporate Trust Administration" and (ii) with respect to the
Trust or the Administrative Trustees, at the address above for notice to
the Depositor, marked "Attention: Administrative Trustees for Delmarva
Power Financing I". Such notice, demand or other communication to or upon
the Trust or the Property Trustee shall be deemed to have been sufficiently
given or made only upon actual receipt of the writing by the Trust or the
Property Trustee.
SECTION 10.09. AGREEMENT NOT TO PETITION. Each of the Trustees
and the Depositor agrees for the benefit of the Securityholders that, until
at least one year and one day after the Trust has been terminated in
accordance with Article IX, it shall not file, or join in the filing of, a
petition against the Trust under any bankruptcy, reorganization,
arrangement, insolvency, liquidation or other similar law (including,
without limitation, the United States Bankruptcy Code) (collectively,
"Bankruptcy Laws") or otherwise join in the commencement of any proceeding
against the Trust under any Bankruptcy Law. In the event the Depositor
takes action in violation of this Section 10.09, the Property Trustee
agrees, for the benefit of Securityholders, that it shall file an answer
with the bankruptcy court or otherwise properly contest the filing of such
petition by the Depositor against the Trust or the commencement of such
action and raise the defense that the Depositor has agreed in writing not
to take such action and should be stopped and precluded therefrom and such
other defenses, if any, as counsel for the Property Trustee or the Trust
may assert. The provisions of this Section 10.09 shall survive the
termination of this Trust Agreement.
SECTION 10.10. CONFLICT WITH TRUST INDENTURE ACT. (a) If any
provision hereof limits, qualifies or conflicts with another provision
hereof which is required or deemed to be included in this Trust Agreement
by, or is otherwise governed by, any of the provisions of the Trust
Indenture Act, such other provisions shall control; and if any provision
hereof otherwise conflicts with the Trust Indenture Act, the Trust
Indenture Act shall control.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Trust Securities as equity
securities representing interests in the Trust.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE
UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A
BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS
OF THIS TRUST AGREEMENT AND THE SUBORDINATION PROVISIONS AND OTHER TERMS OF
THE GUARANTEE AND THE INDENTURE AND SHALL CONSTITUTE THE AGREEMENT OF THE
TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS AND PROVISIONS
SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH
SECURITYHOLDER AND SUCH OTHERS.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Trust Agreement to be duly
executed, all as of the day and year first above written.
DELMARVA POWER & LIGHT COMPANY
By:
-------------------------------------
Title:
WILMINGTON TRUST COMPANY,
as Property Trustee
By:
-------------------------------------
Title:
------------------------------------,
solely in his (her) capacity as
Administrative Trustee
------------------------------------
------------------------------------,
solely in his (her) capacity as
Administrative Trustee
------------------------------------
------------------------------------,
solely in his (her) capacity as
Administrative Trustee
------------------------------------
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
DELMARVA POWER FINANCING I
THIS CERTIFICATE OF TRUST of Delmarva Power Financing I (the
"Trust"), dated as of , 1996, is being duly executed and
filed by the undersigned, as trustees, to create a business trust under the
Delaware Business Trust Act (12 Del. C. Sec. 3801, et seq.).
------- ------
1. Name. The name of the business trust being created hereby is
Delmarva Power Financing I.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of
Delaware are as follows:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
3. Effective Date. This Certificate of Trust shall be effective
as of its filing.
IN WITNESS WHEREOF, the undersigned, being the only trustees of
the Trust, have executed this Certificate of Trust as of the date first
above written.
WILMINGTON TRUST COMPANY, ,
not in its individual capacity not in his (her) individual capacity
but solely as Trustee but solely as Trustee
By:
---------------------------- ---------------------------
Name:
Title:
<PAGE>
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-[ ]
Certificate Evidencing Common Securities
of
DELMARVA POWER FINANCING I
Common Securities
(Liquidation Amount $25 per Common Security)
Delmarva Power Financing I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies
that Delmarva Power & Light Company (the "Holder") is the registered owner
of the number set forth above of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust and
designated as Common Securities (Liquidation Amount $25 per Common
Security) (the "Common Securities"). In accordance with Section 5.02 of
the Trust Agreement (as defined below) the Common Securities are not
transferable and any attempted transfer hereof shall be void. The
designations, rights, privileges, restrictions, preferences and other terms
and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and
shall in all respects be subject to the terms and provisions of, the
Amended and Restated Trust Agreement of the Trust dated as of _______ ___,
1996, as the same may be amended from time to time (the "Trust Agreement").
The Trust will furnish a copy of the Trust Agreement to the holder of this
certificate without charge upon written request to the Trust at its
principal place of business or registered office.
Upon receipt of this certificate, the holder of this certificate
is bound by the Trust Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, an Administrative Trustee of the Trust has
executed this certificate for and on behalf of the Trust on this ____ day
of _________, 199__.
DELMARVA POWER FINANCING I
By:
--------------------------------------
not in his (her) individual
capacity, but solely as Administrative
Trustee
<PAGE>
EXHIBIT C
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of ________ ___, 1996, between Delmarva Power
& Light Company, a Delaware and Virginia corporation ("Delmarva Power"),
and Delmarva Power Financing I, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the
"Common Securities") to and receive Debentures from Delmarva Power and to
issue its ___% Cumulative Trust Preferred Capital Securities (the
"Preferred Securities") with such powers, preferences and special rights
and restrictions as are set forth in the Amended and Restated Trust
Agreement of the Trust dated as of ________ __, 1996 as the same may be
amended from time to time (the "Trust Agreement");
WHEREAS, Delmarva Power is the issuer of the Debentures;
NOW, THEREFORE, in consideration of the acceptance by each holder
of the Preferred Securities, which acceptance Delmarva Power hereby agrees
shall benefit Delmarva Power and which acceptance Delmarva Power
acknowledges will be made in reliance upon the execution and delivery of
this Agreement, Delmarva Power, including in its capacity as holder of the
Common Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.01. Assumption by Delmarva Power. Subject to the
----------------------------
terms and conditions hereof, Delmarva Power hereby irrevocably and
unconditionally assumes the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to each person or entity to whom the
Trust is now or hereafter becomes indebted or liable (the "Beneficiaries").
As used herein, "Obligations" means any indebtedness, expenses or
liabilities of the Trust, other than (a) obligations of the Trust to pay to
holders of any Preferred Securities or other similar interests in the Trust
the amounts due such holders pursuant to the terms of the Preferred
Securities or such other similar interests, as the case may be, and (b)
obligations arising out of the negligence, willful misconduct or bad faith
of the Trustees of the Trust. This Agreement is intended to be for the
benefit of, and to be enforceable by, all such Beneficiaries, whether or
not such Beneficiaries have received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall terminate
-----------------
and be of no further force and effect upon the date on which there are no
Beneficiaries remaining; provided, however, that this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at
any time any Beneficiary must restore payment of any sum paid on account of
any Obligation under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. Delmarva Power hereby waives
----------------
(a) notice of acceptance of this Agreement and of any Obligation to which
it may apply and (b) presentment, demand for payment, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices
and demands.
Section 1.04. No Impairment. The obligations, covenants,
-------------
agreements and duties of Delmarva Power under this Agreement shall in no
way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the extension of time for the payment by the Trust of all or
any portion of the Obligations or for the performance of any other
obligation under, arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part
of the Beneficiaries to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Beneficiaries with respect to the
Obligations or any action on the part of the Trust granting indulgence or
extension of any kind; or
(c) 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 Trust
or any of the assets of the Trust.
Neither the Trust nor any Beneficiary shall have any obligation to give
notice to, or obtain the consent of, Delmarva Power with respect to the
happening of any of the foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce this
-----------
Agreement directly against Delmarva Power and Delmarva Power waives any
right or remedy to require that any action be brought against the Trust or
any other person or entity before proceeding against Delmarva Power.
ARTICLE II
Section 2.01. Binding Effect. All of the obligations,
--------------
covenants, agreements and duties contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives of Delmarva
Power.
Section 2.02. Amendment. So long as there shall remain any
---------
Beneficiary or any Preferred Securities outstanding, this Agreement shall
not be modified or amended in any manner adverse to such Beneficiary or to
the holders of the Preferred Securities.
Section 2.03. Notices. Any notice, request or other
-------
communication required or permitted to be given hereunder shall be given in
writing by delivering the same against receipt therefor by facsimile
transmission (confirmed by mail), telex or by registered or certified mail,
addressed as follows (and if so given, shall be deemed given when mailed or
upon receipt of an answer-back, if sent by telex), to wit:
Delmarva Power Financing I
c/o Delmarva Power & Light Company, Treasury Department
800 King Street
Wilmington, Delaware 19899
Facsimile No.: (302) 429-3367
Attention: Administrative Trustees
Delmarva Power & Light Company
800 King Street
Wilmington, Delaware 19899
Facsimile No.: (302) 429-3367
Attention: Treasurer
Section 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES).
THIS AGREEMENT is executed as of the day and year first above
written.
DELMARVA POWER & LIGHT COMPANY
By:
----------------------------------------
Name:
Title:
DELMARVA POWER FINANCING I
By:
----------------------------------------
not in his (her) individual capacity,
but solely as Administrative Trustee
<PAGE>
[Clearing Agency Legend]
EXHIBIT D
Certificate Number Number of Preferred Securities
P- CUSIP NO.
Certificate Evidencing Preferred Securities
of
DELMARVA POWER FINANCING I
% Cumulative Trust Preferred Capital Securities
(Liquidation Amount $25 per Preferred Security)
Delmarva Power Financing I, 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 the number set
forth above of preferred securities of the Trust representing undivided
beneficial interests in the assets of the Trust and designated as __%
Cumulative Trust Preferred Capital Securities (Liquidation Amount $25 per
Preferred Security) (the "Preferred Securities"). The Preferred 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 as provided in the Trust Agreement (as
defined below). The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities are
set forth in, and this certificate and the Preferred Securities represented
hereby are issued and shall in all respects be subject to the terms and
provisions of, the Amended and Restated Trust Agreement of the Trust, dated
as of , 1996, as the same may be amended from time to
time (the "Trust Agreement"). The holder of this certificate is entitled
to the benefits of the Guarantee Agreement of Delmarva Power & Light
Company, a Delaware and Virginia corporation, and Wilmington Trust Company,
as guarantee trustee, dated as of , 1996 (the
"Guarantee"), to the extent provided therein. The Trust will furnish a
copy of the Trust Agreement and the Guarantee to the holder of this
certificate without charge upon written request to the Trust at its
principal place of business or registered office.
Upon receipt of this certificate, the holder of this certificate
is bound by the Trust Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the
Trust has executed this certificate for and on behalf of the Trust.
Dated:
DELMARVA POWER FINANCING I
By:
---------------------------------------
[ ]
not in his (her) individual
capacity, but solely as
Administrative Trustee
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(Insert address and zip code of assignee)
of the Preferred Securities represented by this Preferred Securities
Certificate and irrevocably appoints
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
attorney to transfer such Preferred Securities Certificate on the books of
the Trust. The attorney may substitute another to act for him or her.
Date:__________________
Signature:________________________
(Sign exactly as your name appears on the other side of this Preferred
Securities Certificate)
Signature:________________________
(Sign exactly as your name appears on the other side of this Preferred
Securities Certificate)
Exhibit 4-C
__________________________________________
DELMARVA POWER & LIGHT COMPANY
TO
WILMINGTON TRUST COMPANY
Trustee
_________
Indenture
(For Unsecured Subordinated Debt Securities
relating to Trust Securities)
Dated as of _______________, 1996
__________________________________________
<PAGE>
TABLE OF CONTENTS
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITAL OF THE COMPANY . . . . . . . . . . . . . . . . . 1
ARTICLE ONE Definitions and Other Provisions of General
Application . . . . . . . . . . . . . . . . . 1
SECTION 101. Definitions . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . 2
Additional Interest . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . 2
Authorized Officer . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . 3
Company Request or Company Order . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . 3
Dollar or $ . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . 3
Governmental Authority . . . . . . . . . . . . . 3
Government Obligations . . . . . . . . . . . . . 3
Guarantee . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . 4
Officer's Certificate . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . 4
Outstanding . . . . . . . . . . . . . . . . . . 4
Paying Agent . . . . . . . . . . . . . . . . . . 5
Person . . . . . . . . . . . . . . . . . . . . . 5
Place of Payment . . . . . . . . . . . . . . . . 5
Predecessor Security . . . . . . . . . . . . . . 5
Preferred Securities . . . . . . . . . . . . . . 6
Redemption Date . . . . . . . . . . . . . . . . 6
Redemption Price . . . . . . . . . . . . . . . . 6
Regular Record Date . . . . . . . . . . . . . . 6
Responsible Officer . . . . . . . . . . . . . . 6
Securities . . . . . . . . . . . . . . . . . . . 6
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE
DEEMED TO BE PART OF THE INDENTURE.
<PAGE>
Security Register and Security Registrar . . . . 6
Senior Indebtedness . . . . . . . . . . . . . . 6
Special Record Date . . . . . . . . . . . . . . 6
Stated Maturity . . . . . . . . . . . . . . . . 6
Trust . . . . . . . . . . . . . . . . . . . . . 7
Trust Agreement . . . . . . . . . . . . . . . . 7
Trust Indenture Act . . . . . . . . . . . . . . 7
Trustee . . . . . . . . . . . . . . . . . . . . 7
United States . . . . . . . . . . . . . . . . . 7
SECTION 102. Compliance Certificates and Opinions . 7
SECTION 103. Form of Documents Delivered to Trustee 8
SECTION 104. Acts of Holders . . . . . . . . . . . 9
SECTION 105. Notices, etc. to Trustee and Company 10
SECTION 106. Notice to Holders of Securities; Waiver
11
SECTION 107. Conflict with Trust Indenture Act . 12
SECTION 108. Effect of Headings and Table of
Contents . . . . . . . . . . . . . . 12
SECTION 109. Successors and Assigns . . . . . . . 12
SECTION 110. Separability Clause . . . . . . . . 12
SECTION 111. Benefits of Indenture . . . . . . . 12
SECTION 112. Governing Law . . . . . . . . . . . 13
SECTION 113. Legal Holidays . . . . . . . . . . . 13
ARTICLE TWO Security Forms . . . . . . . . . . . . . 13
SECTION 201. Forms Generally . . . . . . . . . . 13
SECTION 202. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . 14
ARTICLE THREE The Securities . . . . . . . . . . . . . 14
SECTION 301. Amount Unlimited; Issuable in Series 14
SECTION 302. Denominations . . . . . . . . . . . 17
SECTION 303. Execution, Authentication, Delivery and
Dating . . . . . . . . . . . . . . . 18
SECTION 304. Temporary Securities . . . . . . . . 19
SECTION 305. Registration, Registration of Transfer
and Exchange . . . . . . . . . . . . 20
SECTION 306. Mutilated, Destroyed, Lost and
Stolen Securities . . . . . . . . . 21
SECTION 307. Payment of Interest; Interest
Rights Preserved . . . . . . . . . . 22
SECTION 308. Persons Deemed Owners . . . . . . . 23
SECTION 309. Cancellation by Security
Registrar . . . . . . . . . . . . . 23
SECTION 310. Computation of Interest . . . . . . 24
SECTION 311. Extension of Interest Payment . . . 24
SECTION 312. Additional Interest . . . . . . . . 24
ARTICLE FOUR Redemption of Securities . . . . . . . . 25
SECTION 401. Applicability of Article . . . . . . 25
SECTION 402. Election to Redeem; Notice to
Trustee . . . . . . . . . . . . . . 25
SECTION 403. Selection of Securities to
Be Redeemed . . . . . . . . . . . . 25
SECTION 404. Notice of Redemption . . . . . . . . 26
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED
TO BE PART OF THE INDENTURE.
<PAGE>
SECTION 405. Securities Payable on Redemption
Date . . . . . . . . . . . . . . . . 27
SECTION 406. Securities Redeemed in Part . . . . 27
ARTICLE FIVE Sinking Funds . . . . . . . . . . . . . . 28
SECTION 501. Applicability of Article . . . . . . 28
SECTION 502. Satisfaction of Sinking Fund
Payments with Securities . . . . . . 28
SECTION 503. Redemption of Securities for
Sinking Fund . . . . . . . . . . . . 28
ARTICLE SIX Covenants . . . . . . . . . . . . . . . 29
SECTION 601. Payment of Principal, Premium
and Interest . . . . . . . . . . . . 29
SECTION 602. Maintenance of Office or Agency . . 29
SECTION 603. Money for Securities Payments
to Be Held in Trust . . . . . . . . 30
SECTION 604. Corporate Existence . . . . . . . . 31
SECTION 605. Maintenance of Properties . . . . . 31
SECTION 606. Annual Officer's Certificate as to
Compliance. . . . . . . . . . . . . 32
SECTION 607. Waiver of Certain Covenants . . . . 32
SECTION 608. Restriction on Payment of
Dividends . . . . . . . . . . . . . 32
SECTION 609. Maintenance of Trust Existence . . . 33
ARTICLE SEVEN Satisfaction and Discharge . . . . . . . 33
SECTION 701. Defeasance . . . . . . . . . . . . . 33
SECTION 702. Satisfaction and Discharge of
Indenture . . . . . . . . . . . . . 36
SECTION 703. Application of Trust Money . . . . . 36
ble on Redemption
Date . . . . . . . . . . . . . . . . 27
SECTION 406. Securities Redeemed in Part . . . . 27
ARTICLE FIVE Sinking Funds . . . . . . . . . . . . . . 28
SECTION 501. Applicability of Article . . . . . . 28
SECTION 502. Satisfaction of Sinking Fund
Payments with Securities . . . . . . 28
SECTION 503. Redemption of Securities for
Sinking Fund . . . . . . . . . . . . 28
ARTICLE SIX Covenants . . . . . . . . . . . . . 29
SECTION 601. Payment of Principal, Premium and
Interest . . . . . . . . . . . . . . 29
SECTION 602. Maintenance of Office or Agency . . 29
SECTION 603. Money for Securities Payments to Be
Held in Trust . . . . . . . . . . . 30
SECTION 604. Corporate Existence . . . . . . . . 31
SECTION 605. Maintenance of Properties . . . . . 31
SECTION 606. Annual Officer's Certificate as to
Compliance. . . . . . . . . . . . . 32
SECTION 607. Waiver of Certain Covenants . . . . 32
SECTION 608. Restriction on Payment of
Dividends . . . . . . . . . . . . . 32
SECTION 609. Maintenance of Trust Existence . . . 33
ARTICLE SEVEN Satisfaction and Discharge . . . . . . . 33
SECTION 701. Defeasance . . . . . . . . . . . . . 33
SECTION 702. Satisfaction and Discharge of
Indenture . . . . . . . . . . . . . 36
SECTION 703. Application of Trust Money . . . . . 36
ARTICLE EIGHT Events of Default; Remedies . . . . . . . 37
SECTION 801. Events of Default . . . . . . . . . 37
SECTION 802. Acceleration of Maturity;
Rescission and Annulment . . . . . . 38
SECTION 803. Collection of Indebtedness and
Suits for Enforcement by Trustee . . 40
SECTION 804. Trustee May File Proofs of Claim . . 40
SECTION 805. Trustee May Enforce Claims Without
Possession of Securities . . . . . . 41
SECTION 806. Application of Money Collected . . . 41
SECTION 807. Limitation on Suits . . . . . . . . 42
SECTION 808. Unconditional Right of
Holders to Receive Principal,
Premium and Interest . . . . . 43
SECTION 809. Restoration of Rights and Remedies . 43
SECTION 810. Rights and Remedies Cumulative . . . 43
SECTION 811. Delay or Omission Not Waiver . . . . 43
SECTION 812. Control by Holders of Securities . . 44
SECTION 813. Waiver of Past Defaults . . . . . . 44
SECTION 814. Undertaking for Costs . . . . . . . 44
SECTION 815. Waiver of Stay or Extension Laws . . 45
ARTICLE NINE The Trustee . . . . . . . . . . . . . . . 45
SECTION 901. Certain Duties and
Responsibilities . . . . . . . . . . 45
SECTION 902. Notice of Defaults . . . . . . . . . 46
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE
DEEMED PART OF THE INDENTURE.
<PAGE>
SECTION 903. Certain Rights of Trustee . . . . . 47
SECTION 904. Not Responsible for Recitals or
Issuance of Securities . . . . . . . 48
SECTION 905. May Hold Securities . . . . . . . . 48
SECTION 906. Money Held in Trust . . . . . . . . 48
SECTION 907. Compensation and Reimbursement . . . 48
SECTION 908. Disqualification; Conflicting
Interests. . . . . . . . . . . . . . 49
SECTION 909. Corporate Trustee Required;
Eligibility . . . . . . . . . . . . 50
SECTION 910. Resignation and Removal;
Appointment of Successor . . . . . . 50
SECTION 911. Acceptance of Appointment by
Successor . . . . . . . . . . . . . 52
SECTION 912. Merger, Conversion, Consolidation
or Succession to Business . . . . . 53
SECTION 913. Preferential Collection of Claims
Against Company . . . . . . . . . . 54
SECTION 914. Co-trustees and Separate Trustees. . 54
SECTION 915. Appointment of Authenticating
Agent . . . . . . . . . . . . . . . 55
ARTICLE TEN Holders' Lists and Reports by Trustee
and Company . . . . . . . . . . . . . . . 57
SECTION 1001. Lists of Holders . . . . . . . . . . 57
SECTION 1002. Reports by Trustee . . . . . . . . . 58
SECTION 1003. Reports to the Trustee . . . . . . . 58
ARTICLE ELEVEN Consolidation, Merger, Conveyance or
Other Transfer . . . . . . . . . . . . . 58
SECTION 1101. Company May Consolidate, etc., Only
on Certain Terms . . . . . . . . . . 58
SECTION 1102. Successor Corporation Substituted . 59
ARTICLE TWELVE Supplemental Indentures . . . . . . . . . 59
SECTION 1201. Supplemental Indentures Without
Consent of Holders . . . . . . . . . 59
SECTION 1202. Supplemental Indentures With
Consent of Holders . . . . . . . . . 61
SECTION 1203. Execution of Supplemental
Indentures . . . . . . . . . . . . . 62
SECTION 1204. Effect of Supplemental Indentures . 63
SECTION 1205. Conformity With Trust Indenture
Act . . . . . . . . . . . . . . . . 63
SECTION 1206. Reference in Securities to
Supplemental Indentures . . . . . . 63
SECTION 1207. Modification Without Supplemental
Indenture . . . . . . . . . . . . . 63
ARTICLE THIRTEEN Meetings of Holders; Action Without
Meeting . . . . . . . . . . . . . . 64
SECTION 1301. Purposes for Which Meetings May Be
Called . . . . . . . . . . . . . . . 64
SECTION 1302. Call, Notice and Place of Meetings . 64
SECTION 1303. Persons Entitled to Vote at
Meetings . . . . . . . . . . . . . . 65
SECTION 1304. Quorum; Action . . . . . . . . . . . 65
SECTION 1305. Attendance at Meetings;
Determination of Voting
Rights; Conduct and Adjournment
of Meetings . . . . . . . . . . 66
SECTION 1306. Counting Votes and Recording Action
of Meetings . . . . . . . . . . . . 67
SECTION 1307. Action Without Meeting . . . . . . . 67
ARTICLE FOURTEEN Immunity of Incorporators,
Stockholders, Officers and
Directors . . . . . . . . . . . . . 67
SECTION 1401. Liability Solely
Corporate . . . . . . . . . . . . . 67
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE
DEEMED PART OF THE INDENTURE.
