<PAGE>
Registration Nos. 333- 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
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 is respectfully 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
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act of 1933 registration statement number
of the earlier effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act of 1933 registration statement number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================================================================
<S> <C> <C> <C> <C>
Title Amount Proposed Maximum Proposed Maximum
of Each Class of to Be Offering Price Aggregate Offering Amount of
Securities to Be Registered Registered Per Unit/1/ Price/1//2/ Registration Fee
- ------------------------------------------------------------------------------------------------------------------
Delmarva Power Financing I Trust
Preferred Capital Securities ......... 2,800,000 $25.00 $70,000,000 $24,138
- ------------------------------------------------------------------------------------------------------------------
Delmarva Power & Light Company
Guarantee with respect to Delmarva
Power Financing I Trust Preferred
Capital Securities and Delmarva Power
& Light Company obligations with
respect to such Preferred Securities
under an Indenture, an Amended and
Restated Trust Agreement and an
Agreement as to Expenses and
Liabilities/3/........................
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Delmarva Power & Light Company
Junior Subordinated Debentures,
Series I/4/...........................
==================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration
fee.
(2) Exclusive of accrued distributions, if any.
(3) No separate consideration will be received for the Delmarva Power &
Light Company Guarantee and such other obligations.
(4) The Junior Subordinated Debentures will be purchased by Delmarva
Power Financing I with the proceeds of the sale of the Preferred
Securities. No separate consideration will be received for the
Junior Subordinated Debentures.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+Information contained herein is subject to completion or amendment. A +
+Registration Statement relating to these securities has been filed with the +
+Securities and Exchange Commission. These securities may not be sold nor may +
+offers to buy be accepted prior to the time the Registration Statement becomes+
+effective. This prospectus shall not constitute an offer to sell or the +
+solicitation of an offer to buy nor shall there be any sale of these +
+securities in any jurisdiction in which such offer, solicitation or sale would+
+be unlawful prior to registration or qualification under the securities laws +
+of any such jurisdiction. +
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
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
of Delmarva Financing. Delmarva Financing exists for the sole purpose of
issuing the Preferred Securities and the Common Securities and investing the
proceeds thereof in ____% Junior Subordinated Debentures, Series I, Due _____,
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 7, 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 FEDERAL INCOME TAX CONSEQUENCES.
-------------
Application will be 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.
-------------
<TABLE>
<CAPTION>
Underwriting Proceeds to
Price to Discounts and Delmarva
Public(1) Commissions(2) Financing(3)(4)
-------------- ---------------- ----------------
<S> <C> <C> <C>
Per Preferred Security.. $25.00 (3) $25.00
Total................... $70,000,000 (3) $70,000,000
- ---------
</TABLE>
(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. 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
____________, 1996
<PAGE>
(cover continued)
Holders (as defined in the Trust Agreement) 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 ________, 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, however, that any such Extension Period may not
extend beyond the maturity of the Subordinated Debentures. 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.
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, interest on the Subordinated Debentures will continue to
accrue. 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
Subordinated Debentures -- Option to Extend Interest Payment Period" 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 subordinate and junior in right of
payment to Senior Indebtedness (as defined herein) 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, the Trust Agreement (each as defined
herein) and the Expense Agreement, constitute a full and unconditional guarantee
of the Preferred Securities by the Company.
The Preferred Securities are subject to mandatory redemption upon repayment of
the Subordinated Debentures at maturity or upon their earlier redemption. See
"Description of the Preferred Securities -- Redemption Procedures." The Company
will have the option at any time on or after _______________, 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 herein), (i) to redeem the Subordinated Debentures, in whole but not in
part, which will result in the redemption of all 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 Preferred Securities and the Common Securities. 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 New York Stock Exchange or on such other exchange as
the Preferred Securities then are listed. See "Description of the Preferred
Securities -- Special Event Redemption or Distribution" and "Description of the
Subordinated Debentures." 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").
Each class of the Trust Securities will be redeemed in proportion to the
percentage they represent of all the Trust Securities. See "Description of the
Subordinated Debentures -- Optional Redemption."
The Subordinated Debentures are 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 March 31, 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" and "Description of the Preferred
Securities."
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 Preferred Security or (ii) a
liquidation amount of $25 per Preferred 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."