<PAGE>
ARTICLE FIFTEEN Subordination of Securities . . . . 68
SECTION 1501. Securities Subordinate to Senior
Indebtedness. . . . . . . . . . . . 68
SECTION 1502. Payment Over of Proceeds of
Securities . . . . . . . . . . . . . 68
SECTION 1503. Disputes with Holders of Certain
Senior Indebtedness . . . . . . . . 70
SECTION 1504. Subrogation . . . . . . . . . . . . 71
SECTION 1505. Obligation of the Company
Unconditional . . . . . . . . . . . 71
SECTION 1506. Priority of Senior Indebtedness
Upon Maturity . . . . . . . . . . . 71
SECTION 1507. Trustee as Holder of Senior
Indebtedness . . . . . . . . . . . . 72
SECTION 1508. Notice to Trustee to Effectuate
Subordination . . . . . . . . . . . 72
SECTION 1509. Modification, Extension, etc. of
Senior Indebtedness . . . . . . . . 72
SECTION 1510. Trustee Has No Fiduciary Duty to
Holders of Senior Indebtedness . . . 73
SECTION 1511. Paying Agents Other Than the
Trustee . . . . . . . . . . . . . . 73
SECTION 1512. Rights of Holders of Senior
Indebtedness Not Impaired . . . . . 73
SECTION 1513. Effect of Subordination Provisions;
Termination . . . . . . . . . . . . 73
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . 74
Signatures and Seals . . . . . . . . . . . . . . . . . . . . 74
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . 75
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE
DEEMED TO BE PART OF THE INDENTURE.
<PAGE>
DELMARVA POWER & LIGHT COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF ____________, 1996
TRUST INDENTURE ACT SECTION INDENTURE SECTION
Section 310 (a)(1) . . . . . . . . . . . . . . . . . . . . 909
(a)(2) . . . . . . . . . . . . . . . . . . . . . . 909
(a)(3) . . . . . . . . . . . . . . . . . . . . . . 914
(a)(4) . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . 908
910
Section 311 (a) . . . . . . . . . . . . . . . . . . . . . 913
(b) . . . . . . . . . . . . . . . . . . . . . . . . 913
(c) . . . . . . . . . . . . . . . . . . . . . . . . 913
Section 312 (a) . . . . . . . . . . . . . . . . . . . . 1001
(b) . . . . . . . . . . . . . . . . . . . . . . . 1001
(c) . . . . . . . . . . . . . . . . . . . . . . . 1001
Section 313 (a) . . . . . . . . . . . . . . . . . . . . 1002
(b) . . . . . . . . . . . . . . . . . . . . . . . 1002
(c) . . . . . . . . . . . . . . . . . . . . . . . 1002
Section 314 (a) . . . . . . . . . . . . . . . . . . . . 1003
(a)(4) . . . . . . . . . . . . . . . . . . . . . . 606
(b) . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315 (a) . . . . . . . . . . . . . . . . . . . . . 901
903
(b) . . . . . . . . . . . . . . . . . . . . . . . . 902
(c) . . . . . . . . . . . . . . . . . . . . . . . . 901
(d) . . . . . . . . . . . . . . . . . . . . . . . . 901
(e) . . . . . . . . . . . . . . . . . . . . . . . . 814
Section 316 (a) . . . . . . . . . . . . . . . . . . . . . 812
813
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . 802
812
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . 813
(a)(2) . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . 808
Section 317 (a)(1) . . . . . . . . . . . . . . . . . . . . 803
(a)(2) . . . . . . . . . . . . . . . . . . . . . . 804
(b) . . . . . . . . . . . . . . . . . . . . . . . . 603
Section 318 (a) . . . . . . . . . . . . . . . . . . . . . 107
<PAGE>
INDENTURE, dated as of ____________, 1996, between
DELMARVA POWER & LIGHT COMPANY, a corporation duly organized and
existing under the laws of the States of Delaware and Virginia
(herein called the "Company"), having its principal office at 800
King Street, Wilmington, Delaware 19899, and WILMINGTON TRUST
COMPANY, a corporation of the State of Delaware, having its
principal corporate trust office at Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890, as Trustee
(herein called the "Trustee").
RECITAL OF THE COMPANY
The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time
to time of its unsecured subordinated debentures, notes or other
evidences of indebtedness (herein called the "Securities"), in an
unlimited aggregate principal amount to be issued in one or more
series as contemplated herein; and all acts necessary to make
this Indenture a valid agreement of the Company have been
performed.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires,
capitalized terms used herein shall have the meanings assigned to
them in Article One of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Securities or of any series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the
meanings assigned to them in this Article and include the
plural as well as the singular;
(b) all terms used herein without definition which are
defined in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them
therein;
(c) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with
generally accepted accounting principles in the United
States, and, except as otherwise herein expressly provided,
the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder
shall mean such accounting principles as are generally
accepted in the United States at the date of such
computation or, at the election of the Company from time to
time, at the date of the execution and delivery of this
Indenture; provided, however, that in determining generally
accepted accounting principles applicable to the Company,
the Company shall, to the extent required, conform to any
order, rule or regulation of any administrative agency,
regulatory authority or other governmental body having
jurisdiction over the Company; and
(d) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision.
Certain terms, used principally in Article Nine, are
defined in that Article.
"ACT", when used with respect to any Holder of a
Security, has the meaning specified in Section 104.
"ADDITIONAL INTEREST" has the meaning specified in
Section 312.
"AFFILIATE" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "CONTROL" when used
with respect to any specified Person means the power to direct
the management and policies of such Person, directly or through
one or more intermediaries, whether through the ownership of
voting securities, by contract or otherwise; and the terms
"CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.
"AUTHENTICATING AGENT" means any Person (other than the
Company or an Affiliate of the Company) authorized by the Trustee
pursuant to Section 915 to act on behalf of the Trustee to
authenticate one or more series of Securities.
"AUTHORIZED OFFICER" means the Chairman of the Board,
the President, any Vice President, the Treasurer, any Assistant
Treasurer, or any other officer or agent of the Company duly
authorized by the Board of Directors to act in respect of matters
relating to this Indenture.
"BOARD OF DIRECTORS" means either the board of
directors of the Company or any committee thereof duly authorized
to act in respect of matters relating to this Indenture.
"BOARD RESOLUTION" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"BUSINESS DAY", when used with respect to a Place of
Payment or any other particular location specified in the
Securities or this Indenture, means any day, other than a
Saturday or Sunday, which is not a day on which banking
institutions or trust companies in such Place of Payment or other
location are generally authorized or required by law, regulation
or executive order to remain closed, except as may be otherwise
specified as contemplated by Section 301.
"COMMISSION" means the Securities and Exchange
Commission, as from time to time constituted, created under the
Securities Exchange Act of 1934, as amended, or, if at any time
after the date of execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body, if any,
performing such duties at such time.
"COMPANY" means the Person named as the "Company" in
the first paragraph of this Indenture until a successor Person
shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter "Company" shall mean such
successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written
request or order signed in the name of the Company by an
Authorized Officer and delivered to the Trustee.
"CORPORATE TRUST OFFICE" means the office of the
Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the
date of execution and delivery of this Indenture is located at
Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890-0001, Attention: Corporate Trust Office.
"CORPORATION" means a corporation, association,
company, joint stock company or business trust.
"DEFAULTED INTEREST" has the meaning specified in
Section 307.
"DOLLAR" or "$" means a dollar or other equivalent unit
in such coin or currency of the United States as at the time
shall be legal tender for the payment of public and private
debts.
"EVENT OF DEFAULT" has the meaning specified in Section
801.
"GOVERNMENTAL AUTHORITY" means the government of the
United States or of any State or Territory thereof or of the
District of Columbia or of any county, municipality or other
political subdivision of any of the foregoing, or any department,
agency, authority or other instrumentality of any of the
foregoing.
"GOVERNMENT OBLIGATIONS" means:
(a) direct obligations of, or obligations the
principal of and interest on which are unconditionally
guaranteed by, the United States and entitled to the benefit
of the full faith and credit thereof; and
(b) certificates, depositary receipts or other
instruments which evidence a direct ownership interest in
obligations described in clause (a) above or in any specific
interest or principal payments due in respect thereof;
provided, however, that the custodian of such obligations or
specific interest or principal payments shall be a bank or
trust company (which may include the Trustee or any Paying
Agent) subject to Federal or state supervision or
examination with a combined capital and surplus of at least
$50,000,000; and provided, further, that except as may be
otherwise required by law, such custodian shall be obligated
to pay to the holders of such certificates, depositary
receipts or other instruments the full amount received by
such custodian in respect of such obligations or specific
payments and shall not be permitted to make any deduction
therefrom.
"GUARANTEE" means the guarantee agreement delivered from the
Company to a Trust, for the benefit of the holders of Preferred
Securities issued by such Trust.
"HOLDER" means a Person in whose name a Security is
registered in the Security Register.
"INDENTURE" means this instrument as originally executed and
delivered and as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall
include the terms of a particular series of Securities
established as contemplated by Section 301.
"INTEREST PAYMENT DATE", when used with respect to any
Security, means the Stated Maturity of an installment of interest
on such Security.
"MATURITY", when used with respect to any Security, means
the date on which the principal of such Security or an
installment of principal becomes due and payable as provided in
such Security or in this Indenture, whether at the Stated
Maturity, by declaration of acceleration, upon call for
redemption or otherwise.
"OFFICER'S CERTIFICATE" means a certificate signed by an
Authorized Officer and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who
may be counsel for the Company, or other counsel acceptable to
the Trustee.
"OUTSTANDING", when used with respect to Securities, means,
as of the date of determination, all Securities theretofore
authenticated and delivered under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities deemed to have been paid in accordance
with Section 701; and
(c) Securities which have been paid pursuant to
Section 306 or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of
which there shall have been presented to the Trustee proof
satisfactory to it and the Company that such Securities are
held by a bona fide purchaser or purchasers in whose hands
such Securities are valid obligations of the Company;
provided, however, that in determining whether or not the Holders
of the requisite principal amount of the Securities Outstanding
under this Indenture, or the Outstanding Securities of any
series, have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or whether or not a quorum is
present at a meeting of Holders of Securities, Securities owned
by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor (unless the
Company, such Affiliate or such obligor owns all Securities
Outstanding under this Indenture, or all Outstanding Securities
of each such series, as the case may be, determined without
regard to this provision) shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon any
such determination as to the presence of a quorum, only
Securities which the Trustee knows to be so owned shall be so
disregarded; provided, however, that Securities so owned which
have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and
that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other
obligor; and provided, further, that, in the case of any Security
the principal of which is payable from time to time without
presentment or surrender, the principal amount of such Security
that shall be deemed to be Outstanding at any time for all
purposes of this Indenture shall be the original principal amount
thereof less the aggregate amount of principal thereof
theretofore paid.
"PAYING AGENT" means any Person, including the Company,
authorized by the Company to pay the principal of, and premium,
if any, or interest, if any, on any Securities on behalf of the
Company.
"PERSON" means any individual, corporation, partnership,
joint venture, trust or unincorporated organization or any
Governmental Authority.
"PLACE OF PAYMENT", when used with respect to the Securities
of any series, means the place or places, specified as
contemplated by Section 301, at which, subject to Section 602,
principal of and premium, if any, and interest, if any, on the
Securities of such series are payable.
"PREDECESSOR SECURITY" of any particular Security means
every previous Security evidencing all or a portion of the same
debt as that evidenced by such particular Security; and, for the
purposes of this definition, any Security authenticated and
delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed (to
the extent lawful) to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.
"PREFERRED SECURITIES" means any preferred trust interests
issued by a Trust or similar securities issued by permitted
successors to such Trust in accordance with the Trust Agreement
pertaining to such Trust.
"REDEMPTION DATE", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture.
"REDEMPTION PRICE", when used with respect to any Security
to be redeemed, means the price at which it is to be redeemed
pursuant to this Indenture.
"REGULAR RECORD DATE" for the interest payable on any
Interest Payment Date on the Securities of any series means the
date specified for that purpose as contemplated by Section 301.
"RESPONSIBLE OFFICER", when used with respect to the
Trustee, means any officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"SECURITIES" has the meaning stated in the first recital of
this Indenture and more particularly means any securities
authenticated and delivered under this Indenture.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the
respective meanings specified in Section 305.
"SENIOR INDEBTEDNESS" means all obligations (other than non-
recourse obligations and the indebtedness issued under this
Indenture) of, or guaranteed or assumed by, the Company for
borrowed money, including both senior and subordinated
indebtedness for borrowed money (other than the Securities), or
for the payment of money relating to any lease which is
capitalized on the consolidated balance sheet of the Company and
its subsidiaries in accordance with generally accepted accounting
principles as in effect from time to time, or evidenced by bonds,
debentures, notes or other similar instruments, and in each case,
amendments, renewals, extensions, modifications and refundings of
any such indebtedness or obligations, whether existing as of the
date of this Indenture or subsequently incurred by the Company
unless, in the case of any particular indebtedness, renewal,
extension or refunding, the instrument creating or evidencing the
same or the assumption or guarantee of the same expressly
provides that such indebtedness, renewal, extension or refunding
is not superior in right of payment to or is pari passu with the
Securities; provided that the Company's obligations under the
Guarantee shall not be deemed to be Senior Indebtedness.
"SPECIAL RECORD DATE" for the payment of any Defaulted
Interest on the Securities of any series means a date fixed by
the Trustee pursuant to Section 307.
"STATED MATURITY", when used with respect to any obligation
or any installment of principal thereof or interest thereon,
means the date on which the principal of such obligation or such
installment of principal or interest is stated to be due and
payable (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension).
"TRUST" means Delmarva Power Financing I, a statutory
business trust created under the laws of the State of Delaware,
or any other Trust designated pursuant to Section 301 hereof or
any permitted successor under the Trust Agreement pertaining to
such Trust.
"TRUST AGREEMENT" means the Amended and Restated Trust
Agreement, dated as of ______________, 1996, relating to Delmarva
Power Financing I or an Amended and Restated Trust Agreement
relating to a Trust designated pursuant to Section 301 hereof, in
each case, among the Company, as Depositor, the trustees named
therein and several holders referred to therein as they may be
amended from time to time.
"TRUST INDENTURE ACT" means, as of any time, the Trust
Indenture Act of 1939, or any successor statute, as in effect at
such time.
"TRUSTEE" means the Person named as the "Trustee" in the
first paragraph of this Indenture until a successor Trustee shall
have become such with respect to one or more series of Securities
pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is
then a Trustee hereunder, and if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities
of that series.
"UNITED STATES" means the United States of America, its
Territories, its possessions and other areas subject to its
political jurisdiction.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided in this
Indenture, upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture,
the Company shall, if requested by the Trustee, furnish to the
Trustee an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the
proposed action (including any covenants compliance with which
constitutes a condition precedent) have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel
all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to
which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need
be furnished.
Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall
include:
(a) a statement that each Person signing such
certificate or opinion has read such covenant or condition
and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of
the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(c) a statement that, in the opinion of each such
Person, such Person has made such examination or
investigation as is necessary to enable such Person 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 Person, such condition or covenant has been complied
with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be
so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one
or several documents.
Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to the matters upon which such Officer's Certificate or
opinion are based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Company stating that the
information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instrument.
Whenever, subsequent to the receipt by the Trustee of
any Board Resolution, Officer's Certificate, Opinion of Counsel
or other document or instrument, a clerical, typographical or
other inadvertent or unintentional error or omission shall be
discovered therein, a new document or instrument may be
substituted therefor in corrected form with the same force and
effect as if originally filed in the corrected form and,
irrespective of the date or dates of the actual execution and/or
delivery thereof, such substitute document or instrument shall be
deemed to have been executed and/or delivered as of the date or
dates required with respect to the document or instrument for
which it is substituted. Anything in this Indenture to the
contrary notwithstanding, if any such corrective document or
instrument indicates that action has been taken by or at the
request of the Company which could not have been taken had the
original document or instrument not contained such error or
omission, the action so taken shall not be invalidated or
otherwise rendered ineffective but shall be and remain in full
force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the
generality of the foregoing, any Securities issued under the
authority of such defective document or instrument shall
nevertheless be the valid obligations of the Company entitled to
the benefits of this Indenture equally and ratably with all other
Outstanding Securities, except as aforesaid.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization,
direction, notice, consent, election, waiver or other action
provided by this Indenture to be made, given or taken by
Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing
or, alternatively, may be embodied in and evidenced by the
record of Holders voting in favor thereof, either in person
or by proxies duly appointed in writing, at any meeting of
Holders duly called and held in accordance with the
provisions of Article Thirteen, or a combination of such
instruments and any such record. Except as herein otherwise
expressly provided, such action shall become effective when
such instrument or instruments or record or both are
delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments
and any such record (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments
and so voting at any such meeting. Proof of execution of
any such instrument or of a writing appointing any such
agent, or of the holding by any Person of a Security, shall
be sufficient for any purpose of this Indenture and (subject
to Section 901) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
The record of any meeting of Holders shall be proved in the
manner provided in Section 1306.
(b) The fact and date of the execution by any Person
of any such instrument or writing may be proved by the
affidavit of a witness of such execution or by a certificate
of a notary public or other officer authorized by law to
take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged
to him the execution thereof or may be proved in any other
manner which the Trustee and the Company deem sufficient.
Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his
authority.
(c) The principal amount and serial numbers of
Securities held by any Person, and the date of holding the
same, shall be proved by the Security Register.
(d) Any request, demand, authorization, direction,
notice, consent, election, waiver or other Act of a Holder
shall bind every future Holder of the same Security and the
Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done
by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Security.
(e) Until such time as written instruments shall have
been delivered to the Trustee with respect to the requisite
percentage of principal amount of Securities for the action
contemplated by such instruments, any such instrument
executed and delivered by or on behalf of a Holder may be
revoked with respect to any or all of such Securities by
written notice by such Holder or any subsequent Holder,
proven in the manner in which such instrument was proven.
(f) Securities of any series authenticated and
delivered after any Act of Holders may, and shall if
required by the Trustee, bear a notation in form approved by
the Trustee as to any action taken by such Act of Holders.
If the Company shall so determine, new Securities of any
series so modified as to conform, in the opinion of the
Trustee and the Company, to such action may be prepared and
executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such
series.
(g) If the Company shall solicit from Holders any
request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, fix in
advance a record date for the determination of Holders
entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of
record at the close of business on the record date shall be
deemed to be Holders for the purposes of determining whether
Holders of the requisite proportion of the Outstanding
Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding
Securities shall be computed as of the record date.
SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice,
consent, election, waiver or Act of Holders or other document
provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with, the Trustee by any Holder or by the
Company, or the Company by the Trustee or by any Holder, shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and delivered personally to an
officer or other responsible employee of the addressee, or
transmitted by facsimile transmission or other direct written
electronic means to such telephone number or other electronic
communications address as the parties hereto shall from time to
time designate, or transmitted by certified or registered mail,
charges prepaid, to the applicable address set opposite such
party's name below or to such other address as either party
hereto may from time to time designate:
If to the Trustee, to:
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
If to the Company, to:
Delmarva Power & Light Company
800 King Street
Wilmington, Delaware 19899
Attention: Treasurer
Telephone: (302) 429-3011
Telecopy: (302) 429-3367
Any communication contemplated herein shall be deemed
to have been made, given, furnished and filed if personally
delivered, on the date of delivery, if transmitted by facsimile
transmission or other direct written electronic means, on the
date of transmission, and if transmitted by registered mail, on
the date of receipt.
SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER.
Except as otherwise expressly provided herein, where
this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given, and shall be deemed given, to
Holders if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at the address of such Holder
as it appears in the Security Register, not later than the latest
date, if any, and not earlier than the earliest date, if any,
prescribed for the giving of such notice.
In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable
to give such notice to Holders by mail, then such notification as
shall be made with the approval of the Trustee shall constitute a
sufficient notification for every purpose hereunder. In any case
where notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice
with respect to other Holders.
Any notice required by this Indenture may be waived in
writing by the Person entitled to receive such notice, either
before or after the event otherwise to be specified therein, and
such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Indenture limits, qualifies or
conflicts with another provision hereof which is required or
deemed to be included in this Indenture by, or is otherwise
governed by, any of the provisions of the Trust Indenture Act,
such other provision shall control; and if any provision hereof
otherwise conflicts with the Trust Indenture Act, the Trust
Indenture Act shall control.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings in this Indenture and
the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the
Company and Trustee shall bind their respective successors and
assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or the
Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Securities, express or
implied, shall give to any Person, other than the parties hereto,
their successors hereunder, the Holders and, so long as the
notice described in Section 1513 hereof has not been given, the
holders of Senior Indebtedness, any benefit or any legal or
equitable right, remedy or claim under this Indenture; provided,
however, that if the Property Trustee fails to enforce its rights
with respect to the Securities or the related Trust Agreement, a
holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce the Property Trustee's
rights with respect to the Securities or such Trust Agreement, to
the fullest extent permitted by law, without first instituting
any legal proceeding against the Property Trustee or any other
person or entity.
SECTION 112. GOVERNING LAW.