<PAGE>
(cover continued)
The Preferred Securities will be represented by global certificates 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 certificates. 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
<TABLE>
<CAPTION>
Page
----
<S> <C>
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................................................................ 7
THE COMPANY................................................................. 11
DELMARVA FINANCING.......................................................... 11
USE OF PROCEEDS............................................................. 12
DESCRIPTION OF THE PREFERRED SECURITIES..................................... 12
DESCRIPTION OF THE GUARANTEE................................................ 21
DESCRIPTION OF THE SUBORDINATED DEBENTURES.................................. 23
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES....................... 31
VALIDITY OF THE SECURITIES.................................................. 34
EXPERTS..................................................................... 34
UNDERWRITING................................................................ 35
</TABLE>
<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 New York and Philadelphia Stock Exchanges, 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. 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.
See "Description of the Subordinated Debentures -- Additional Interest" and
"Description of the Guarantee -- Events of Default."
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 quarter ended
March 31, 1996;
3. The Company's Current Reports on Form 8-K dated February 22, 1996 and
May 26, 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.
-2-
<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 are undivided preferred beneficial interests in the
assets of Delmarva Financing and will have a preference, under certain
circumstances, with respect to cash Distributions and amounts payable on
liquidation, redemption or otherwise over the trust interests represented by the
Common Securities issued by Delmarva Financing. The sole assets of Delmarva
Financing will be the Subordinated Debentures.
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 _____________, 1996, at the per annum rate of ____% of the
liquidation amount thereof 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. The
Subordinated Debentures are unsecured subordinated debt securities issued under
an Indenture, dated as of ______________, 1996, between the Company and
Wilmington Trust Company, as Trustee (the "Indenture"). Delmarva Financing will
use interest payments on the Subordinated Debentures to make Distributions on
the Preferred Securities. The Subordinated Debentures will be subordinate to
all Senior Indebtedness of the Company but will be senior to all capital stock
of the Company.
Opinion 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, interest on the Subordinated Debentures will
continue to accrue. 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. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Company may elect another Extension Period. 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
Distribution that would occur but for such election or (ii) the date the Company
is required to give notice to the New York Stock Exchange ("NYSE") or other
applicable self-regulatory organization of such record date and will cause
Delmarva Financing to send notice of such election to the Holders of Preferred
Securities.
Redemption
The Subordinated Debentures are redeemable, in whole or in part, on or after
________________, or at any time, in whole but not in part, upon the occurrence
of a Special Event and in certain other circumstances, at the option of the
Company. Upon redemption of the Subordinated Debentures, the Preferred
Securities and the Common Securities will be redeemed on a pro rata basis to the
same extent as the Subordinated Debentures are redeemed. See "Description of
the Subordinated Debentures -- Optional Redemption" and "Description of the
Preferred Securities -- Redemption Procedures."
No sinking fund will be established for the benefit of the Preferred
Securities.
Special Event Redemption or Termination
Upon the occurrence and during the continuation of a Special Event, the
Company may elect (i) to redeem the Subordinated Debentures at any time, in
whole but not in part, in which event all of the Trust Securities will be
redeemed or (ii) to cause the termination of Delmarva Financing, subject, in the
case of a Tax Event, to receipt of a No Recognition Opinion. In the event of a
termination, after the satisfaction of all amounts due to creditors of Delmarva
Financing, if any, the Subordinated Debentures will be distributed to the
Holders of the Preferred Securities and the Common 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
-3-
<PAGE>
on The New York Stock Exchange 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 on the Preferred Securities and payments on the
liquidation of Delmarva Financing and the redemption of Preferred Securities are
guaranteed by the Company if and to the extent that Delmarva Financing has funds
available therefor. See "Description of the Preferred Securities -- Guarantee."
Listing
Application will be 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 its Adjustable Rate Preferred Stock--
$100 Par Value, Series A, to redeem or otherwise retire other outstanding
securities of the Company to the extent that it shall be economic to do so, 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.
-4-
<PAGE>
CERTAIN CONSOLIDATED FINANCIAL INFORMATION OF DELMARVA POWER & LIGHT COMPANY
(Thousands, except per share amounts, ratios and percentages)
<TABLE>
<CAPTION>
Twelve
Months
Ended
March 31, Year Ended December 31, (1)
------------- -----------------------------------------------------------------
1996 1995 1994 1993 1992 1991
------------- ------------- ------------ ------------ ----------- -------------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