This Indenture and the Securities shall be governed by
and construed in accordance with the laws of the State of New
York, without regard to conflict of laws principles, except to
the extent that the law of any other jurisdiction shall be
mandatorily applicable.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption
Date or Stated Maturity of any Security shall not be a Business
Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Securities other than a
provision in Securities of any series, or in the Board Resolution
or Officer's Certificate which establishes the terms of the
Securities of such series, which specifically states that such
provision shall apply in lieu of this Section) payment of
interest or principal and premium, if any, need not be made at
such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment, except that if
such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day,
in each case with the same force and effect, and in the same
amount, as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity, as the case may be, and, if such
payment is made or duly provided for on such Business Day, no
interest shall accrue on the amount so payable for the period
from and after such Interest Payment Date, Redemption Date or
Stated Maturity, as the case may be, to such Business Day.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The definitive Securities of each series shall be in
substantially the form or forms thereof established in the
indenture supplemental hereto establishing such series or in a
Board Resolution establishing such series, or in an Officer's
Certificate pursuant to such supplemental indenture or Board
Resolution, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as
evidenced by their execution of the Securities. If the form or
forms of Securities of any series are established in a Board
Resolution or in an Officer's Certificate pursuant to a Board
Resolution, such Board Resolution and Officer's Certificate, if
any, shall be delivered to the Trustee at or prior to the
delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
Unless otherwise specified as contemplated by Section
301, the Securities of each series shall be issuable in
registered form without coupons. The definitive Securities shall
be produced in such manner as shall be determined by the officers
executing such Securities, as evidenced by their execution
thereof.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in
substantially the form set forth below:
This is one of the Securities of the series
designated therein referred to in the within-
mentioned Indenture.
------------------------------
as Trustee
By:
---------------------------
Authorized Signatory
ARTICLE THREE
THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may
be authenticated and delivered under this Indenture is unlimited;
provided, however, that all Securities shall be issued to a Trust
in exchange for securities of the Company or to evidence loans by
a Trust of the proceeds of the issuance of Preferred Securities
of such Trust plus the amount deposited by the Company with such
Trust from time to time.
The Securities may be issued in one or more series.
Prior to the authentication and delivery of Securities of any
series there shall be established by specification in a
supplemental indenture or in a Board Resolution, or in an
Officer's Certificate pursuant to a supplemental indenture or a
Board Resolution:
(a) the title of the Securities of such series (which
shall distinguish the Securities of such series from
Securities of all other series);
(b) any limit upon the aggregate principal amount of
the Securities of such series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of
such series pursuant to Section 304, 305, 306, 406 or 1206
and except for any Securities which, pursuant to Section
303, are deemed never to have been authenticated and
delivered hereunder);
(c) the Person or Persons (without specific
identification) to whom interest on Securities of such
series shall be payable on any Interest Payment Date, if
other than the Persons in whose names such Securities (or
one or more Predecessor Securities) are registered at the
close of business on the Regular Record Date for such
interest;
(d) the date or dates on which the principal of the
Securities of such series is payable or any formulary or
other method or other means by which such date or dates
shall be determined, by reference or otherwise (without
regard to any provisions for redemption, prepayment,
acceleration, purchase or extension);
(e) the rate or rates at which the Securities of such
series shall bear interest, if any (including the rate or
rates at which overdue principal shall bear interest, if
different from the rate or rates at which such Securities
shall bear interest prior to Maturity, and, if applicable,
the rate or rates at which overdue premium or interest shall
bear interest, if any), or any formulary or other method or
other means by which such rate or rates shall be determined,
by reference or otherwise; the date or dates from which such
interest shall accrue; the Interest Payment Dates on which
such interest shall be payable and the Regular Record Date,
if any, for the interest payable on such Securities on any
Interest Payment Date; the right of the Company, if any, to
extend the interest payment periods and the duration of any
such extension as contemplated by Section 311; and the basis
of computation of interest, if other than as provided in
Section 310;
(f) the place or places at which or methods by which
(i) the principal of and premium, if any, and interest, if
any, on Securities of such series shall be payable, (ii)
registration of transfer of Securities of such series may be
effected, (iii) exchanges of Securities of such series may
be effected and (iv) notices and demands to or upon the
Company in respect of the Securities of such series and this
Indenture may be served; the Security Registrar for such
series; and if such is the case, that the principal of such
Securities shall be payable without presentment or surrender
thereof;
(g) the period or periods within which, or the date or
dates on which, the price or prices at which and the terms
and conditions upon which the Securities of such series may
be redeemed, in whole or in part, at the option of the
Company and any restrictions on such redemptions, including
but not limited to a restriction on a partial redemption by
the Company of the Securities of any series, resulting in
delisting of such Securities from any national exchange;
(h) the obligation or obligations, if any, of the
Company to redeem or purchase the Securities of such series
pursuant to any sinking fund or other mandatory redemption
provisions or at the option of a Holder thereof and the
period or periods within which or the date or dates on
which, the price or prices at which and the terms and
conditions upon which such Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation,
and applicable exceptions to the requirements of Section 404
in the case of mandatory redemption or redemption at the
option of the Holder;
(i) the denominations in which Securities of such
series shall be issuable if other than denominations of $25
and any integral multiple thereof;
(j) the currency or currencies, including composite
currencies, in which payment of the principal of and
premium, if any, and interest, if any, on the Securities of
such series shall be payable (if other than in Dollars);
(k) if the principal of or premium, if any, or
interest, if any, on the Securities of such series are to be
payable, at the election of the Company or a Holder thereof,
in a coin or currency other than that in which the
Securities are stated to be payable, the period or periods
within which and the terms and conditions upon which, such
election may be made;
(l) if the principal of or premium, if any, or
interest, if any, on the Securities of such series are to be
payable, or are to be payable at the election of the Company
or a Holder thereof, in securities or other property, the
type and amount of such securities or other property, or the
formulary or other method or other means by which such
amount shall be determined, and the period or periods within
which, and the terms and conditions upon which, any such
election may be made;
(m) if the amount payable in respect of principal of
or premium, if any, or interest, if any, on the Securities
of such series may be determined with reference to an index
or other fact or event ascertainable outside this Indenture,
the manner in which such amounts shall be determined to the
extent not established pursuant to clause (e) of this
paragraph;
(n) if other than the principal amount thereof, the
portion of the principal amount of Securities of such series
which shall be payable upon declaration of acceleration of
the Maturity thereof pursuant to Section 802;
(o) any Events of Default, in addition to those
specified in Section 801, with respect to the Securities of
such series, and any covenants of the Company for the
benefit of the Holders of the Securities of such series, in
addition to those set forth in Article Six;
(p) the terms, if any, pursuant to which the
Securities of such series may be converted into or exchanged
for shares of capital stock or other securities of the
Company or any other Person;
(q) the obligations or instruments, if any, which
shall be considered to be Government Obligations in respect
of the Securities of such series denominated in a currency
other than Dollars or in a composite currency, and any
additional or alternative provisions for the reinstatement
of the Company's indebtedness in respect of such Securities
after the satisfaction and discharge thereof as provided in
Section 701;
(r) if the Securities of such series are to be issued
in global form, (i) any limitations on the rights of the
Holder or Holders of such Securities to transfer or exchange
the same or to obtain the registration of transfer thereof,
(ii) any limitations on the rights of the Holder or Holders
thereof to obtain certificates therefor in definitive form
in lieu of temporary form and (iii) any and all other
matters incidental to such Securities;
(s) if the Securities of such series are to be
issuable as bearer securities, any and all matters
incidental thereto which are not specifically addressed
in a supplemental indenture as contemplated by clause
(g) of Section 1201;
(t) to the extent not established pursuant to clause
(r) of this paragraph, any limitations on the rights of the
Holders of the Securities of such Series to transfer or
exchange such Securities or to obtain the registration of
transfer thereof; and if a service charge will be made for
the registration of transfer or exchange of Securities of
such series the amount or terms thereof;
(u) any exceptions to Section 113, or variation in the
definition of Business Day, with respect to the Securities
of such series;
(v) the designation of the Trust to which Securities
of such series are to be issued; and
(w) any other terms of the Securities of such series
not inconsistent with the provisions of this Indenture.
All Securities of any one series shall be substantially
identical, except as to principal amount and date of issue and
except as may be set forth in the terms of such series as
contemplated above. The Securities of each series shall be
subordinated in right of payment to Senior Indebtedness as
provided in Article Fifteen.
SECTION 302. DENOMINATIONS.
Unless otherwise provided as contemplated by Section
301 with respect to any series of Securities, the Securities of
each series shall be issuable in denominations of $25 and any
integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Unless otherwise provided as contemplated by Section
301 with respect to any series of Securities, the Securities
shall be executed on behalf of the Company by an Authorized
Officer and may have the corporate seal of the Company affixed
thereto or reproduced thereon attested by any other Authorized
Officer or by the Secretary or an Assistant Secretary of the
Company. The signature of any or all of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures
of individuals who were at the time of execution Authorized
Officers or the Secretary or an Assistant Secretary of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Securities or did not
hold such offices at the date of original issue of such
Securities.
The Trustee shall authenticate and deliver Securities
of a series, for original issue, at one time or from time to time
in accordance with the Company Order referred to below, upon
receipt by the Trustee of:
(a) the instrument or instruments establishing the
form or forms and terms of such series, as provided in
Sections 201 and 301;
(b) a Company Order requesting the authentication and
delivery of such Securities and, to the extent that the
terms of such Securities shall not have been established in
an indenture supplemental hereto or in a Board Resolution,
or in an Officer's Certificate pursuant to a supplemental
indenture or Board Resolution, all as contemplated by
Sections 201 and 301, establishing such terms;
(c) the Securities of such series, executed on behalf
of the Company by an Authorized Officer;
(d) an Opinion of Counsel to the effect that:
(i) the form or forms of such Securities have
been duly authorized by the Company and have been
established in conformity with the provisions of this
Indenture;
(ii) the terms of such Securities have been duly
authorized by the Company and have been established in
conformity with the provisions of this Indenture; and
(iii) such Securities, when authenticated and
delivered by the Trustee and issued and delivered by
the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will have been
duly issued under this Indenture and will constitute
valid and legally binding obligations of the Company,
entitled to the benefits provided by this Indenture,
and enforceable in accordance with their terms,
subject, as to enforcement, to laws relating to or
affecting generally the enforcement of creditors'
rights, including, without limitation, bankruptcy and
insolvency laws and to general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at law).
If the form or terms of the Securities of any series
have been established by or pursuant to a Board Resolution or an
Officer's Certificate as permitted by Sections 201 or 301, the
Trustee shall not be required to authenticate such Securities if
the issuance of such Securities pursuant to this Indenture will
materially or adversely affect the Trustee's own rights, duties
or immunities under the Securities and this Indenture or
otherwise in a manner that is not reasonably acceptable to the
Trustee.
Unless otherwise specified as contemplated by Section
301 with respect to any series of Securities, each Security shall
be dated the date of its authentication.
Unless otherwise specified as contemplated by Section
301 with respect to any series of Securities, no Security shall
be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form
provided for herein executed by the Trustee or an Authenticating
Agent by manual signature, and such certificate upon any Security
shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and
is entitled to the benefits of this Indenture. Notwithstanding
the foregoing, if any Security shall have been authenticated and
delivered hereunder to the Company, or any Person acting on its
behalf, but shall never have been issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written
statement (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) stating that such Security
has never been issued and sold by the Company, for all purposes
of this Indenture such Security shall be deemed never to have
been authenticated and delivered hereunder and shall never be
entitled to the benefits hereof.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities
which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially
of the tenor of the definitive Securities in lieu of which they
are issued, with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such
Securities; provided, however, that temporary Securities need not
recite specific redemption, sinking fund, conversion or exchange
provisions.
Unless otherwise specified as contemplated by Section
301 with respect to the Securities of any series, after the
preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable,
without charge to the Holder thereof, for definitive Securities
of such series upon surrender of such temporary Securities at the
office or agency of the Company maintained pursuant to Section
602 in a Place of Payment for such Securities. Upon such
surrender of temporary Securities for such exchange, the Company
shall, except as aforesaid, execute and the Trustee shall
authenticate and deliver in exchange therefor definitive
Securities of the same series, of authorized denominations and of
like tenor and aggregate principal amount.
Until exchanged in full as hereinabove provided, the
temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive
Securities of the same series and of like tenor authenticated and
delivered hereunder.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND
EXCHANGE.
The Company shall cause to be kept in each office
designated pursuant to Section 602, with respect to the
Securities of each series, a register (all registers kept in
accordance with this Section being collectively referred to as
the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for
the registration of Securities of such series and the
registration of transfer thereof. The Company shall designate
one Person to maintain the Security Register for the Securities
of each series on a consolidated basis, and such Person is
referred to herein, with respect to such series, as the "Security
Registrar." Anything herein to the contrary notwithstanding, the
Company may designate one or more of its offices as an office in
which a register with respect to the Securities of one or more
series shall be maintained, and the Company may designate itself
the Security Registrar with respect to one or more of such
series. The Security Register shall be open for inspection by
the Trustee and the Company at all reasonable times.
Except as otherwise specified as contemplated by
Section 301 with respect to the Securities of any series, upon
surrender for registration of transfer of any Security of such
series at the office or agency of the Company maintained pursuant
to Section 602 in a Place of Payment for such series, the Company
shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more
new Securities of the same series, of authorized denominations
and of like tenor and aggregate principal amount.
Except as otherwise specified as contemplated by
Section 301 with respect to the Securities of any series, any
Security of such series may be exchanged at the option of the
Holder, for one or more new Securities of the same series, of
authorized denominations and of like tenor and aggregate
principal amount, upon surrender of the Securities to be
exchanged at any such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
All Securities delivered upon any registration of
transfer or exchange of Securities shall be valid obligations of
the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Securities surrendered upon
such registration of transfer or exchange.
Every Security presented or surrendered for
registration of transfer or for exchange shall (if so required by
the Company, the Trustee or the Security Registrar) be duly
endorsed or shall be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Trustee or the
Security Registrar, as the case may be, duly executed by the
Holder thereof or his attorney duly authorized in writing.
Unless otherwise specified as contemplated by Section
301 with respect to Securities of any series, no service charge
shall be made for any registration of transfer or exchange of
Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in connection with any registration of transfer or
exchange of Securities, other than exchanges pursuant to Section
304, 406 or 1206 not involving any transfer.
The Company shall not be required to execute or to
provide for the registration of transfer of or the exchange of
(a) Securities of any series during a period of 15 days
immediately preceding the date of the mailing of any notice of
redemption of such Securities called for redemption or (b) any
Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the
Trustee, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of
the same series, and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the
Trustee (a) evidence to their satisfaction of the ownership of
and the destruction, loss or theft of any Security and (b) such
security or indemnity as may be reasonably required by them to
save each of them and any agent of either of them harmless, then,
in the absence of notice to the Company or the Trustee that such
Security is held by a Person purporting to be the owner of such
Security, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security, a new Security of the same series, and of like
tenor and principal amount and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing, in case any such
mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this
Section, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to
this Section in lieu of any destroyed, lost or stolen Security
shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone other than
the Holder of such new Security, and any such new Security shall
be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of such series
duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise specified as contemplated by Section
301 with respect to the Securities of any series, interest on any
Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular
Record Date for such interest.
Subject to Section 311, any interest on any Security of
any series which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the
Holder on the related Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (a)
or (b) below:
(a) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on a
date (herein called a "Special Record Date") for the payment
of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be
paid on each Security of such series and the date of the
proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit on or prior to the date of
the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon
the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the
Company, shall promptly cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each
Holder of Securities of such series at the address of such
Holder as it appears in the Security Register, not less than
10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such
Special Record Date.
(b) The Company may make payment of any Defaulted
Interest on the Securities of any series in any other lawful
manner not inconsistent with the requirements of any
securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and
Section 305, each Security delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any
other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration
of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such
Security is registered as the absolute owner of such Security for
the purpose of receiving payment of principal of and premium, if
any, and (subject to Sections 305 and 307) interest, if any, on
such Security and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. CANCELLATION BY SECURITY REGISTRAR.
All Securities surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any
Person other than the Security Registrar, be delivered to the
Security Registrar and, if not theretofore canceled, shall be
promptly canceled by the Security Registrar. The Company may at
any time deliver to the Security Registrar for cancellation any
Securities previously authenticated and delivered hereunder which
the Company may have acquired in any manner whatsoever or which
the Company shall not have issued and sold, and all Securities so
delivered shall be promptly canceled by the Security Registrar.
No Securities shall be authenticated in lieu of or in exchange
for any Securities canceled as provided in this Section, except
as expressly permitted by this Indenture. All canceled
Securities held by the Security Registrar shall be disposed of in
accordance with a Company Order delivered to the Security
Registrar and the Trustee, and the Security Registrar shall
promptly deliver a certificate of disposition to the Trustee and
the Company unless, by a Company Order, similarly delivered, the
Company shall direct that canceled Securities be returned to it.
The Security Registrar shall promptly deliver evidence of any
cancellation of a Security in accordance with this Section 309 to
the Trustee and the Company.
SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by
Section 301 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a
360-day year consisting of twelve 30-day months and for any
period shorter than a full month, on the basis of the actual
number of days elapsed in such period.
SECTION 311. EXTENSION OF INTEREST PAYMENT.
The Company shall have the right at any time, so long
as the Company is not in default in the payment of interest on
the Securities of any series hereunder, to extend interest
payment periods on all Securities of one or more series, if so
specified as contemplated by Section 301 with respect to such
Securities and upon such terms as may be specified as
contemplated by Section 301 with respect to such Securities.
SECTION 312. ADDITIONAL INTEREST.
So long as any Preferred Securities remain outstanding,
if the Trust which issued such Preferred Securities shall be
required to pay, with respect to its income derived from the
interest payments on the Securities of any series, any amounts
for or on account of any taxes, duties, assessments or
governmental charges of whatever nature imposed by the United
States, or any other taxing authority, then, in any such case,
the Company will pay as interest on such series such additional
interest ("Additional Interest") as may be necessary in order
that the net amounts received and retained by such Trust after
the payment of such taxes, duties, assessments or governmental
charges shall result in such Trust's having such funds as it
would have had in the absence of the payment of such taxes,
duties, assessments or governmental charges.
ARTICLE FOUR
REDEMPTION OF SECURITIES
SECTION 401. APPLICABILITY OF ARTICLE.
Securities of any series which are redeemable before
their Stated Maturity shall be redeemable in accordance with
their terms and (except as otherwise specified as contemplated by
Section 301 for Securities of such series) in accordance with
this Article.
SECTION 402. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities
shall be evidenced by a Board Resolution or an Officer's
Certificate. The Company shall, at least 45 days prior to the
Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date and of the principal amount of
such Securities to be redeemed. In the case of any redemption of
Securities (a) prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere
in this Indenture or (b) pursuant to an election of the Company
which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an
Officer's Certificate evidencing compliance with such restriction
or condition.
SECTION 403. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series are to be
redeemed, the particular Securities to be redeemed shall be
selected by the Trustee from the Outstanding Securities of such
series not previously called for redemption, by such method as
shall be provided for any particular series, or, in the absence
of any such provision, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized
denomination for Securities of such series or any integral
multiple thereof) of the principal amount of Securities of such
series of a denomination larger than the minimum authorized
denomination for Securities of such series; provided, however,
that if, as indicated in an Officer's Certificate, the Company
shall have offered to purchase all or any principal amount of the
Securities then Outstanding of any series, and less than all of
such Securities as to which such offer was made shall have been
tendered to the Company for such purchase, the Trustee, if so
directed by Company Order, shall select for redemption all or any
principal amount of such Securities which have not been so
tendered.
The Trustee shall promptly notify the Company and the
Security Registrar in writing of the Securities selected for
redemption and, in the case of any Securities selected to be
redeemed in part, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed
or to be redeemed only in part, to the portion of the principal
amount of such Securities which has been or is to be redeemed.
SECTION 404. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner
provided in Section 106 to the Holders of the Securities to be
redeemed not less than 30 nor more than 60 days prior to the
Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Securities of any series are
to be redeemed, the identification of the particular
Securities to be redeemed and the portion of the principal
amount of any Security to be redeemed in part,
(d) that on the Redemption Date the Redemption Price,
together with accrued interest, if any, to the Redemption
Date, will become due and payable upon each such Security to
be redeemed and, if applicable, that interest thereon will
cease to accrue on and after said date,
(e) the place or places where such Securities are to
be surrendered for payment of the Redemption Price and
accrued interest, if any, unless it shall have been
specified as contemplated by Section 301 with respect to
such Securities that such surrender shall not be required,
(f) that the redemption is for a sinking or other
fund, if such is the case, and
(g) such other matters as the Company shall deem
desirable or appropriate.
Unless otherwise specified with respect to any
Securities in accordance with Section 301, with respect to any
notice of redemption of Securities at the election of the
Company, unless, upon the giving of such notice, such Securities
shall be deemed to have been paid in accordance with Section 701,
such notice may state that such redemption shall be conditional
upon the receipt by the Paying Agent or Agents for such
Securities, on or prior to the date fixed for such redemption, of
money sufficient to pay the principal of and premium, if any, and
interest, if any, on such Securities and that if such money shall
not have been so received such notice shall be of no force or
effect and the Company shall not be required to redeem such
Securities. In the event that such notice of redemption contains
such a condition and such money is not so received, the
redemption shall not be made and within a reasonable time
thereafter notice shall be given, in the manner in which the
notice of redemption was given, that such money was not so
received and such redemption was not required to be made, and the
Paying Agent or Agents for the Securities otherwise to have been
redeemed shall promptly return to the Holders thereof any of such
Securities which had been surrendered for payment upon such
redemption.
Notice of redemption of Securities to be redeemed at
the election of the Company, and any notice of non-satisfaction
of a condition for redemption as aforesaid, shall be given by the
Company or, at the Company's request, by the Security Registrar
in the name and at the expense of the Company. Notice of
mandatory redemption of Securities shall be given by the Security
Registrar in the name and at the expense of the Company.
SECTION 405. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid,
and the conditions, if any, set forth in such notice having been
satisfied, the Securities or portions thereof so to be redeemed
shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date
(unless, in the case of an unconditional notice of redemption,
the Company shall default in the payment of the Redemption Price
and accrued interest, if any) such Securities or portions
thereof, if interest-bearing, shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with
such notice, such Security or portion thereof shall be paid by
the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided, however, that
no such surrender shall be a condition to such payment if so
specified as contemplated by Section 301 with respect to such
Security; and provided, further, that except as otherwise
specified as contemplated by Section 301 with respect to such
Security, any installment of interest on any Security the Stated
Maturity of which installment is on or prior to the Redemption
Date shall be payable to the Holder of such Security, or one or
more Predecessor Securities, registered as such at the close of
business on the related Regular Record Date according to the
terms of such Security and subject to the provisions of Section
307.
SECTION 406. SECURITIES REDEEMED IN PART.
Upon the surrender of any Security which is to be
redeemed only in part at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or
his attorney duly authorized in writing), the Company shall
execute, and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, a new Security
or Securities of the same series, of any authorized denomination
requested by such Holder and of like tenor and in aggregate
principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.
ARTICLE FIVE
SINKING FUNDS
SECTION 501. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to
any sinking fund for the retirement of the Securities of any
series, except as otherwise specified as contemplated by Section
301 for Securities of such series.
The minimum amount of any sinking fund payment provided
for by the terms of Securities of any series is herein referred
to as a "mandatory sinking fund payment," and any payment in
excess of such minimum amount provided for by the terms of
Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of
Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 502.
Each sinking fund payment shall be applied to the redemption of
Securities of the series in respect of which it was made as
provided for by the terms of such Securities.
SECTION 502. SATISFACTION OF SINKING FUND PAYMENTS WITH
SECURITIES.
The Company (a) may deliver to the Trustee Outstanding
Securities (other than any previously called for redemption) of a
series in respect of which a mandatory sinking fund payment is to
be made and (b) may apply as a credit Securities of such series
which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant
to the terms of such Securities or Outstanding Securities
purchased by the Company, in each case in satisfaction of all or
any part of such mandatory sinking fund payment with respect to
the Securities of such series; provided, however, that no
Securities shall be applied in satisfaction of a mandatory
sinking fund payment if such Securities shall have been
previously so applied. Securities so applied shall be received
and credited for such purpose by the Trustee at the Redemption
Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such mandatory
sinking fund payment shall be reduced accordingly.
SECTION 503. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund
payment date for the Securities of any series, the Company shall
deliver to the Trustee an Officer's Certificate specifying:
(a) the amount of the next succeeding mandatory
sinking fund payment for such series;
(b) the amount, if any, of the optional sinking fund
payment to be made together with such mandatory sinking fund
payment;
(c) the aggregate sinking fund payment;
(d) the portion, if any, of such aggregate sinking
fund payment which is to be satisfied by the payment of
cash;
(e) the portion, if any, of such aggregate sinking
fund payment which is to be satisfied by delivering and
crediting Securities of such series pursuant to Section 502
and stating the basis for such credit and that such
Securities have not previously been so credited, and the
Company shall also deliver to the Trustee any Securities to
be so delivered. If the Company shall not deliver such
Officer's Certificate, the next succeeding sinking fund
payment for such series shall be made entirely in cash in
the amount of the mandatory sinking fund payment. Not less
than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section
403 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the
manner provided in Section 404. Such notice having been
duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 405 and
406.
ARTICLE SIX
COVENANTS
SECTION 601. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall pay the principal of and premium, if
any, and interest, if any (including Additional Interest), on the
Securities of each series in accordance with the terms of such
Securities and this Indenture.
SECTION 602. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment for
the Securities of each series an office or agency where payment
of such Securities shall be made, where the registration of
transfer or exchange of such Securities may be effected and where
notices and demands to or upon the Company in respect of such
Securities and this Indenture may be served. The Company shall
give prompt written notice to the Trustee of the location, and
any change in the location, of each such office or agency and
prompt notice to the Holders of any such change in the manner
specified in Section 106. If at any time the Company shall fail
to maintain any such required office or agency in respect of
Securities of any series, or shall fail to furnish the Trustee
with the address thereof, payment of such Securities shall be
made, registration of transfer or exchange thereof may be
effected and notices and demands in respect thereof may be served
at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent for all such purposes in
any such event.
The Company may also from time to time designate one or
more other offices or agencies with respect to the Securities of
one or more series, for any or all of the foregoing purposes and
may from time to time rescind such designations; provided,
however, that, unless otherwise specified as contemplated by
Section 301 with respect to the Securities of such series, no
such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency for
such purposes in each Place of Payment for such Securities in
accordance with the requirements set forth above. The Company
shall give prompt written notice to the Trustee, and prompt
notice to the Holders in the manner specified in Section 106, of
any such designation or rescission and of any change in the
location of any such other office or agency.
Anything herein to the contrary notwithstanding, any
office or agency required by this Section may be maintained at an
office of the Company, in which event the Company shall perform
all functions to be performed at such office or agency.
SECTION 603. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying
Agent with respect to the Securities of any series, it shall, on
or before each due date of the principal of and premium, if any,
and interest, if any, on any of such Securities, segregate and
hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and premium or interest so
becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided. The Company shall
promptly notify the Trustee of any failure by the Company (or any
other obligor on such Securities) to make any payment of
principal of or premium, if any, or interest, if any, on such
Securities.
Whenever the Company shall have one or more Paying
Agents for the Securities of any series, it shall, on or before
each due date of the principal of and premium, if any, and
interest, if any, on such Securities, deposit with such Paying
Agents sums sufficient (without duplication) to pay the principal
and premium or interest so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal,
premium or interest, and (unless such Paying Agent is the
Trustee) the Company shall promptly notify the Trustee of any
failure by it so to act.
The Company shall cause each Paying Agent for the
Securities of any series, other than the Company or the Trustee,
to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent shall:
(a) hold all sums held by it for the payment of the
principal of and premium, if any, or interest, if any, on
such Securities in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any failure by the
Company (or any other obligor upon such Securities) to make
any payment of principal of or premium, if any, or interest,
if any, on such Securities; and
(c) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying
Agent and furnish to the Trustee such information as it
possesses regarding the names and addresses of the Persons
entitled to such sums.
The Company may at any time pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held
by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent and, if so stated
in a Company Order delivered to the Trustee, in accordance with
the provisions of Article Seven; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of
the principal of and premium, if any, or interest, if any, on any
Security and remaining unclaimed for two years after such
principal and premium, if any, or interest has become due and
payable shall be paid to the Company on Company Request, or, if
then held by the Company, shall be discharged from such trust;
and, upon such payment or discharge, the Holder of such Security
shall, as an unsecured general creditor and not as a Holder of an
Outstanding Security, look only to the Company for payment of the
amount so due and payable and remaining unpaid, and all liability
of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such payment to
the Company, may at the expense of the Company cause to be
mailed, on one occasion only, notice to such Holder that such
money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such
mailing, any unclaimed balance of such money then remaining will
be paid to the Company.
SECTION 604. CORPORATE EXISTENCE.
Subject to the rights of the Company under Article
Eleven, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its
corporate existence.
SECTION 605. MAINTENANCE OF PROPERTIES.
The Company shall cause (or, with respect to property
owned in common with others, make reasonable effort to cause) all
its properties used or useful in the conduct of its business to
be maintained and kept in good condition, repair and working
order and shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) to be made
all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as, in the judgment of the Company, may
be necessary so that the business carried on in connection
therewith may be properly conducted; provided, however, that
nothing in this Section shall prevent the Company from
discontinuing, or causing the discontinuance of, the operation
and maintenance of any of its properties if such discontinuance
is, in the judgment of the Company, desirable in the conduct of
its business.
SECTION 606. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
Not later than September 15 in each year, commencing
September 15, 1997, the Company shall deliver to the Trustee an
Officer's Certificate which need not comply with Section 102,
executed by the principal executive officer, the principal
financial officer or the principal accounting officer of the
Company, as to such officer's knowledge of the Company's
compliance with all conditions and covenants under this
Indenture, such compliance to be determined without regard to any
period of grace or requirement of notice under this Indenture.
SECTION 607. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to
comply with any term, provision or condition set forth in (a)
Section 602 or any additional covenant or restriction specified
with respect to the Securities of any series, as contemplated by
Section 301, if before the time for such compliance the Holders
of at least a majority in aggregate principal amount of the
Outstanding Securities of all series with respect to which
compliance with Section 602 or such additional covenant or
restriction is to be omitted, considered as one class, shall, by
Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision
or condition and (b) Section 604, 605 or Article Eleven if before
the time for such compliance the Holders of at least a majority
in principal amount of Securities Outstanding under this
Indenture shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with
such term, provision or condition; but, in the case of (a) or
(b), no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of
the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and
effect; provided, however, that so long as a Trust holds
Securities of any series, such Trust may not waive compliance or
waive any default in compliance by the Company with any covenant
or other term contained in this Indenture or the Securities of
such series without the approval of the holders of at least a
majority in aggregate liquidation preference of the outstanding
Preferred Securities issued by such Trust affected, obtained as
provided in the Trust Agreement pertaining to such Trust.
SECTION 608. RESTRICTION ON PAYMENT OF DIVIDENDS.
So long as any Preferred Securities of any series
remain outstanding, the Company shall not declare or pay any
dividend on, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of the Company's capital stock, or
make any guarantee payments with respect to the foregoing (other
than payments under the Guarantee relating to such Preferred
Securities) if at such time (a) the Company shall be in default
with respect to its payment or other obligations under the
Guarantee relating to such Preferred Securities, (b) there shall
have occurred and be continuing a payment default (whether before
or after expiration of any period of grace) or an Event of
Default hereunder or (c) the Company shall have elected to extend
any interest payment period as provided in Section 311, and any
such period, or any extension thereof, shall be continuing.
SECTION 609. MAINTENANCE OF TRUST EXISTENCE.
So long as Preferred Securities of any series remain
outstanding, the Company shall (i) maintain direct or indirect
ownership of all interests in the Trust which issued such
Preferred Securities, other than such Preferred Securities, (ii)
not voluntarily (to the extent permitted by law) dissolve,
liquidate or wind up such Trust, except in connection with a
distribution of the Securities to the holders of the Preferred
Securities in liquidation of such Trust, (iii) remain the sole
Depositor under the Trust Agreement (the "Depositor") of such
Trust and timely perform in all material respects all of its
duties as Depositor of such Trust, and (iv) use reasonable
efforts to cause such Trust to remain a business trust and
otherwise continue to be treated as a grantor trust for Federal
income tax purposes provided that any permitted successor to the
Company under this Indenture may succeed to the Company's duties
as Depositor of such Trust; and provided further that the Company
may permit such Trust to consolidate or merge with or into
another business trust or other permitted successor under the
Trust Agreement pertaining to such Trust so long as the Company
agrees to comply with this Section 609 with respect to such
successor business trust or other permitted successor.
ARTICLE SEVEN
SATISFACTION AND DISCHARGE
SECTION 701. DEFEASANCE.
Any Security or Securities, or any portion of the
principal amount thereof, shall be deemed to have been paid for
all purposes of this Indenture, and the entire indebtedness of
the Company in respect thereof shall be deemed to have been
satisfied and discharged, if there shall have been irrevocably
deposited with the Trustee or any Paying Agent (other than the
Company), in trust:
(a) money in an amount which shall be sufficient, or
(b) in the case of a deposit made prior to the
Maturity of such Securities or portions thereof, Government
Obligations, which shall not contain provisions permitting
the redemption or other prepayment thereof at the option of
the issuer thereof, the principal of and the interest on
which when due, without any regard to reinvestment thereof,
will provide moneys which, together with the money, if any,
deposited with or held by the Trustee or such Paying Agent,
shall be sufficient, or
(c) a combination of (a) or (b) which shall be
sufficient,
to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such Securities or
portions thereof on or prior to Maturity; provided, however, that
in the case of the provision for payment or redemption of less
than all the Securities of any series, such Securities or
portions thereof shall have been selected by the Trustee as
provided herein and, in the case of a redemption, the notice
requisite to the validity of such redemption shall have been
given or irrevocable authority shall have been given by the
Company to the Trustee to give such notice, under arrangements
satisfactory to the Trustee; and provided, further, that the
Company shall have delivered to the Trustee and such Paying
Agent:
(i) if such deposit shall have been made prior to
the Maturity of such Securities, a Company Order
stating that the money and Government Obligations
deposited in accordance with this Section shall be held
in trust, as provided in Section 703; and
(ii) if Government Obligations shall have been
deposited, an Opinion of Counsel that the obligations
so deposited constitute Government Obligations and do
not contain provisions permitting the redemption or
other prepayment at the option of the issuer thereof,
and an opinion of an independent public accountant of
nationally recognized standing, selected by the
Company, to the effect that the requirements set forth
in clause (b) above have been satisfied; and
(iii) An Opinion of Counsel to the effect that
the Holders of such Securities will not recognize
income, gain or loss for Federal income tax purposes as
a result of the satisfaction and discharge of the
Company's indebtedness in respect of such Securities,
and such Holders will be subject to Federal income
taxation on the same amounts and in the same manner and
at the same times as if such satisfaction and discharge
had occurred.
Upon the deposit of money or Government Obligations, or
both, in accordance with this Section, together with the
documents required by clauses (i), (ii) and (iii) above, the
Trustee shall, upon receipt of a Company Request, acknowledge in
writing that the Security or Securities or portions thereof with
respect to which such deposit was made are deemed to have been
paid for all purposes of this Indenture and that the entire
indebtedness of the Company in respect thereof has been satisfied
and discharged as contemplated in this Section. In the event
that all of the conditions set forth in the preceding paragraph
shall have been satisfied in respect of any Securities or
portions thereof except that, for any reason, the Opinion of
Counsel specified in clause (iii) shall not have been delivered,
such Securities or portions thereof shall nevertheless be deemed
to have been paid for all purposes of this Indenture, and the
Holders of such Securities or portions thereof shall nevertheless
be no longer entitled to the benefits of this Indenture or of any
of the covenants of the Company under Article Six (except the
covenants contained in Sections 602 and 603) or any other
covenants made in respect of such Securities or portions thereof
as contemplated by Section 301, but the indebtedness of the
Company in respect of such Securities or portions thereof shall
not be deemed to have been satisfied and discharged prior to
Maturity for any other purpose, and the Holders of such
Securities or portions thereof shall continue to be entitled to
look to the Company for payment of the indebtedness represented
thereby; and, upon Company Request, the Trustee shall acknowledge
in writing that such Securities or portions thereof are deemed to
have been paid for all purposes of this Indenture.
If payment at Stated Maturity of less than all of the
Securities of any series is to be provided for in the manner and
with the effect provided in this Section, the Security Registrar
shall select such Securities, or portions of principal amount
thereof, in the manner specified by Section 403 for selection for
redemption of less than all the Securities of a series.
In the event that Securities which shall be deemed to
have been paid for purposes of this Indenture, and, if such is
the case, in respect of which the Company's indebtedness shall
have been satisfied and discharged, all as provided in this
Section do not mature and are not to be redeemed within the 60-
day period commencing with the date of the deposit of moneys or
Government Obligations, as aforesaid, the Company shall, as
promptly as practicable, give a notice, in the same manner as a
notice of redemption with respect to such Securities, to the
Holders of such Securities to the effect that such deposit has
been made and the effect thereof.
Notwithstanding that any Securities shall be deemed to
have been paid for purposes of this Indenture, as aforesaid, the
obligations of the Company and the Trustee in respect of such
Securities under Sections 304, 305, 306, 404, 503 (as to notice
of redemption), 602, 603, 907 and 915 and this Article Seven
shall survive.
The Company shall pay, and shall indemnify the Trustee
or any Paying Agent with which Government Obligations shall have
been deposited as provided in this Section against, any tax, fee
or other charge imposed on or assessed against such Government
Obligations or the principal or interest received in respect of
such Government Obligations, including, but not limited to, any
such tax payable by any entity deemed, for tax purposes, to have
been created as a result of such deposit.
Anything herein to the contrary notwithstanding, (a)
if, at any time after a Security would be deemed to have been
paid for purposes of this Indenture, and, if such is the case,
the Company's indebtedness in respect thereof would be deemed to
have been satisfied or discharged, pursuant to this Section
(without regard to the provisions of this paragraph), the Trustee
or any Paying Agent, as the case may be, shall be required to
return the money or Government Obligations, or combination
thereof, deposited with it as aforesaid to the Company or its
representative under any applicable Federal or State bankruptcy,
insolvency or other similar law, such Security shall thereupon be
deemed retroactively not to have been paid and any satisfaction
and discharge of the Company's indebtedness in respect thereof
shall retroactively be deemed not to have been effected, and such
Security shall be deemed to remain Outstanding and (b) any
satisfaction and discharge of the Company's indebtedness in
respect of any Security shall be subject to the provisions of the
last paragraph of Section 603.
SECTION 702. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be
of further effect (except as hereinafter expressly provided), and
the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this
Indenture, when
(a) no Securities remain Outstanding hereunder; and
(b) the Company has paid or caused to be paid all other
sums payable hereunder by the Company;
provided, however, that if, in accordance with the last paragraph
of Section 701, any Security, previously deemed to have been paid
for purposes of this Indenture, shall be deemed retroactively not
to have been so paid, this Indenture shall thereupon be deemed
retroactively not to have been satisfied and discharged, as
aforesaid, and to remain in full force and effect, and the
Company shall execute and deliver such instruments as the Trustee
shall reasonably request to evidence and acknowledge the same.
Notwithstanding the satisfaction and discharge of this
Indenture as aforesaid, the obligations of the Company and the
Trustee under Sections 304, 305, 306, 404, 503 (as to notice of
redemption), 602, 603, 907 and 915 and this Article Seven shall
survive.
Upon satisfaction and discharge of this Indenture as
provided in this Section, the Trustee shall assign, transfer and
turn over to the Company, subject to the lien provided by Section
907, any and all money, securities and other property then held
by the Trustee for the benefit of the Holders of the Securities
other than money and Government Obligations held by the Trustee
pursuant to Section 703.
SECTION 703. APPLICATION OF TRUST MONEY.
Neither the Government Obligations nor the money
deposited pursuant to Section 701, nor the principal or interest
payments on any such Government Obligations, shall be withdrawn
or used for any purpose other than, and shall be held in trust
for, the payment of the principal of and premium, if any, and
interest, if any, on the Securities or portions of principal
amount thereof in respect of which such deposit was made, all
subject, however, to the provisions of Section 603; provided,
however, that, so long as there shall not have occurred and be
continuing an Event of Default any cash received from such
principal or interest payments on such Government Obligations, if
not then needed for such purpose, shall, to the extent
practicable, be invested in Government Obligations of the type
described in clause (b) in the first paragraph of Section 701
maturing at such times and in such amounts as shall be sufficient
to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such Securities or
portions thereof on and prior to the Maturity thereof, and
interest earned from such reinvestment shall be paid over to the
Company as received, free and clear of any trust, lien or pledge
under this Indenture except the lien provided by Section 907; and
provided, further, that, so long as there shall not have occurred
and be continuing an Event of Default, any moneys held in
accordance with this Section on the Maturity of all such
Securities in excess of the amount required to pay the principal
of and premium, if any, and interest, if any, then due on such
Securities shall be paid over to the Company free and clear of
any trust, lien or pledge under this Indenture except the lien
provided by Section 907; and provided, further, that if an Event
of Default shall have occurred and be continuing, moneys to be
paid over to the Company pursuant to this Section shall be held
until such Event of Default shall have been waived or cured.
ARTICLE EIGHT
EVENTS OF DEFAULT; REMEDIES
SECTION 801. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect
to Securities of any series, means any one of the following
events:
(a) failure to pay interest, if any, including any
Additional Interest, on any Security of such series within
30 days after the same becomes due and payable (whether or
not payment is prohibited by the provisions of Article
Fifteen hereof); provided, however, that a valid extension
of the interest payment period by the Company as
contemplated in Section 311 of this Indenture shall not
constitute a failure to pay interest for this purpose; or
(b) failure to pay the principal of or premium, if
any, on any Security of such series at its Maturity (whether
or not payment is prohibited by the provisions of Article
Fifteen hereof); or
(c) failure to perform or breach of any covenant or
warranty of the Company in this Indenture (other than a
covenant or warranty a default in the performance of which
or breach of which is elsewhere in this Section specifically
dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of
Securities other than such series) for a period of 60 days
after there has been given, by registered or certified mail,
to the Company by the Trustee, or to the Company and the
Trustee by the Holders of at least 10% in principal amount
of the Outstanding Securities of such series, a written
notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of
Default" hereunder, unless the Trustee, or the Trustee and
the Holders of a principal amount of Securities of such
series not less than the principal amount of Securities the
Holders of which gave such notice, as the case may be, shall
agree in writing to an extension of such period prior to its
expiration; provided, however, that the Trustee, or the
Trustee and the Holders of such principal amount of
Securities of such series, as the case may be, shall be
deemed to have agreed to an extension of such period if
corrective action is initiated by the Company within such
period and is being diligently pursued; or
(d) the entry by a court having jurisdiction in the
premises of (1) a decree or order for relief in respect of
the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (2) a decree or order
adjudging the Company a bankrupt or insolvent, or approving
as properly filed a petition by one or more Persons other
than the Company seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official for the Company or
for any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and any such
decree or order for relief or any such other decree or order
shall have remained unstayed and in effect for a period of
90 consecutive days; or
(e) the commencement by the Company of a voluntary
case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law
or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of
a decree or order for relief in respect of the Company in a
case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law
or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it of a petition
or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by it to
the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the
Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors,
or the admission by it in writing of its inability to pay
its debts generally as they become due, or the authorization
of such action by the Board of Directors; or
(f) any other Event of Default specified with respect
to Securities of such series.
SECTION 802. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default due to the default in payment of
principal of, or interest on, any series of Securities or due to
the default in the performance or breach of any other covenant or
warranty of the Company applicable to the Securities of such
series but not applicable to all outstanding Securities shall
have occurred and be continuing, either the Trustee or the
Holders of not less than 25% in principal amount of the
Securities of such series may then declare the principal of all
Securities of such series and interest accrued thereon to be due
and payable immediately; provided, however, that, in the case of
the Securities of a series issued to a Trust, if, upon an Event
of Default, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of that series
fail to declare the principal of all the Securities of that
series to be immediately due and payable, the holders of at least
25% in aggregate liquidation amount of the corresponding series
of Preferred Securities then outstanding shall have such right by
a notice in writing to the Company and the Trustee; and upon any
such declaration such principal amount (or specified amount) of
and the accrued interest (including any Additional Interest) on
all the Securities of such series shall become immediately due
and payable (provided that the payment of principal and interest
on such Securities shall remain subordinated to the extent
provided in Article Fifteen hereof). If an Event of Default due
to default in the performance of any other of the covenants or
agreements herein applicable to all Outstanding Securities or an
Event of Default specified in Section 801(d) or (e) shall have
occurred and be continuing, either the Trustee or the Holders of
not less than 25% in principal amount of all Securities then
Outstanding (considered as one class), and not the Holders of the
Securities of any one of such series, may declare the principal
of all Securities and interest accrued thereon to be due and
payable immediately (provided that the payment of principal and
interest on such Securities shall remain subordinated to the
extent provided in the Indenture).
At any time after such a declaration of acceleration
with respect to Securities of any series shall have been made and
before a judgment or decree for payment of the money due shall
have been obtained by the Trustee as hereinafter in this Article
provided, the Event or Events of Default giving rise to such
declaration of acceleration shall, without further act, be deemed
to have been waived, and such declaration and its consequences
shall, without further act, be deemed to have been rescinded and
annulled, if
(a) the Company shall have paid or deposited with the
Trustee a sum sufficient to pay
(i) all overdue interest on all Securities of
such series;
(ii) the principal of and premium, if any, on any
Securities of such series which have become due
otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed
therefor in such Securities;
(iii) to the extent that payment of such interest
is lawful, interest upon overdue interest, if any, at
the rate or rates prescribed therefor in such
Securities;
(iv) all amounts due to the Trustee under Section
907;
and
(b) any other Event or Events of Default with respect
to Securities of such series, other than the nonpayment of
the principal of Securities of such series which shall have
become due solely by such declaration of acceleration, shall
have been cured or waived as provided in Section 813.
No such rescission shall affect any subsequent Event of Default
or impair any right consequent thereon.
SECTION 803. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE.
If an Event of Default described in clause (a) or (b)
of Section 801 shall have occurred and be continuing, the Company
shall, upon demand of the Trustee, pay to it, for the benefit of
the Holders of the Securities of the series with respect to which
such Event of Default shall have occurred, the whole amount then
due and payable on such Securities for principal and premium, if
any, and interest, if any, and, to the extent permitted by law,
interest on premium, if any, and on any overdue principal and
interest, at the rate or rates prescribed therefor in such
Securities, and, in addition thereto, such further amount as
shall be sufficient to cover any amounts due to the Trustee under
Section 907.
If the Company shall fail to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of
an express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and
collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any
other obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of
any series shall have occurred and be continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and
the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.
SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the
property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of
the Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment
of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of
principal, premium, if any, and interest, if any, owing and
unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim
for amounts due to the Trustee under Section 907) and of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other
property payable or deliverable on any such claims and to
distribute the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders,
to pay to the Trustee any amounts due it under Section 907.
Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights
of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 805. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or
the Securities may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of
the Holders in respect of which such judgment has been recovered.
SECTION 806. APPLICATION OF MONEY COLLECTED.
Subject to the provisions of Article Fifteen, any money
collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account
of principal or premium, if any, or interest, if any, upon
presentation of the Securities in respect of which or for the
benefit of which such money shall have been collected and the
notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee
under Section 907;
SECOND: To the payment of the amounts then due and
unpaid upon the Securities for principal of and premium, if
any, and interest, if any, in respect of which or for the
benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal,
premium, if any, and interest, if any, respectively; and
THIRD: To the payment of the remainder, if any, to the
Company or to whomsoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.
SECTION 807. LIMITATION ON SUITS.
No Holder shall have any right to institute any
proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(a) such Holder shall have previously given written
notice to the Trustee of a continuing Event of Default with
respect to the Securities of such series;
(b) the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of
all series in respect of which an Event of Default shall
have occurred and be continuing, considered as one class,
shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(c) such Holder or Holders shall have offered to the
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to
institute any such proceeding; and
(e) no direction inconsistent with such written
request shall have been given to the Trustee during such 60-
day period by the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all series
in respect of which an Event of Default shall have occurred
and be continuing, considered as one class;
it being understood and intended that no one or more of such
Holders shall have any right in any manner whatever by virtue of,
or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other of such Holders or
to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal
and ratable benefit of all of such Holders.
SECTION 808. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM AND INTEREST.
Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is
absolute and unconditional, to receive payment of the principal
of and premium, if any, and (subject to Section 307 and 311)
interest, if any, on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be
impaired without the consent of such Holder. Any holder of
related Preferred Securities shall have the right to institute
suit for the enforcement of any such payment to such holder with
respect to Securities relating to such Preferred Securities
having a principal amount equal to the aggregate liquidation
preference amount of the related Preferred Securities held by
such holder.
SECTION 809. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture
and such proceeding shall have been discontinued or abandoned for
any reason, or shall have been determined adversely to the
Trustee or to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company, and Trustee
and such Holder shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and
remedies of the Trustee and such Holder shall continue as though
no such proceeding had been instituted.
SECTION 810. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 811. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder to
exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every
right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 812. CONTROL BY HOLDERS OF SECURITIES.
If an Event of Default shall have occurred and be
continuing in respect of a series of Securities, the Holders of a
majority in principal amount of the Outstanding Securities of
such series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Securities of such series; provided,
however, that if an Event of Default shall have occurred and be
continuing with respect to more than one series of Securities,
the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all such series, considered as one
class, shall have the right to make such direction, and not the
Holders of the Securities of any one of such series; and
provided, further, that such direction shall not be in conflict
with any rule of law or with this Indenture. Before proceeding
to exercise any right or power hereunder at the direction of such
Holders, the Trustee shall be entitled to receive from such
Holders reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in
compliance with any such direction.
SECTION 813. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal
amount of the Outstanding Securities of any series may on behalf
of the Holders of all the Securities of such series waive any
past default hereunder with respect to such series and its
consequences, except a default
(a) in the payment of the principal of or premium, if
any, or interest, if any, on any Security of such series, or
(b) in respect of a covenant or provision hereof which
under Section 1202 cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such
series affected;
provided, however, that so long as a Trust holds the Securities
of any series, such Trust may not waive any past default without
the consent of at least a majority in aggregate liquidation
preference of the outstanding Preferred Securities issued by such
Trust affected, obtained as provided in the Trust Agreement
pertaining to such Trust.
Upon any such waiver, such default shall cease to
exist, and any and all Events of Default arising therefrom shall
be deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 814. UNDERTAKING FOR COSTS.
The Company and the Trustee agree, and each Holder by
his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in
any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant
in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; provided,
however, that the provisions of this Section shall not apply to
any suit instituted by the Company, to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in aggregate
principal amount of the Outstanding Securities of all series in
respect of which such suit may be brought, considered as one
class, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of or premium, if
any, or interest, if any, on any Security on or after the Stated
Maturity or Maturities expressed in such Security (or, in the
case of redemption, on or after the Redemption Date).
SECTION 815. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or
at any time hereafter in force, which may affect the covenants or
the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE NINE
THE TRUSTEE
SECTION 901. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of
Default,
(i) the Trustee undertakes to perform such duties
and only such duties as are specifically set forth in
this Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee;
and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of this Indenture; provided, however,
that, in the case of any such certificates or opinions
which by any provisions hereof are specifically
required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture, 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 own affairs.
(c) No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct except that
(i) this Subsection shall not be construed to
limit the effect of Subsection (a) of this Section;
(ii) the Trustee shall not be liable for any
error or judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the 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
Holders pursuant to Section 812 relating to the time,
method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such
series.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.
SECTION 902. NOTICE OF DEFAULTS.
The Trustee shall give notice of any default hereunder
with respect to the Securities of any series to the Holders of
Securities of such series in the manner and to the extent
required to do so by the Trust Indenture Act, unless such default
shall have been cured or waived; provided, however, that in the
case of any default of the character specified in Section 801(c),
no such notice to Holders shall be given until at least 45 days
after the occurrence thereof. For the purpose of this Section,
the term "default" means any event which is, or after notice or
lapse of time, or both, would become, an Event of Default.
SECTION 903. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 901 and to the
applicable provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document reasonably believed by it to be genuine
and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request
or Company Order, or as otherwise expressly provided herein,
and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be
herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any Holder pursuant
to this Indenture, unless such Holder shall have offered to
the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction;
(f) the 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 Trustee, in its discretion, may
make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it
shall (subject to applicable legal requirements) be entitled
to examine, during normal business hours, the books, records
and premises of the Company, personally or by agent or
attorney;
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the
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; and
(h) the Trustee shall not be charged with knowledge of
any default or Event of Default, as the case may be, with
respect to the Securities of any series for which it is
acting as Trustee unless either (i) a Responsible Officer of
the Trustee shall have actual knowledge of the default or
Event of Default, as the case may be, or (ii) written notice
of such default or Event of Default, as the case may be,
shall have been given to the Trustee by the Company, any
other obligor on such Securities or by any Holder of such
Securities.
SECTION 904. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The recitals contained herein and in the Securities
(except the Trustee's certificates of authentication) shall be
taken as the statements of the Company, and neither the Trustee
nor any Authenticating Agent assumes responsibility for their
correctness. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of
Securities or the proceeds thereof.
SECTION 905. MAY HOLD SECURITIES.
Each of the Trustee, any Authenticating Agent, any
Paying Agent, any Security Registrar or any other agent of the
Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and (subject to Sections 908 and
913) may otherwise deal with the Company with the same rights it
would have if it were not the Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.
SECTION 906. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not
be segregated from other funds, except to the extent required by
law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as expressly provided
herein or otherwise agreed with, and for the sole benefit of, the
Company.
SECTION 907. COMPENSATION AND REIMBURSEMENT.
The Company shall
(a) pay to the Trustee from time to time compensation
for all services rendered by it hereunder in accordance with
a separate fee agreement between the Company and the Trustee
(which compensation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein,
reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or
made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel),
except to the extent that any such expense, disbursement or
advance may be attributable to the Trustee's negligence,
wilful misconduct or bad faith; and
(c) indemnify the Trustee for, and hold it harmless
from and against, any loss, liability or expense incurred by
it arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder or the
performance of its duties hereunder, including the
reasonable costs and expenses of defending itself against
any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except
to the extent any such loss, liability or expense may be
attributable to its negligence, wilful misconduct or bad
faith.
As security for the performance of the obligations of
the Company under this Section, the Trustee shall have a lien
prior to the Securities upon all property and funds held or
collected by the Trustee as such other than property and funds
held in trust under Section 703 (except as otherwise provided in
Section 703). "Trustee" for purposes of this Section shall
include any predecessor Trustee; provided, however, that the
negligence, wilful misconduct or bad faith of any Trustee
hereunder shall not affect the rights of any other Trustee
hereunder.
In addition to the rights provided to the Trustee
pursuant to the provisions of the immediately preceding paragraph
of this Section 907, when the Trustee incurs expenses or renders
services in connection with an Event of Default specified in
Section 801(d) or Section 801(e), the expenses (including the
reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses
of administration under any applicable Federal or State
bankruptcy, insolvency or other similar law.
SECTION 908. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee shall have or acquire any conflicting
interest within the meaning of the Trust Indenture Act, it shall
either eliminate such conflicting interest or resign to the
extent, in the manner and with the effect, and subject to the
conditions, provided in the Trust Indenture Act and this
Indenture. For purposes of Section 310(b)(1) of the Trust
Indenture Act and to the extent permitted thereby, the Trustee,
in its capacity as trustee in respect of the Securities of any
series, shall not be deemed to have a conflicting interest
arising from its capacity as trustee in respect of the Securities
of any other series. The Trust Agreement and the Guarantee
Agreement pertaining to each Trust shall be deemed to be
specifically described in this Indenture for the purposes of
clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
SECTION 909. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which
shall be
(a) a corporation organized and doing business under
the laws of the United States, any State or Territory
thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal or State authority, or
(b) if and to the extent permitted by the Commission
by rule, regulation or order upon application, a corporation
or other Person organized and doing business under the laws
of a foreign government, authorized under such laws to
exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 or the Dollar equivalent
of the applicable foreign currency and subject to
supervision or examination by authority of such foreign
government or a political subdivision thereof substantially
equivalent to supervision or examination applicable to
United States institutional trustees,
and, in either case, qualified and eligible under this Article
and the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then for
the purposes of this Section, 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. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 910. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article
shall become effective until the acceptance of appointment
by the successor Trustee in accordance with the applicable
requirements of Section 911.
(b) The Trustee may resign at any time with respect to
the Securities of one or more series by giving written
notice thereof to the Company. If the instrument of
acceptance by a successor Trustee required by Section 911
shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(c) The Trustee may be removed at any time with
respect to the Securities of any series by Act of the
Holders of a majority in principal amount of the Outstanding
Securities of such series delivered to the Trustee and to
the Company; provided, however, that so long as any
Preferred Securities remain outstanding, the Trust which
issued such Preferred Securities shall not execute any Act
to remove the Trustee without the consent of the holders of
a majority in aggregate liquidation preference of Preferred
Securities issued by such Trust outstanding, obtained as
provided in the Trust Agreement pertaining to such Trust.
(d) If at any time:
(i) the Trustee shall fail to comply with Section
908 after written request therefor by the Company or by
any Holder who has been a bona fide Holder for at least
six months, or
(ii) the Trustee shall cease to be eligible under
Section 909 and shall fail to resign after written
request therefor by the Company or by any such Holder,
or
(iii) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or
a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (x) the Company by a Board Resolution may
remove the Trustee with respect to all Securities or (y) subject
to Section 814, any Holder who has been a bona fide Holder for at
least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the
office of Trustee for any cause (other than as contemplated
in clause (y) in subsection (d) of this Section), with
respect to the Securities of one or more series, the
Company, by a Board Resolution, shall promptly appoint a
successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with
the applicable requirements of Section 911. If, within one
year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect
to the Securities of any series shall be appointed by Act of
the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements
of Section 911, become the successor Trustee with respect to
the Securities of such series and to that extent supersede
the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the
Holders and accepted appointment in the manner required by
Section 911, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on
behalf of itself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such
series.
(f) So long as no event which is, or after notice or
lapse of time, or both, would become, an Event of Default
shall have occurred and be continuing, and except with
respect to a Trustee appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities
pursuant to subsection (e) of this Section, if the Company
shall have delivered to the Trustee (i) a Board Resolution
appointing a successor Trustee, effective as of a date
specified therein, and (ii) an instrument of acceptance of
such appointment, effective as of such date, by such
successor Trustee in accordance with Section 911, the
Trustee shall be deemed to have resigned as contemplated in
subsection (b) of this Section, the successor Trustee shall
be deemed to have been appointed by the Company pursuant to
subsection (e) of this Section and such appointment shall be
deemed to have been accepted as contemplated in Section 911,
all as of such date, and all other provisions of this
Section and Section 911 shall be applicable to such
resignation, appointment and acceptance except to the extent
inconsistent with this subsection (f).
(g) The Company shall give notice of each resignation
and each removal of the Trustee with respect to the
Securities of any series and each appointment of a successor
Trustee with respect to the Securities of any series by
mailing written notice of such event by first-class mail,
postage prepaid, to all Holders of Securities of such series
as their names and addresses appear in the Security
Register. Each notice shall include the name of the
successor Trustee with respect to the Securities of such
series and the address of its corporate trust office.
SECTION 911. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a
successor Trustee with respect to the Securities of all
series, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the
retiring Trustee; provided, however that on the request of
the Company or the successor Trustee, such retiring Trustee
shall, upon payment of all sums owed to it, execute and
deliver an instrument transferring to such successor Trustee
all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such
retiring Trustee hereunder.
(b) In case of the appointment hereunder of a
successor Trustee with respect to the Securities of one or
more (but not all) series, the Company, the retiring Trustee
and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall
accept such appointment and which (i) shall contain such
provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee
relates, (ii) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring
shall continue to be vested in the retiring Trustee and
(iii) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-
trustees of the same trust and that each such Trustee shall
be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent
provided therein and each such successor Trustee, without
any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor
Trustee relates; provided, however that on request of the
Company or any successor Trustee, such retiring Trustee,
upon payment of all sums owed to it, shall duly assign,
transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which
the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the
Company shall execute any instruments which fully vest in
and confirm to such successor Trustee all such rights,
powers and trusts referred to in subsection (a) or (b) of
this Section, as the case may be.
(d) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.
SECTION 912. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Trustee 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 Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the
Trustee 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. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver
the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 913. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If the Trustee shall be or become a creditor of the
Company or any other obligor upon the Securities (other than by
reason of a relationship described in Section 311(b) of the Trust
Indenture Act), the Trustee shall be subject to any and all
applicable provisions of the Trust Indenture Act regarding the
collection of claims against the Company or such other obligor.
For purposes of Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction
in which full payment for goods or securities sold is made
within seven days after delivery of the goods or securities
in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft,
bill of exchange, acceptance or obligation which is made,
drawn, negotiated or incurred by the Company for the purpose
of financing the purchase, processing, manufacturing,
shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the
sale of the goods, wares or merchandise previously
constituting the security, provided the security is received
by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the
making, drawing, negotiating or incurring of the draft, bill
of exchange, acceptance or obligation.
SECTION 914. CO-TRUSTEES AND SEPARATE TRUSTEES.
At any time or times, for the purpose of meeting the
legal requirements of any applicable jurisdiction, the Company
and the Trustee shall have power to appoint, and, upon the
written request of the Trustee or of the Holders of at least 25%
in principal amount of the Securities then Outstanding, the
Company shall for such purpose join with the Trustee in the
execution and delivery of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by
the Trustee either to act as co-trustee, jointly with the
Trustee, or to act as separate trustee, in either case with such
powers as may be provided in the instrument of appointment, and
to vest in such Person or Persons, in the capacity aforesaid, any
property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Company
does not join in such appointment within 15 days after the
receipt by it of a request so to do, or if an Event of Default
shall have occurred and be continuing, the Trustee alone shall
have power to make such appointment.
Should any written instrument or instruments from the
Company be required by any co-trustee or separate trustee so
appointed to more fully confirm to such co-trustee or separate
trustee such property, title, right or power, any and all such
instruments shall, on request, be executed, acknowledged and
delivered by the Company.
Every co-trustee or separate trustee shall, to the
extent permitted by law, but to such extent only, be appointed
subject to the following conditions:
(a) the Securities shall be authenticated and
delivered, and all rights, powers, duties and obligations
hereunder in respect of the custody of securities, cash and
other personal property held by, or required to be deposited
or pledged with, the Trustee hereunder, shall be exercised
solely, by the Trustee;
(b) the rights, powers, duties and obligations hereby
conferred or imposed upon the Trustee in respect of any
property covered by such appointment shall be conferred or
imposed upon and exercised or performed either by the
Trustee or by the Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to
the extent that under any law of any jurisdiction in which
any particular act is to be performed, the Trustee shall be
incompetent or unqualified to perform such act, in which
event such rights, powers, duties and obligations shall be
exercised and performed by such co-trustee or separate
trustee;
(c) the Trustee at any time, by an instrument in
writing executed by it, with the concurrence of the Company,
may accept the resignation of or remove any co-trustee or
separate trustee appointed under this Section, and, if an
Event of Default shall have occurred and be continuing, the
Trustee shall have power to accept the resignation of, or
remove, any such co-trustee or separate trustee without the
concurrence of the Company. Upon the written request of the
Trustee, the Company shall join with the Trustee in the
execution and delivery of all instruments and agreements
necessary or proper to effectuate such resignation or
removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner
provided in this Section;
(d) no co-trustee or separate trustee hereunder shall
be personally liable by reason of any act or omission of the
Trustee, or any other such trustee hereunder; and
(e) any Act of Holders delivered to the Trustee shall
be deemed to have been delivered to each such co-trustee and
separate trustee.
SECTION 915. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or
Agents with respect to the Securities of one or more series,
which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original
issuance and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of
Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed
on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall
at all times be a corporation organized and doing business under
the laws of the United States, any State or territory thereof or
the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of
not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating
Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and
with the effect specified in this Section.
Any corporation into which an Authenticating Agent may
be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a
party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation
shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part
of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by
giving written notice thereof to the Trustee and to the Company.
The Trustee may at any time terminate the agency of an
Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at
any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be
acceptable to the Company. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested
with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services under
this Section, and the Trustee shall be entitled to be reimbursed
for such payments, in accordance with, and subject to the
provisions of Section 907.
The provisions of Sections 308, 904 and 905 shall be
applicable to each Authenticating Agent.
If an appointment with respect to the Securities of one
or more series shall be made pursuant to this Section, the
Securities of such series may have endorsed thereon, in addition
to the Trustee's certificate of authentication, an alternate
certificate of authentication substantially in the following
form:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
-------------------------------
As Trustee
By
-------------------------------
As Authenticating Agent
By
-------------------------------
Authorized Signatory
If all of the Securities of a series may not be
originally issued at one time, and if the Trustee does not have
an office capable of authenticating Securities upon original
issuance located in a Place of Payment where the Company wishes
to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing
(which writing need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel), shall appoint, in
accordance with this Section and in accordance with such
procedures as shall be acceptable to the Trustee, an
Authenticating Agent having an office in a Place of Payment
designated by the Company with respect to such series of
Securities.
ARTICLE TEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 1001. LISTS OF HOLDERS.
Semiannually, not later than June 1 and December 1 in
each year, commencing December 1, 1996, and at such other times
as the Trustee may request in writing, the Company shall furnish
or cause to be furnished to the Trustee information as to the
names and addresses of the Holders, and the Trustee shall
preserve such information and similar information received by it
in any other capacity and afford to the Holders access to
information so preserved by it, all to such extent, if any, and
in such manner as shall be required by the Trust Indenture Act;
provided, however, that no such list need be furnished so long as
the Trustee shall be the Security Registrar.
SECTION 1002. REPORTS BY TRUSTEE.
(a) The Trustee shall transmit to the Holders such
reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant thereto. Such
of those reports as are required to be transmitted by the Trustee
pursuant to Section 313(a) of the Trust Indenture Act shall be so
transmitted within 60 days after December 31 of each year,
commencing December 31, 1996.
(b) A copy of each such report shall, at the time of
such transmission to the Holders, be filed by the Trustee with
each stock exchange upon which the Securities are listed, with
the Commission and with the Company. The Company shall notify
the Trustee when any Securities shall have been listed on any
stock exchange.
SECTION 1003. REPORTS TO THE TRUSTEE. The Company shall provide
to the Trustee such documents, reports, compliance certificates
and information as may be required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times
required thereby.
ARTICLE ELEVEN
CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER
SECTION 1101. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS.
The Company shall not consolidate with or merge into
any other corporation, or convey or otherwise transfer or lease
its properties and assets substantially as an entirety to any
Person, unless
(a) the corporation formed by such consolidation or
into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an
entirety shall be a Person organized and validly existing
under the laws of the United States, any State thereof or
the District of Columbia, and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and premium, if any,
and interest, if any, on all Outstanding Securities and the
performance of every covenant of this Indenture on the part
of the Company to be performed or observed;
(b) immediately after giving effect to such
transaction no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, conveyance, or
other transfer or lease and such supplemental indenture
comply with this Article and that all conditions precedent
herein provided for relating to such transactions have been
complied with.
SECTION 1102. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation by the Company with or merger by
the Company into any other corporation or any conveyance, or
other transfer or lease of the properties and assets of the
Company substantially as an entirety in accordance with Section
1101, the successor corporation formed by such consolidation or
into which the Company is merged or the Person to which such
conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor Person
shall be relieved of all obligations and covenants under this
Indenture and the Securities Outstanding hereunder.
ARTICLE TWELVE
SUPPLEMENTAL INDENTURES
SECTION 1201. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS.
Without the consent of any Holders, the Company and the
Trustee, at any time and from time to time, may enter into one or
more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to
the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities, all
as provided in Article Eleven; or
(b) to add one or more covenants of the Company or
other provisions for the benefit of all Holders or for the
benefit of the Holders of, or to remain in effect only so
long as there shall be Outstanding, Securities of one or
more specified series, or to surrender any right or power
herein conferred upon the Company; or
(c) to add any additional Events of Default with
respect to all or any series of Securities Outstanding
hereunder; or
(d) to change or eliminate any provision of this
Indenture or to add any new provision to this Indenture;
provided, however, that if such change, elimination or
addition shall adversely affect the interests of the Holders
of Securities of any series Outstanding on the date of such
indenture supplemental hereto in any material respect, such
change, elimination or addition shall become effective with
respect to such series only pursuant to the provisions of
Section 1202 hereof or when no Security of such series
remains Outstanding; or
(e) to provide collateral security for all but not
part of the Securities; or
(f) to establish the form or terms of Securities of
any series as contemplated by Sections 201 and 301; or
(g) to provide for the authentication and delivery of
bearer securities and coupons appertaining thereto
representing interest, if any, thereon and for the
procedures for the registration, exchange and replacement
thereof and for the giving of notice to, and the
solicitation of the vote or consent of, the holders thereof,
and for any and all other matters incidental thereto; or
(h) to evidence and provide for the acceptance of
appointment hereunder by a separate or successor Trustee
with respect to the Securities of one or more series and to
add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 911(b); or
(i) to provide for the procedures required to permit
the Company to utilize, at its option, a noncertificated
system of registration for all, or any series of, the
Securities; or
(j) to change any place or places where (i) the
principal of and premium, if any, and interest, if any, on
all or any series of Securities shall be payable, (ii) all
or any series of Securities may be surrendered for
registration of transfer, (iii) all or any series of
Securities may be surrendered for exchange and (iv) notices
and demands to or upon the Company in respect of all or any
series of Securities and this Indenture may be served; or
(k) to cure any ambiguity, to correct or supplement
any provision herein which may be defective or inconsistent
with any other provision herein, or to make any other
changes to the provisions hereof or to add other provisions
with respect to matters or questions arising under this
Indenture, provided that such other changes or additions
shall not adversely affect the interests of the Holders of
Securities of any series in any material respect.
Without limiting the generality of the foregoing, if
the Trust Indenture Act as in effect at the date of the execution
and delivery of this Indenture or at any time thereafter shall be
amended and
(x) if any such amendment shall require one or
more changes to any provisions hereof or the inclusion
herein of any additional provisions, or shall by
operation of law be deemed to effect such changes or
incorporate such provisions by reference or otherwise,
this Indenture shall be deemed to have been amended so
as to conform to such amendment to the Trust Indenture
Act, and the Company and the Trustee may, without the
consent of any Holders, enter into an indenture
supplemental hereto to effect or evidence such changes
or additional provisions; or
(y) if any such amendment shall permit one or
more changes to, or the elimination of, any provisions
hereof which, at the date of the execution and delivery
hereof or at any time thereafter, are required by the
Trust Indenture Act to be contained herein, this
Indenture shall be deemed to have been amended to
effect such changes or elimination, and the Company and
the Trustee may, without the consent of any Holders,
enter into an indenture supplemental hereto to evidence
such amendment hereof.
SECTION 1202. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a
majority in aggregate principal amount of the Securities of all
series then Outstanding under this Indenture, considered as one
class, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to,
or changing in any manner or eliminating any of the provisions
of, this Indenture or modifying in any manner the rights of the
Holders of Securities of such series under the Indenture;
provided, however, that if there shall be Securities of more than
one series Outstanding hereunder and if a proposed supplemental
indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such series,
then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all series so
directly affected, considered as one class, shall be required;
and provided, further, that no such supplemental indenture shall:
(a) change the Stated Maturity of the principal of, or
any installment of principal of or interest on (except as
provided in Section 311 hereof), any Security, or reduce the
principal amount thereof or the rate of interest thereon (or
the amount of any installment of interest thereon) or change
the method of calculating such rate or reduce any premium
payable upon the redemption thereof, or change the coin or
currency (or other property), in which any Security or any
premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such
payment on or after the Stated Maturity of any Security (or,
in the case of redemption, on or after the Redemption Date),
without, in any such case, the consent of the Holder of such
Security, or
(b) reduce the percentage in principal amount of the
Outstanding Securities of any series (or, if applicable, in
liquidation preference of any series of Preferred
Securities), the consent of the Holders of which is required
for any such supplemental indenture, or the consent of the
Holders of which is required for any waiver of compliance
with any provision of this Indenture or of any default
hereunder and its consequences, or reduce the requirements
of Section 1304 for quorum or voting, without, in any such
case, the consent of the Holders of each Outstanding
Security of such series, or
(c) modify any of the provisions of this Section,
Section 607 or Section 813 with respect to the Securities of
any series, except to increase the percentages in principal
amount referred to in this Section or such other Sections or
to provide that other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; provided, however,
that this clause shall not be deemed to require the consent
of any Holder with respect to changes in the references to
"the Trustee" and concomitant changes in this Section, or
the deletion of this proviso, in accordance with the
requirements of Sections 911(b) and 1201(h).
Notwithstanding the foregoing, so long as any of the Preferred
Securities remain outstanding, the Trustee may not consent to a
supplemental indenture under this Section 1202 without the prior
consent, obtained as provided in a Trust Agreement pertaining to
a Trust which issued such Preferred Securities, of the holders of
not less than a majority in aggregate liquidation preference of
all Preferred Securities issued by such Trust affected,
considered as one class, or, in the case of changes described in
clauses (a), (b) and (c) above, 100% in aggregate liquidation
preference of all such Preferred Securities then outstanding
which would be affected thereby, considered as one class. A
supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series
of Securities, or which modifies the rights of the Holders of
Securities of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof. A waiver by a Holder of
such Holder's right to consent under this Section shall be deemed
to be a consent of such Holder.
SECTION 1203. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts
created by, any supplemental indenture permitted by this Article
or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject
to Section 901) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter
into any such supplemental indenture which affects the Trustee's
own rights, duties, immunities or liabilities under this
Indenture or otherwise.
SECTION 1204. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby. Any supplemental indenture permitted by
this Article may restate this Indenture in its entirety, and,
upon the execution and delivery thereof, any such restatement
shall supersede this Indenture as theretofore in effect for all
purposes.
SECTION 1205. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture
Act as then in effect.
SECTION 1206. REFERENCE IN SECURITIES TO SUPPLEMENTAL
INDENTURES.
Securities of any series authenticated and delivered
after the execution of any supplemental indenture pursuant to
this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series so modified as
to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
SECTION 1207. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE.
If the terms of any particular series of Securities
shall have been established in a Board Resolution or an Officer's
Certificate as contemplated by Section 301, and not in an
indenture supplemental hereto, additions to, changes in or the
elimination of any of such terms may be effected by means of a
supplemental Board Resolution or Officer's Certificate, as the
case may be, delivered to, and accepted by, the Trustee;
provided, however, that such supplemental Board Resolution or
Officer's Certificate shall not be accepted by the Trustee or
otherwise be effective unless all conditions set forth in this
Indenture which would be required to be satisfied if such
additions, changes or elimination were contained in a
supplemental indenture shall have been appropriately satisfied.
Upon the acceptance thereof by the Trustee, any such supplemental
Board Resolution or Officer's Certificate shall be deemed to be a
"supplemental indenture" for purposes of Section 1204 and 1206.
ARTICLE THIRTEEN
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities of one or more, or
all, series may be called at any time and from time to time
pursuant to this Article to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be made, given or
taken by Holders of Securities of such series.
SECTION 1302. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of
Holders of Securities of one or more, or all, series for any
purpose specified in Section 1301, to be held at such time
and at such place in the Borough of Manhattan, The City of
New York, as the Trustee shall determine, or, with the
approval of the Company, at any other place. Notice of
every such meeting, setting forth the time and the place of
such meeting and in general terms the action proposed to be
taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 180
days prior to the date fixed for the meeting.
(b) If the Trustee shall have been requested to call a
meeting of the Holders of Securities of one or more, or all,
series by the Company or by the Holders of 33% in aggregate
principal amount of all of such series, considered as one
class, for any purpose specified in Section 1301, by written
request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall
not have given the notice of such meeting within 21 days
after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein,
then the Company or the Holders of Securities of such series
in the amount above specified, as the case may be, may
determine the time and the place in the Borough of
Manhattan, The City of New York, or in such other place as
shall be determined or approved by the Company, for such
meeting and may call such meeting for such purposes by
giving notice thereof as provided in subsection (a) of this
Section.
(c) Any meeting of Holders of Securities of one or
more, or all, series shall be valid without notice if the
Holders of all Outstanding Securities of such series are
present in person or by proxy and if representatives of the
Company and the Trustee are present, or if notice is waived
in writing before or after the meeting by the Holders of all
Outstanding Securities of such series, or by such of them as
are not present at the meeting in person or by proxy, and by
the Company and the Trustee.
SECTION 1303. PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of
Securities of one or more, or all, series a Person shall be (a) a
Holder of one or more Outstanding Securities of such series, or
(b) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such
series by such Holder or Holders. The only Persons who shall be
entitled to attend any meeting of Holders of Securities of any
series shall be the Persons entitled to vote at such meeting and
their counsel, any representatives of the Trustee and its counsel
and any representatives of the Company and its counsel.
SECTION 1304. QUORUM; ACTION.
The Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities of the series with
respect to which a meeting shall have been called as hereinbefore
provided, considered as one class, shall constitute a quorum for
a meeting of Holders of Securities of such series; provided,
however, that if any action is to be taken at such meeting which
this Indenture expressly provides may be taken by the Holders of
a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of such series,
considered as one class, the Persons entitled to vote such
specified percentage in principal amount of the Outstanding
Securities of such series, considered as one class, shall
constitute a quorum. In the absence of a quorum within one hour
of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series,
be dissolved. In any other case the meeting may be adjourned for
such period as may be determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may
be further adjourned for such period as may be determined by the
chairman of the meeting prior to the adjournment of such
adjourned meeting. Except as provided by Section 1305(e), notice
of the reconvening of any meeting adjourned for more than 30 days
shall be given as provided in Section 1302(a) not less than 10
days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such series
which shall constitute a quorum.
Except as limited by Section 1202, any resolution
presented to a meeting or adjourned meeting duly reconvened at
which a quorum is present as aforesaid may be adopted only by the
affirmative vote of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of the series with
respect to which such meeting shall have been called, considered
as one class; provided, however, that, except as so limited, any
resolution with respect to any action which this Indenture
expressly provides may be taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of
the Outstanding Securities of such series, considered as one
class, may be adopted at a meeting or an adjourned meeting duly
reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the Holders of such specified percentage in
principal amount of the Outstanding Securities of such series,
considered as one class.
Any resolution passed or decision taken at any meeting
of Holders of Securities duly held in accordance with this
Section shall be binding on all the Holders of Securities of the
series with respect to which such meeting shall have been held,
whether or not present or represented at the meeting.
SECTION 1305. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING
RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Holders of Securities
may be in person or by proxy; and, to the extent permitted
by law, any such proxy shall remain in effect and be binding
upon any future Holder of the Securities with respect to
which it was given unless and until specifically revoked by
the Holder or future Holder of such Securities before being
voted.
(b) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations
as it may deem advisable for any meeting of Holders of
Securities in regard to proof of the holding of such
Securities and of the appointment of proxies and in regard
to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by
any such regulations, the holding of Securities shall be
proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner
specified in Section 104. Such regulations may provide that
written instruments appointing proxies, regular on their
face, may be presumed valid and genuine without the proof
specified in Section 104 or other proof.
(c) The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the
meeting shall have been called by the Company or by Holders
as provided in Section 1302(b), in which case the Company or
the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the Persons entitled
to vote a majority in aggregate principal amount of the
Outstanding Securities of all series represented at the
meeting, considered as one class.
(d) At any meeting each Holder or proxy shall be
entitled to one vote for each $1 principal amount of
Securities held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in
respect of any Security challenged as not Outstanding and
ruled by the chairman of the meeting to be not Outstanding.
The chairman of the meeting shall have no right to vote,
except as a Holder of a Security or proxy.
(e) Any meeting duly called pursuant to Section 1302
at which a quorum is present may be adjourned from time to
time by Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities of all series
represented at the meeting, considered as one class; and the
meeting may be held as so adjourned without further notice.
SECTION 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting
of Holders shall be by written ballots on which shall be
subscribed the signatures of the Holders or of their
representatives by proxy and the principal amounts and serial
numbers of the Outstanding Securities, of the series with respect
to which the meeting shall have been called, held or represented
by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports of
all votes cast at the meeting. A record of the proceedings of
each meeting of Holders shall be prepared by the secretary of the
meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of
the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1302
and, if applicable, Section 1304. Each copy shall be signed and
verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to
the Company, and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at
the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
SECTION 1307. ACTION WITHOUT MEETING.
In lieu of a vote of Holders at a meeting as
hereinbefore contemplated in this Article, any request, demand,
authorization, direction, notice, consent, waiver or other action
may be made, given or taken by Holders by written instruments as
provided in Section 104.
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 1401. LIABILITY SOLELY CORPORATE.
No recourse shall be had for the payment of the
principal of or premium, if any, or interest, if any, on any
Securities, or any part thereof, or for any claim based thereon
or otherwise in respect thereof, or of the indebtedness
represented thereby, or upon any obligation, covenant or
agreement under this Indenture, against any incorporator,
stockholder, officer or director, as such, past, present or
future of the Company or of any predecessor or successor
corporation (either directly or through the Company or a
predecessor or successor corporation), whether by virtue of any
constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being
expressly agreed and understood that this Indenture and all the
Securities are solely corporate obligations, and that no personal
liability whatsoever shall attach to, or be incurred by, any
incorporator, stockholder, officer or director, past, present or
future, of the Company or of any predecessor or successor
corporation, either directly or indirectly through the Company or
any predecessor or successor corporation, because of the
indebtedness hereby authorized or under or by reason of any of
the obligations, covenants or agreements contained in this
Indenture or in any of the Securities or to be implied herefrom
or therefrom, and that any such personal liability is hereby
expressly waived and released as a condition of, and as part of
the consideration for, the execution of this Indenture and the
issuance of the Securities.
ARTICLE FIFTEEN
SUBORDINATION OF SECURITIES
SECTION 1501. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company, for itself, its successors and assigns,
covenants and agrees, and each Holder of the Securities of each
series, by its acceptance thereof, likewise covenants and agrees,
that the payment of the principal of and premium, if any, and
interest, if any, on each and all of the Securities is hereby
expressly subordinated and subject to the extent and in the
manner set forth in this Article, in right of payment to the
prior payment in full of all Senior Indebtedness.
Each Holder of the Securities of each series, by its
acceptance thereof, authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article, and
appoints the Trustee its attorney-in-fact for any and all such
purposes.
SECTION 1502. PAYMENT OVER OF PROCEEDS OF SECURITIES.
In the event (a) of any insolvency or bankruptcy
proceedings or any receivership, liquidation, reorganization or
other similar proceedings in respect of the Company or a
substantial part of its property, or of any proceedings for
liquidation, dissolution or other winding up of the Company,
whether or not involving insolvency or bankruptcy, or (b) subject
to the provisions of Section 1503, that (i) a default shall have
occurred with respect to the payment of principal of or interest
on or other monetary amounts due and payable on any Senior
Indebtedness, or (ii) there shall have occurred a default (other
than a default in the payment of principal or interest or other
monetary amounts due and payable) in respect of any Senior
Indebtedness, as defined therein or in the instrument under which
the same is outstanding, permitting the holder or holders thereof
to accelerate the maturity thereof (with notice or lapse of time,
or both), and such default shall have continued beyond the period
of grace, if any, in respect thereof, and, in the cases of
subclauses (i) and (ii) of this clause (b), such default shall
not have been cured or waived or shall not have ceased to exist,
or (c) that the principal of and accrued interest on the
Securities of any series shall have been declared due and payable
pursuant to Section 801 and such declaration shall not have been
rescinded and annulled as provided in Section 802, then:
(1) the holders of all Senior Indebtedness
shall first be entitled to receive payment of the
full amount due thereon, or provision shall be
made for such payment in money or money's worth,
before the Holders of any of the Securities are
entitled to receive a payment on account of the
principal of or interest on the indebtedness
evidenced by the Securities, including, without
limitation, any payments made pursuant to Articles
Four and Five;
(2) any payment by, or distribution of
assets of, the Company of any kind or character,
whether in cash, property or securities, to which
any Holder or the Trustee would be entitled except
for the provisions of this Article, shall be paid
or delivered by the person making such payment or
distribution, whether a trustee in bankruptcy, a
receiver or liquidating trustee or otherwise,
directly to the holders of such Senior
Indebtedness or their representative or
representatives or to the trustee or trustees
under any indenture under which any instruments
evidencing any of such Senior Indebtedness may
have been issued, ratably according to the
aggregate amounts remaining unpaid on account of
such Senior Indebtedness held or represented by
each, to the extent necessary to make payment in
full of all Senior Indebtedness remaining unpaid
after giving effect to any concurrent payment or
distribution (or provision therefor) to the
holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of
the indebtedness evidenced by the Securities or to
the Trustee under this Indenture; and
(3) in the event that, notwithstanding the
foregoing, any payment by, or distribution of
assets of, the Company of any kind or character,
whether in cash, property or securities, in
respect of principal of or interest on the
Securities or in connection with any repurchase by
the Company of the Securities, shall be received
by the Trustee or any Holder before all Senior
Indebtedness is paid in full, or provision is made
for such payment in money or money's worth, such
payment or distribution in respect of principal of
or interest on the Securities or in connection
with any repurchase by the Company of the
Securities shall be paid over to the holders of
such Senior Indebtedness or their representative
or representatives or to the trustee or trustees
under any indenture under which any instruments
evidencing any such Senior Indebtedness may have
been issued, ratably as aforesaid, for application
to the payment of all Senior Indebtedness
remaining unpaid until all such Senior
Indebtedness shall have been paid in full, after
giving effect to any concurrent payment or
distribution (or provision therefor) to the
holders of such Senior Indebtedness.
Notwithstanding the foregoing, at any time after the
123rd day following the date of deposit of cash or Government
Obligations pursuant to Section 701 (provided all conditions set
out in such Section shall have been satisfied), the funds so
deposited and any interest thereon will not be subject to any
rights of holders of Senior Indebtedness including, without
limitation, those arising under this Article Fifteen; provided
that no event described in clauses (d) and (e) of Section 801
with respect to the Company has occurred during such 123-day
period.
For purposes of this Article only, 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 or
reorganization or readjustment which are subordinate in right of
payment to all Senior Indebtedness which may at the time be
outstanding to the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article.
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 Eleven hereof shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of
this Section 1502 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with
the conditions stated in Article Eleven hereof. Nothing in
Section 1501 or in this Section 1502 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 907.
SECTION 1503. DISPUTES WITH HOLDERS OF CERTAIN SENIOR
INDEBTEDNESS.
Any failure by the Company to make any payment on or
perform any other obligation in respect of Senior Indebtedness,
other than any indebtedness incurred by the Company or assumed or
guaranteed, directly or indirectly, by the Company for money
borrowed (or any deferral, renewal, extension or refunding
thereof) or any other obligation as to which the provisions of
this Section shall have been waived by the Company in the
instrument or instruments by which the Company incurred, assumed,
guaranteed or otherwise created such indebtedness or obligation,
shall not be deemed a default under clause (b) of Section 1502 if
(i) the Company shall be disputing its obligation to make such
payment or perform such obligation and (ii) either (A) no final
judgment relating to such dispute shall have been issued against
the Company which is in full force and effect and is not subject
to further review, including a judgment that has become final by
reason of the expiration of the time within which a party may
seek further appeal or review, or (B) in the event that a
judgment that is subject to further review or appeal has been
issued, the Company shall in good faith be prosecuting an appeal
or other proceeding for review and a stay or execution shall have
been obtained pending such appeal or review.
SECTION 1504. SUBROGATION.
Senior Indebtedness shall not be deemed to have been
paid in full unless the holders thereof shall have received cash
(or securities or other property satisfactory to such holders) in
full payment of such Senior Indebtedness then outstanding.
Subject to the prior payment in full of all Senior Indebtedness,
the rights of the Holders of the Securities shall be subrogated
to the rights of the holders of Senior Indebtedness to receive
any further payments or distributions of cash, property or
securities of the Company applicable to the holders of the Senior
Indebtedness until all amounts owing on the Securities shall be
paid in full; and such payments or distributions of cash,
property or securities received by the Holders of the Securities,
by reason of such subrogation, which otherwise would be paid or
distributed to the holders of such Senior Indebtedness shall, as
between the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders, be deemed to be a payment
by the Company to or on account of Senior Indebtedness, it being
understood that the provisions of this Article are and are
intended solely for the purpose of defining the relative rights
of the Holders, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
SECTION 1505. OBLIGATION OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as
among the Company, its creditors other than the holders of Senior
Indebtedness and the Holders, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders the
principal of and interest on the Securities 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
and creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the
Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article of the holders
of 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 or
securities of the Company referred to in this Article, the
Trustee and the Holders shall be entitled to rely upon any order
or decree of a court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization
proceedings are pending for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders
of the 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.
SECTION 1506. PRIORITY OF SENIOR INDEBTEDNESS UPON MATURITY.
Upon the maturity of the principal of any Senior
Indebtedness by lapse of time, acceleration or otherwise, all
matured principal of Senior Indebtedness and interest and
premium, if any, thereon shall first be paid in full before any
payment of principal or premium, if any, or interest, if any, is
made upon the Securities or before any Securities can be acquired
by the Company or any sinking fund payment is made with respect
to the Securities (except that required sinking fund payments may
be reduced by Securities acquired before such maturity of such
Senior Indebtedness).
SECTION 1507. TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS.
The Trustee shall be entitled to all rights set forth
in this Article with respect to any Senior Indebtedness at any
time held by it, to the same extent as any other holder of Senior
Indebtedness. Nothing in this Article shall deprive the Trustee
of any of its rights as such holder.
SECTION 1508. NOTICE TO TRUSTEE TO EFFECTUATE SUBORDINATION.
Notwithstanding the provisions of this Article or any
other provision of the Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would
prohibit the making of any payment of moneys to or by the Trustee
unless and until the Trustee shall have received written notice
thereof from the Company, from a Holder or from a holder of any
Senior Indebtedness or from any representative or representatives
of such holder and, prior to the receipt of any such written
notice, the Trustee shall be entitled, subject to Section 901, in
all respects to assume that no such facts exist; provided,
however, that, if prior to the fifth Business Day preceding the
date upon which by the terms hereof any such moneys may become
payable for any purpose, or in the event of the execution of an
instrument pursuant to Section 702 acknowledging satisfaction and
discharge of this Indenture, then if prior to the second Business
Day preceding the date of such execution, the Trustee shall not
have received with respect to such moneys the notice provided for
in this Section, then, anything herein contained to the contrary
notwithstanding, the Trustee may, in its discretion, receive such
moneys and/or apply the same to the purpose for which they were
received, and shall not be affected by any notice to the
contrary, which may be received by it on or after such date;
provided, however, that no such application shall affect the
obligations under this Article of the persons receiving such
moneys from the Trustee.
SECTION 1509. MODIFICATION, EXTENSION, ETC. OF SENIOR
INDEBTEDNESS.
The holders of Senior Indebtedness may, without
affecting in any manner the subordination of the payment of the
principal of and premium, if any, and interest, if any, on the
Securities, at any time or from time to time and in their
absolute discretion, agree with the Company to change the manner,
place or terms of payment, change or extend the time of payment
of, or renew or alter, any Senior Indebtedness, or amend or
supplement any instrument pursuant to which any Senior
Indebtedness is issued, or exercise or refrain from exercising
any other of their rights under the Senior Indebtedness
including, without limitation, the waiver of default thereunder,
all without notice to or assent from the Holders or the Trustee.
SECTION 1510. TRUSTEE HAS NO FIDUCIARY DUTY TO HOLDERS OF SENIOR
INDEBTEDNESS.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its
covenants and objectives as are specifically set forth in this
Indenture, and no implied covenants or obligations with respect
to the holders of Senior Indebtedness shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of Senior Indebtedness,
and shall not be liable to any such holders if it shall
mistakenly pay over or deliver to the Holders or the Company or
any other Person, money or assets to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article or
otherwise.
SECTION 1511. PAYING AGENTS OTHER THAN THE TRUSTEE.
In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context shall otherwise require)
be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if
such Paying Agent were named in this Article in addition to or in
place of the Trustee; provided, however, that Sections 1507, 1508
and 1510 shall not apply to the Company if it acts as Paying
Agent.
SECTION 1512. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS NOT
IMPAIRED.
No right of any present or future holder of Senior
Indebtedness to enforce the subordination herein shall at any
time or in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any noncompliance
by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
SECTION 1513. EFFECT OF SUBORDINATION PROVISIONS; TERMINATION.
Notwithstanding anything contained herein to the
contrary, other than as provided in the immediately succeeding
sentence, all the provisions of this Indenture shall be subject
to the provisions of this Article, so far as the same may be
applicable thereto.
Notwithstanding anything contained herein to the
contrary, the provisions of this Article Fifteen shall be of no
further effect, and the Securities shall no longer be
subordinated in right of payment to the prior payment of Senior
Indebtedness, if the Company shall have delivered to the Trustee
a notice to such effect. Any such notice delivered by the
Company shall not be deemed to be a supplemental indenture for
purposes of Article Twelve.
_________________________
<PAGE>
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first
above written.
DELMARVA POWER & LIGHT COMPANY
By:
--------------------------
WILMINGTON TRUST COMPANY, Trustee
By:
--------------------------
<PAGE>
STATE OF DELAWARE )
) ss.:
COUNTY OF )
On the __th day of ________, 1996, before me personally
came ________ _______, to me known, who, being by me duly sworn,
did depose and say that he is the ________________ of Delmarva
Power & Light Company, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to 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.
-----------------------------
<PAGE>
STATE OF DELAWARE )
) ss.:
COUNTY OF )
On the __th day of __________, 1996, before me
personally came ________________________, to me known, who, being
by me duly sworn, did depose and say that he is a
___________________ of Wilmington Trust Company, one of the
corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the
seal affixed to 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.
--------------------------------
Exhibit 4-D
GUARANTEE AGREEMENT
Between
Delmarva Power & Light Company
(as Guarantor)
and
Wilmington Trust Company
(as Trustee)
dated as of
_____________, 1996
<PAGE>
TABLE OF CONTENTS
-----------------
Page
-----
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . 1
SECTION 1.01 Definitions . . . . . . . . . . . . 1
ARTICLE II TRUST INDENTURE ACT . . . . . . . . . . . . 3
SECTION 2.01 Conflict with Trust Indenture Act . 3
SECTION 2.02 Lists of Holders of Preferred
Securities . . . . . . . . . . . . . 3
SECTION 2.03 Reports by the Guarantee Trustee . . 3
SECTION 2.04 Periodic Reports to Guarantee
Trustee. . . . . . . . . . . . . . . 4
SECTION 2.06 Events of Default; Waiver . . . . . 4
SECTION 2.07 Event of Default; Notice . . . . . . 4
ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE
TRUSTEE . . . . . . . . . . . . . . . . . . 5
SECTION 3.01 Powers and Duties of the Guarantee
Trustee. . . . . . . . . . . . . . . 5
SECTION 3.02 Certain Rights of Guarantee
Trustee. . . . . . . . . . . . . . . 6
ARTICLE IV GUARANTEE TRUSTEE . . . . . . . . . . . . 8
SECTION 4.01 Guarantee Trustee; Eligibility . . . 8
SECTION 4.02 Compensation and Reimbursement . . . 9
SECTION 4.03 Appointment, Removal and
Resignation of Guarantee Trustee . . 10
ARTICLE V GUARANTEE . . . . . . . . . . . . . . . . . . 10
SECTION 5.01 Guarantee . . . . . . . . . . . . . 10
SECTION 5.02 Waiver of Notice and Demand . . . . 11
SECTION 5.03 Obligations Not Affected . . . . . . 11
SECTION 5.04 Rights of Holders . . . . . . . . . 12
SECTION 5.05 Guarantee of Payment . . . . . . . . 12
SECTION 5.06 Subrogation . . . . . . . . . . . . 12
SECTION 5.07 Independent Obligations . . . . . . 12
ARTICLE VI SUBORDINATION . . . . . . . . . . . . . . 13
SECTION 6.01 Subordination . . . . . . . . . . . 13
ARTICLE VII TERMINATION . . . . . . . . . . . . . . . 13
SECTION 7.01 Termination . . . . . . . . . . . . 13
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . 13
SECTION 8.01 Successors and Assigns . . . . . . . 13
SECTION 8.02 Amendments . . . . . . . . . . . . . 13
SECTION 8.03 Notices . . . . . . . . . . . . . . 14
SECTION 8.04 Benefit . . . . . . . . . . . . . . 15
SECTION 8.05 Interpretation . . . . . . . . . . . 15
SECTION 8.06 Governing Law . . . . . . . . . . . 15
<PAGE>
CROSS-REFERENCE TABLE
---------------------
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
------------------ ---------
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . 4.01(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . 4.01(c), 2.08
310(c) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(b)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(b)
313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
314(b) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
314(d) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . 1.01, 2.05,
3.02
314(f) . . . . . . . . . . . . . . . . . . . . . . . 2.01, 3.02
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . 3.01(c)
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.07
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . 3.01(c)
316(a) . . . . . . . . . . . . . . . . . . . . . . 5.04(a), 2.06
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
317(a) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
317(b) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.01(b)
318(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
318(c) . . . . . . . . . . . . . . . . . . . . . . . . . 2.01(a)
------------
* This Cross-Reference Table does not constitute part of the
Guarantee Agreement and shall not affect the interpretation
of any of its terms or provisions.
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated
as of ______________, 1996, is executed and delivered by Delmarva
Power & Light Company, a Delaware and Virginia corporation (the
"Guarantor"), and Wilmington Trust Company, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined
herein) of Delmarva Power Financing I, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust
Agreement (the "Trust Agreement"), dated as of ______________,
1996, between the Trustees of the Issuer named therein and
Delmarva Power & Light Company, as Depositor, the Issuer is
issuing as of the date hereof $______________ aggregate
liquidation amount of its ____% Trust Preferred Capital
Securities (the "Preferred Securities") representing preferred
undivided beneficial ownership interests in the Issuer and having
the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities are to be issued for
sale by the Issuer and the proceeds are to be invested in
$______________ principal amount of Debentures (as defined in the
Trust Agreement); and
WHEREAS, in order to enhance the value of the Preferred
Securities, the Guarantor desires to irrevocably and
unconditionally agree, to the extent set forth herein, to pay to
the Holders the Guarantee Payments (as defined herein) and to
make certain other payments on the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the purchase of
Debentures, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders from time to
time.
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Guarantee
Agreement, the terms set forth below shall, unless the context
otherwise requires, have the following meanings. Capitalized or
otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust
Agreement as in effect on the date hereof.
"Event of Default" means a default by the Guarantor on
any of its payment obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments
or distributions, without duplication, with respect to the
Preferred Securities, to the extent not paid or made by or on
behalf of the Issuer: (a) any accrued and unpaid Distributions
that are required to be paid on such Preferred Securities but
only if and to the extent that the Property Trustee has available
in the Payment Account funds sufficient to make such payment, (b)
the Redemption Price with respect to the Preferred Securities
called for redemption by the Issuer but only if and to the extent
that the Property Trustee has available in the Payment Account
funds sufficient to make such payment, (c) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer
(unless the Debentures are distributed to the Holders of such
Preferred Securities), the lesser of (i) the aggregate of the
Liquidation Amount and all accrued and unpaid Distributions on
the Preferred Securities to the date of payment, and (ii) the
amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer (the
"Liquidation Distribution").
"Guarantee Trustee" means Wilmington Trust Company
until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee
Agreement and thereafter means each such Successor Guarantee
Trustee.
"Holder" shall mean any Person in whose name any
Preferred Securities are registered in the Securities Registrar;
provided, however, that, in determining whether the Holders of
the requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indenture" means the Indenture dated as of
______________, 1996, between the Guarantor (the "Debenture
Issuer") and Wilmington Trust Company, as trustee, pursuant to
which the Debentures are issued.
"Officer's Certificate" means a certificate signed by
the Chairman of the Board, the President, a Vice President, the
Treasurer or an Assistant Treasurer of the Guarantor, and
delivered to the Guarantee Trustee. Any Officer's Certificate
delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that the officer signing the Officer's
Certificate has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by such officer in
rendering the Officer's Certificate;
(c) a statement that such officer has made such
examination or investigation as, in such officer's opinion,
is necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of such
officer, such condition or covenant has been complied with.
"Responsible Officer" means, with respect to the
Guarantee Trustee, any officer of the Guarantee Trustee assigned
by the Guarantee Trustee to administer its corporate trust
matters.
"Successor Guarantee Trustee" means a successor
Guarantee Trustee possessing the qualifications to act as
Guarantee Trustee under Section 4.01.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Guarantee Agreement limits,
qualifies or conflicts with another provision hereof which is
required or deemed to be included in this Guarantee Agreement by,
or is otherwise governed by, any of the provisions of the Trust
Indenture Act, such other provision shall control; and if any
provision hereof otherwise conflicts with the Trust Indenture
Act, the Trust Indenture Act shall control.
SECTION 2.02 LISTS OF HOLDERS OF PREFERRED
SECURITIES.
(a) Semiannually, not later than June 1 and December 1
in each year, commencing December 1, 1996, and at such other
times as the Guarantee Trustee may request in writing, the
Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee information as to the names and addresses of the Holders,
and the Guarantee Trustee shall preserve such information and
similar information received by it in any other capacity and
afford to the Holders access to information received by it in any
other capacity and afford to the Holders access to information so
preserved by it, all to such extent, if any, and in such manner
as shall be required by the Trust Indenture Act.
(b) The Guarantee Trustee shall comply with its
obligations under Section 311(a) of the Trust Indenture Act,
subject to the provisions of Section 311(b) and Section 312(b) of
the Trust Indenture Act.
SECTION 2.03 REPORTS BY THE GUARANTEE TRUSTEE. (a)
The Guarantee Trustee shall transmit to Holders such reports
concerning the Guarantee Trustee and its actions under this
Guarantee Agreement as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant
thereto. Such of those reports as are required to be transmitted
by the Guarantee Trustee pursuant to Section 313(a) of the Trust
Indenture Act shall be so transmitted within 60 days after
December 31 of each year, commencing December 31, 1996.
(b) A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Guarantee Trustee
with each stock exchange upon which the Preferred Securities are
listed, with the Commission and with the Guarantor. The
Guarantor shall notify the Guarantee Trustee when any Preferred
Securities shall have been listed on any stock exchange.
SECTION 2.04 PERIODIC REPORTS TO GUARANTEE TRUSTEE.
The Guarantor shall provide to the Guarantee Trustee such
documents, reports, compliance certificates and information as
may be required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required thereby.
SECTION 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT. The Guarantor shall provide to the Guarantee Trustee
such evidence of compliance with any conditions precedent
provided for in this Guarantee Agreement as and to the extent
required by Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act may be
given in the form of an Officer's Certificate.
SECTION 2.06 EVENTS OF DEFAULT; WAIVER. The Holders
of a majority in liquidation amount of Outstanding Preferred
Securities may, by vote, on behalf of all of the Holders, waive
any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event
of Default or impair any right consequent thereon.
SECTION 2.07 EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall give notice of any
Event of Default hereunder to the Holders in the manner and to
the extent required to do so by the Trust Indenture Act, unless
such Event of Default shall have been cured or waived.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee Trustee
shall have received written notice of such Event of Default.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01 POWERS AND DUTIES OF THE GUARANTEE
TRUSTEE.
(a) This Guarantee Agreement shall be held by the
Guarantee Trustee for the benefit of the Holders, and the
Guarantee Trustee shall not transfer this Guarantee Agreement or
any rights hereunder to any Person except a Holder exercising his
or her rights pursuant to Section 5.04 or to a Successor
Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee.
The right, title and interest of the Guarantee Trustee shall vest
automatically in any Successor Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Guarantee Trustee.
(b) The Guarantee Trustee, prior to the occurrence of
any Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform only
such duties as are specifically set forth in this Guarantee
Agreement, and no implied covenants or obligations shall be read
into this Guarantee Agreement against the Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.06), the Guarantee Trustee shall
exercise such of the rights and powers vested in it by this
Guarantee Agreement, and use the same degree of care and skill in
its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(c) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(i) prior to the occurrence of any Event of
Default and after the curing or waiving of all such
Events of Default that may have occurred:
(A) the duties and obligations of the
Guarantee Trustee shall be determined solely by
the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties
and obligations as are specifically set forth in
this Guarantee Agreement; and
(B) in the absence of bad faith on the part
of the Guarantee Trustee, the Guarantee Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee
Agreement; provided, however, that in the case of
any such certificates or opinions that by any
provision hereof are specifically required to be
furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same
to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a
Responsible Officer of the Guarantee Trustee, unless it
shall be proved that the Guarantee Trustee or such
Responsible Officer was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken
by it in good faith in accordance with the direction of
the Holders of a Majority in liquidation amount of the
Preferred Securities relating to the time, method and
place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any
trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement
shall require the Guarantee Trustee to expend or risk
its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if the
Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability
is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such
risk or liability is not reasonably assured to it.
SECTION 3.02 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) the Guarantee Trustee may rely and shall
be fully protected in acting or refraining from acting
upon any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have
been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be
sufficiently evidenced by an Officer's Certificate;
(iii) whenever, in the administration of
this Guarantee Agreement, the Guarantee Trustee shall
deem it desirable that a matter be proved or
established before taking, suffering or omitting any
action hereunder, the Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon
an Officer's Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with
counsel of its choice, and the written advice or
opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with such
advice or opinion; such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any
of its employees; the Guarantee Trustee shall have the
right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any
court of competent jurisdiction;
(v) the Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Guarantee Agreement at the request
or direction of any Holder, unless such Holder shall
have provided to the Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable
person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by
it in complying with such request or direction,
including such reasonable advances as may be requested
by the Guarantee Trustee; provided, however, that
nothing contained in this Section 3.02(a)(v) shall be
taken to relieve the Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this
Guarantee Agreement;
(vi) the Guarantee Trustee shall not be bound
to make any investigation into the facts or matters
stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document
reasonably believed by it to be genuine, but the
Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit;
(vii) the Guarantee Trustee may execute
any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through
agents or attorneys, and the Guarantee Trustee shall
not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due
care by it hereunder;
(viii) whenever in the administration of
this Guarantee Agreement the Guarantee Trustee shall
deem it desirable to receive instructions with respect
to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders, (B) may refrain from
enforcing such remedy or right or taking such other
action until such instructions are received, and (C)
shall be protected in acting in accordance with such
instructions; and
(ix) the Guarantee Trustee shall not be
liable for any action taken, suffered or omitted to be
taken by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or
powers conferred upon it by this Guarantee.
(b) No provision of this Guarantee Agreement shall be
deemed to impose any duty or obligation on the Guarantee Trustee
to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in
which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable
law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or
authority available to the Guarantee Trustee shall be construed
to be a duty.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing
business under the laws of the United States of America
or any State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority.
If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to
above, then, for the purposes of this Section
4.01(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Guarantee Trustee shall cease
to be eligible to so act under Section 4.01(a), the Guarantee
Trustee shall immediately resign in the manner and with the
effect set out in Section 4.03(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Guarantee Trustee and Guarantor
shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
SECTION 4.02 COMPENSATION AND REIMBURSEMENT.
The Guarantor agrees:
(a) to pay the Guarantee Trustee from time to time
such reasonable compensation as the Guarantor and the Guarantee
Trustee shall from time to time agree in writing for all services
rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made
by the Guarantee Trustee in accordance with the provisions of
this Guarantee (including the reasonable compensation and
expenses of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence
or bad faith; and
(c) to indemnify each of the Guarantee Trustee and any
predecessor Guarantee Trustee for, and to hold it harmless from
and against, any and all loss, damage, claim, liability or
expense, including taxes (other than taxes based upon the income
of the Guarantee Trustee) incurred without negligence or bad
faith on its part, arising out of or in connection with the
acceptance of the administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance
of any its powers or duties hereunder.
As security for the performance of the obligations of
the Guarantor under this Section, the Guarantee Trustee shall
have a lien prior to the Preferred Securities upon all the
property and funds held or collected by the Guarantee Trustee as
such, except funds held in trust for the payment of principal of,
and premium (if any) or interest on, particular obligations of
the Guarantor under this Guarantee Agreement.
The provisions of this Section shall survive the
termination of this Guarantee Agreement.
SECTION 4.03 APPOINTMENT, REMOVAL AND RESIGNATION OF
GUARANTEE TRUSTEE.
(a) Subject to Section 4.03(b), unless an Event of
Default shall have occurred and be continuing, the Guarantee
Trustee may be appointed or removed without cause at any time by
the Guarantor.
(b) The Guarantee Trustee shall not be removed until a
Successor Guarantee Trustee has been appointed and has accepted
such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall
hold office until a Successor Guarantee Trustee shall have been
appointed or until its removal or resignation. The Guarantee
Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Guarantee
Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section
4.03 within 60 days after delivery to the Guarantor of an
instrument of resignation, the resigning Guarantee Trustee may
petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
(e) The Guarantor shall give notice of each
resignation and each removal of the Guarantee Trustee and each
appointment of a successor Guarantee Trustee to all Holders in
the manner provided in Section 8.03 hereof. Each notice shall
include the name of the successor Guarantee Trustee and the
address of its Corporate Trust Office.
ARTICLE V
GUARANTEE
SECTION 5.01 GUARANTEE. The Guarantor irrevocably
and unconditionally agrees to pay in full to the Holders the
Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
SECTION 5.02 WAIVER OF NOTICE AND DEMAND. The
Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a
proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices
and demands.
SECTION 5.03 OBLIGATIONS NOT AFFECTED. The
obligation of the Guarantor to make the Guarantee Payments under
this Guarantee Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of
any express or implied agreement, covenant, term or
condition relating to the Preferred Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the
Issuer of all or any portion of the Distributions,
Redemption Price, Liquidation Distribution or any other sums
payable under the terms of the Preferred Securities or the
extension of time for the performance of any other
obligation under, arising out of, or in connection with, the
Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures
permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence
on the part of the Holders to enforce, assert or exercise
any right, privilege, power or remedy conferred on the
Holders pursuant to the terms of the Preferred Securities,
or any action on the part of the Issuer granting indulgence
or extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership,
insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or
defense of a guarantor, it being the intent of this Section
5.03 that the obligations of the Guarantor hereunder shall
be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of
any of the foregoing.
SECTION 5.04 RIGHTS OF HOLDERS. The Guarantor
expressly acknowledges that: (a) this Guarantee Agreement will
be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (b) the Guarantee Trustee has the right
to enforce this Guarantee Agreement on behalf of the Holders; (c)
the Holders of a majority in liquidation amount of the
Outstanding Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of this
Guarantee Agreement or exercising any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and
(d) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee
Agreement without first instituting a legal proceeding against
the Issuer or any other person or entity.
SECTION 5.05 GUARANTEE OF PAYMENT. This Guarantee
Agreement creates a guarantee of payment and not of collection.
This Guarantee Agreement will not be discharged except by payment
of the Guarantee Payments in full (without duplication).
SECTION 5.06 SUBROGATION. The Guarantor shall be
subrogated to all (if any) rights of the Holders against the
Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement; provided, however, that
the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise
any rights which it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a
result of payment under this Guarantee Agreement, if, at the time
of any such payment, any amounts of Guarantee Payments are due
and unpaid under this Guarantee Agreement. If any amount shall
be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders
and to pay over such amount to the Holders.
SECTION 5.07 INDEPENDENT OBLIGATIONS. The Guarantor
acknowledges that its obligations hereunder are independent of
the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal
and as debtor hereunder to make Guarantee Payments pursuant to
the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through
(g), inclusive, of Section 5.03.
ARTICLE VI
SUBORDINATION
SECTION 6.01 SUBORDINATION. This Guarantee Agreement
will constitute an unsecured obligation of the Guarantor and will
rank subordinate and junior in right of payment to all Senior
Indebtedness of the Guarantor to the same extent as the
Debentures.
ARTICLE VII
TERMINATION
SECTION 7.01 TERMINATION. This Guarantee Agreement
shall terminate and be of no further force and effect upon: (a)
full payment of the Redemption Price of all Preferred Securities,
(b) the distribution of Debentures to Holders in exchange for all
of the Preferred Securities or (c) full payment of the amounts
payable in accordance with the Trust Agreement upon liquidation
of the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must restore payment
of any sums paid with respect to the Preferred Securities or
under this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 SUCCESSORS AND ASSIGNS. All guarantees
and agreements contained in this Guarantee Agreement shall bind
the successors, assigns, receivers, trustees and representatives
of the Guarantor and shall inure to the benefit of the Holders of
the Preferred Securities then outstanding. Except in connection
with a consolidation, merger or sale involving the Guarantor that
is permitted under Article Eleven of the Indenture, the Guarantor
shall not assign its obligations hereunder.
SECTION 8.02 AMENDMENTS. This Guarantee Agreement
may be amended only by an instrument in writing entered into by
the Guarantor and the Guarantee Trustee. Except with respect to
any changes which do not materially adversely affect the rights
of Holders (in which case no consent of Holders will be
required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than 66 2/3% of the
aggregate liquidation amount of all of the outstanding Preferred
Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of Holders shall apply to the giving of such
approval. Nothing herein contained shall be deemed to require
that the Guarantee Trustee enter into any amendment of this
Guarantee Agreement.
SECTION 8.03 NOTICES. Any notice, request or other
communication required or permitted to be given hereunder shall
be in writing, duly signed by the party giving such notice, and
delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set
forth below or such other address as the Guarantor may give
notice of to the Holders of the Preferred Securities:
Delmarva Power & Light Company
800 King Street
Wilmington, DE 19899
Facsimile No: (302) 429-3367
Attention: Treasurer
(b) if given to the Issuer, in care of the
Administrative Trustees, at the Issuer's (and the
Administrative Trustees') address set forth below or such
other address as the Administrative Trustees on behalf of
the Issuer may give notice of to the Holders:
Delmarva Power Financing I
c/o Treasury Department, Delmarva Power &
Light Company
800 King Street
Wilmington, DE 19899
Facsimile No: (302) 429-3367
Attention: Administrative Trustees
(c) if given to the Guarantee Trustee, to the address
set forth below or such other address as the Guarantee
Trustee may give notice of to the Holders of the Preferred
Securities:
Wilmington Trust Company
1100 North Market Street
Wilmington, DE 19890
Facsimile No: (302) 651-8882
Attention: Corporate Trust Administration
(d) if given to any Holder, at the address set forth
on the books and records of the Issuer.
All notices hereunder shall be deemed to have been
given when received in person, telecopied with receipt confirmed,
or mailed by first class mail, postage prepaid except that if a
notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 8.04 BENEFIT. This Guarantee Agreement is
solely for the benefit of the Holders and, subject to Section
3.01(a), is not separately transferable from the Preferred
Securities.
SECTION 8.05 INTERPRETATION. In this Guarantee
Agreement, unless the context otherwise requires:
(a) a term defined anywhere in this Guarantee
Agreement has the same meaning throughout;
(b) all references to "the Guarantee Agreement" or
"this Guarantee Agreement" are to this Guarantee Agreement
as modified, supplemented or amended from time to time;
(c) all references in this Guarantee Agreement to
Articles and Sections are to Articles and Sections of this
Guarantee Agreement unless otherwise specified;
(d) a term defined in the Trust Indenture Act has the
same meaning when used in this Guarantee Agreement unless
otherwise defined in this Guarantee Agreement or unless the
context otherwise requires;
(e) a reference to the singular includes the plural
and vice versa; and
(f) the masculine, feminine or neuter genders used
herein shall include the masculine, feminine and neuter
genders.
SECTION 8.06 GOVERNING LAW. This Guarantee Agreement
shall be governed by and construed and interpreted in accordance
with the laws of the State of New York (without regard to
conflict of laws principles).
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same instrument.
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and
year first above written.
Delmarva Power & Light Company
By:
----------------------------------
Name:
Title:
Wilmington Trust Company,
as Guarantee Trustee
By:
----------------------------------
Name:
Title:
Exhibit 4-F
DELMARVA POWER & LIGHT COMPANY
OFFICER'S CERTIFICATE
________________, the _________ of Delmarva Power & Light
Company (the "Company"), pursuant to the authority granted in the
Board Resolutions of the Company dated _____________, 1996, and
Sections 201 and 301 of the Indenture defined herein, does hereby
certify to Wilmington Trust Company (the "Trustee"), as Trustee
under the Indenture of the Company (For Unsecured Subordinated
Debt Securities relating to Trust Securities) dated as of
______________, 1996 (the "Indenture") that:
1. The securities of the first series to be issued under
the Indenture shall be designated "____% Junior
Subordinated Debentures, Series I, Due" (the
"Debentures of the First Series"). The Debentures of
the First Series are to be issued to Delmarva Power
Financing I, a Delaware statutory business trust (the
"Trust");
2. The Debentures of the First Series shall be limited in
aggregate principal amount to $_____________ at any
time Outstanding, except as contemplated in Section
301(b) of the Indenture;
3. The Debentures of the First Series shall mature and the
principal shall be due and payable together with all
accrued and unpaid interest thereon on ____________,
____;
4. The Debentures of the First Series shall bear interest
from, and including, the date of original issuance, at
the rate of ____% per annum payable quarterly in
arrears (together with Additional Interest, if any) on
March 31, June 30, September 30 and December 31 of each
year (each, an "Interest Payment Date") commencing
___________, 1996. The amount of interest payable for
any such period will be computed on the basis of a 360-
day year of twelve 30-day months and for any period
shorter than a full month, on the basis of the actual
number of days elapsed in such period. Interest on the
Debentures of the First Series will accrue from, and
including, the date of original issuance and will
accrue to, and including, the first Interest Payment
Date, and for each subsequent Interest Payment Date
will accrue from, and excluding, the last Interest
Payment Date through which interest has been paid or
duly provided for to, and including, such Interest
Payment Date. In the event that any Interest Payment
Date 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, except that, if
such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately
preceding Business Day, in each case with the same
force and effect as if made on such Interest Payment
Date;
5. Each installment of interest on a Debenture of the
First Series shall be payable to the Person in whose
name such Debenture of the First Series is registered
at the close of business on the Business Day 15 days
preceding the corresponding Interest Payment Date (the
"Regular Record Date") for the Debentures of the First
Series; provided, however, that if the Debentures of
the First Series are held neither by the Trust nor by a
securities depositary, the Company shall have the right
to change the Regular Record Date by one or more
Officer's Certificates. Any installment of interest on
the Debentures of the First Series not punctually paid
or duly provided for shall forthwith cease to be
payable to the Holders of such Debentures of the First
Series on such Regular Record Date, and may be paid to
the Persons in whose name the Debentures of the First
Series are 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 of such
Defaulted Interest and Special Record Date shall be
given to the Holders of the Debentures of the First
Series not less than 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 of the
First Series may be listed, and upon such notice as may
be required by such exchange, all as more fully
provided in the Indenture;
6. The principal and each installment of interest on the
Debentures of the First Series shall be payable at, and
registration and registration of transfers and
exchanges in respect of the Debentures of the First
Series may be effected at, the office or agency of the
Company in The City of New York; provided, however,
that payment of interest may be made at the option of
the Company by check mailed to the address of the
persons entitled thereto under the Indenture. Notices,
demands to or upon the Company in respect of the
Debentures of the First Series may be served at the
office or agency of the Company in The City of New
York. The Trustee will initially be the agency of the
Company for such service of notices and demands;
provided, however, that the Company reserves the right
to change, by one or more Officer's Certificates any
such office or agency. The Company will be the
Security Registrar and the Paying Agent for the
Debentures of the First Series;
7. The Debentures of the First Series will be redeemable
on or after ________________ at the option of the
Company, at any time and from time to time, in whole or
in part, at a redemption price equal to 100% of the
principal amount of the Debentures of the First Series
being redeemed, together with any accrued interest,
including Additional Interest, if any, to the
redemption date, upon not less than 30 nor more than 60
days' notice given as provided in the Indenture.
The Debentures of the First Series will also be
redeemable at any time at the option of the Company
upon the occurrence and during the continuation of a
Tax Event or an Investment Company Event in whole but
not in part, at a redemption price equal to 100% of the
principal amount of the Debentures of the First Series
then Outstanding plus any accrued and unpaid interest,
including Additional Interest, if any, to the
redemption date, upon not less than 30 nor more than 60
days' notice given as provided in the Indenture. "Tax
Event" means the receipt by the Trust of an opinion of
counsel (which may be counsel to the Company or an
affiliate but not an employee thereof and which must be
acceptable to the Property Trustee under the Trust
Agreement) 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 affecting taxation, or as a result
of any official administrative or judicial
pronouncement or decision interpreting or applying such
laws or regulations, which amendment or change is
effective or which pronouncement or decision is
announced on or after the date of original issuance of
the ____% Trust Preferred Capital Securities of the
Trust (the "Preferred Securities"), there is more than
an insubstantial risk that at such time or within 90
days thereof (i) the Trust is, or will be, subject to
United States federal income tax with respect to income
received or accrued on the Debentures of the First
Series, (ii) interest payable by the Company on the
Debentures of the First Series, is not, or will not be
fully deductible for United States federal income tax
purposes, or (iii) the Trust is, or will be, subject to
more than a de minimis amount of other taxes, duties or
other governmental charges. "Investment Company Event"
means the occurrence of a change in law or regulation
or a change in interpretation or application of law or
regulation by any legislative body, court, governmental
agency or regulatory authority to the effect that the
Trust is or will be considered an "investment company"
that is required to be registered under the Investment
Company Act of 1940, as amended, which change in law
becomes effective on or after the date of original
issuance of the Preferred Securities;
The Debentures of the First Series will also be
redeemable, in whole but not in part, at the option of
the Company upon the termination and liquidation of the
Trust pursuant to an order for the dissolution,
termination or liquidation of the Trust entered by a
court of competent jurisdiction at a redemption price
equal to 100% of the principal amount of the Debentures
of the First Series then Outstanding plus any accrued
and unpaid interest, including Additional Interest, if
any, to the redemption date;
The Company may not redeem less than all the Debentures
of the First Series Outstanding unless all accrued and
unpaid interest (including any Additional Interest) has
been paid in full or duly provided for on all
Debentures of the First Series Outstanding under the
Indenture for all quarterly interest periods
terminating on or prior to the date of redemption;
Any notice of redemption given with respect to the
Debentures of the First Series shall be unconditional;
8. Pursuant to Section 311 of the Indenture, the Company
shall have the right, at any time and from time to time
during the term of the Debentures of the First Series,
to extend the interest payment period to a period not
exceeding 20 consecutive quarters (an "Extension
Period"). Prior to the end of an Extension Period, the
Company may, and at the end of the Extension Period the
Company shall, pay all interest accrued and unpaid
(together with interest thereon at the rate specified
for the Debentures of the First Series, compounded
quarterly, to the extent permitted by applicable law).
During any such Extension Period, the Company shall not
declare or pay any dividend or distribution (other than
a dividend or distribution in common stock of the
Company) on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital
stock, or make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any
indebtedness that is pari passu with the Debentures of
the First Series (including other Securities issued
under the Indenture), or make any guarantee payments
with respect to the foregoing. Prior to the
termination of any such Extension Period, the Company
may further extend the interest payment period,
provided that such Extension Period together with all
such previous and further extensions thereof shall not
exceed 20 consecutive quarters at any one time or
extend beyond the Stated Maturity of the Debentures of
the First Series. Upon the termination of any such
Extension Period and the payment of all amounts then
due, the Company may select 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. The Company will give the Trust or
other Holders and the Trustee notice of its election of
an Extension Period prior to the earlier of (i) one
Business Day prior to the record date for the interest
payment which would occur but for such election or (ii)
the date the Company is required to give notice to the
New York Stock Exchange or other applicable
self-regulatory organization of the record date;
9. In the event that, at any time subsequent to the
initial authentication and delivery of the Debentures
of the First Series, the Debentures of the First Series
are to be held by a securities depositary, the Company
may at such time establish the matters contemplated in
clause (r) in the second paragraph of Section 301 of
the Indenture in an Officer's Certificate supplemental
to this Certificate;
10. No service charge shall be made for the registration of
transfer or exchange of the Debentures of the First
Series; provided, however, that the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection
with the exchange or transfer;
11. The Debentures of the First Series shall have such
other terms and provisions as are provided in the form
set forth in Exhibit A hereto, and shall be issued in
substantially such form;
12. In the event that the Debentures of the First Series
are distributed to holders of the Preferred Securities
as a result of the occurrence of (i) a Tax Event or
(ii) an Investment Company Event, the Company will use
its best efforts to list the Debentures of the First
Series on the New York Stock Exchange or on such other
exchange as the Preferred Securities are then listed;
13. The undersigned has read all of the covenants and
conditions contained in the Indenture relating to the
issuance of the Debentures of the First Series and the
definitions in the Indenture relating thereto and in
respect of which this certificate is made;
14. The statements contained in this certificate are based
upon the familiarity of the undersigned with the
Indenture, the documents accompanying this certificate,
and upon discussions by the undersigned with officers
and employees of the Company familiar with the matters
set forth herein;
15. In the opinion of the undersigned, he or she has made
such examination or investigation as is necessary to
express an informed opinion whether or not such
covenants and conditions have been complied with; and
16. In the opinion of the undersigned, such conditions and
covenants and conditions precedent, if any (including
any covenants compliance with which constitutes a
condition precedent) to the authentication and delivery
of the Debentures of the First Series requested in the
accompanying Company Order have been complied with.
All capitalized terms used in this certificate which are not
defined herein but are defined in the Indenture shall have the
meanings set forth in the Indenture.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this
Officer's Certificate this _____ day of ___________________,
1996.
---------------------------
<PAGE>
No. R-1
EXHIBIT A
DELMARVA POWER & LIGHT COMPANY
____% JUNIOR SUBORDINATED DEBENTURES, SERIES I,
DUE _____
DELMARVA POWER & LIGHT COMPANY, a corporation duly organized
and existing under the laws of the States of Delaware and
Virginia (herein referred to as the "Company," which term
includes any successor Person under the Indenture), for value
received, hereby promises to pay to _________________________
_________________________ , or registered assigns, the principal
sum of __________________________ Dollars on
_____________________, and to pay interest on said principal sum,
from and including, ____________________ or from, and excluding,
the most recent Interest Payment Date through which interest has
been paid or duly provided for, quarterly on March 31, June 30,
September 30 and December 31 of each year, commencing __________,
1996 at the rate of ____% per annum until the principal hereof is
paid or made available for payment. The amount of interest
payable on any Interest Payment Date shall be computed on the
basis of a 360-day year of twelve 30-day months. Interest on the
Securities of this series will accrue from, and including,
_________________ through the first Interest Payment Date, and
thereafter will accrue, from, and excluding, the last Interest
Payment Date through which interest has been paid or duly
provided for. In the event that any Interest Payment Date 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,
except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and
effect as if made on the Interest Payment Date. The interest so
payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be
paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the
Business Day 15 days preceding such Interest Payment Date. Any
such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in the Indenture referred to on the reverse hereof.
Payment of the principal of and premium, if any, and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that, at
the option of the Company, interest on this Security may be paid
by check mailed to the address of the person entitled thereto, as
such address shall appear on the Security Register.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
DELMARVA POWER & LIGHT COMPANY
By:_________________________________
ATTEST:
--------------------------
CERTIFICATE OF AUTHENTICATION
Dated: ___________________
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
WILMINGTON TRUST COMPANY, as
Trustee
By: ___________________________
Authorized Signatory
<PAGE>
REVERSE OF JUNIOR SUBORDINATED DEBENTURE
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture,
dated as of ______________, 1996 (herein, together with any
amendments thereto, called the "Indenture," which term shall have
the meaning assigned to it in such instrument), between the
Company and Wilmington Trust Company, as Trustee (herein called
the "Trustee," which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture,
including the Board Resolutions and Officer's Certificate filed
with the Trustee on ________________, 1996, creating the series
designated on the face hereof, for a statement of the respective
rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and
of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series
designated on the face hereof, limited in aggregate principal
amount to $________________.
The Securities of this series are subject to redemption
upon not less than 30 nor more than 60 days' notice by mail, at
any time on or after _________________ as a whole or in part, at
the election of the Company, at a Redemption Price equal to 100%
of the principal amount, together in the case of any such
redemption with accrued interest to, but not including, the
Redemption Date, but interest installments whose Stated Maturity
is on or prior to such Redemption Date will be payable to the
Holder of such Security, or one or more Predecessor Securities,
of record at the close of business on the related Regular Record
Date referred to on the face hereof, all as provided in the
Indenture.
The Securities of this series also will be redeemable
at the option of the Company if a Tax Event or an Investment
Company Event shall occur and be continuing, in whole but not in
part, at a redemption price equal to 100% of the principal amount
of the Securities of this series then Outstanding plus any
accrued and unpaid interest, including Additional Interest, if
any, to the redemption date, upon not less than 30 nor more than
60 days' notice given as provided in the Indenture. "Tax Event"
means the receipt by Delmarva Power Financing I, a Delaware
statutory business trust (the "Trust") of an opinion of counsel
(which may be counsel to the Company or an affiliate but not an
employee thereof and which must be acceptable to the Property
Trustee under the Trust Agreement) 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 affecting
taxation, or as a result of any official administrative or
judicial pronouncement or decision interpreting or applying such
laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date
of original issuance of the ____% Trust Preferred Capital
Securities of the Trust (the "Preferred Securities"), there is
more than an insubstantial risk that at such time or within 90
days thereof (i) the Trust is, or will be, subject to United
States federal income tax with respect to income received or
accrued on the Securities, (ii) interest payable by the Company
on the Securities, is not, or will not be, fully deductible for
United States federal income tax purposes, or (iii) the Trust is,
or will be, subject to more than a de minimis amount of other
taxes, duties or other governmental charges. "Investment Company
Event" means the occurrence of a change in law or regulation or a
change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory
authority to the effect that the Trust is or will be considered
an "investment company" that is required to be registered under
the Investment Company Act of 1940, as amended, which change in
law becomes effective on or after the date of original issuance
of the Preferred Securities.
The Securities of this series also will be redeemable,
in whole but not in part, at the option of the Company upon the
termination and liquidation of the Trust pursuant to an order for
the dissolution, termination or liquidation of the Trust entered
by a court of competent jurisdiction at a redemption price equal
to 100% of the principal amount of the Securities of this series
then Outstanding plus any accrued and unpaid interest, including
Additional Interest, if any, to the redemption date, upon not
less than 30 nor more than 60 days' notice given as provided in
the Indenture.
In the event of redemption of this Security in part
only, a new Security or Securities of this series and of like
tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
The indebtedness evidenced by this Security is, to the
extent provided in the Indenture, subordinated and subject in
right of payment to the prior payment in full of all Senior
Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of
this Security, 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.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of not less
than a majority in aggregate principal amount of the Securities
of all series at the time Outstanding in respect of which an
Event of Default shall have occurred and be continuing shall have
made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The Company has the right at any time and from time to
time during the term of the Securities of this series to extend
the interest payment period to a period not exceeding 20
consecutive quarters (an "Extension Period"). Prior to the end
of an Extension Period, the Company may, and at the end of such
Extension Period, the Company shall, pay all interest then
accrued and unpaid (together with interest thereon at the same
rate as specified for the Securities of this series, compounded
quarterly, to the extent permitted by applicable law). During
any such Extension Period the Company shall not declare or pay
any dividend or distribution (other than a dividend or
distribution in common stock of the Company) on, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of its capital stock, or make any payment of principal on,
interest or premium if any, on or repay, repurchase or redeem any
indebtedness that is pari passu with the Securities of this
series (including other Securities issued under the Indenture),
or make any guarantee payments with respect to the foregoing.
Prior to the termination of any such Extension Period, the
Company may further extend the interest payment period, provided
that such Extension Period, together with all such previous and
further extensions thereof, may not exceed 20 consecutive
quarters or extend beyond the Stated Maturity of the Securities
of this series. Upon the termination of any such Extension
Period and the payment of all amounts then due, the Company may
select a new Extension Period, subject to the above requirements.
No interest during the Extension Period, except at the end
thereof, shall be due and payable. The Company shall give the
Holder of this Security notice of its selection of such Extension
Period as provided in or pursuant to the Indenture.
The Securities of this series are issuable only in
registered form without coupons in denominations of $25 and any
integral multiple thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor and of
authorized denominations, as requested by the Holder surrendering
the same.
As provided in the Indenture, the Company shall not be
required to make transfers or exchanges of Securities of this
series for a period of 15 days immediately preceding the date of
the mailing of any notice of redemption of such Securities and
the Company shall not be required to make transfers or exchanges
of any Securities of this series so selected for redemption in
whole or in part (except the unredeemed portion of thereof).
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
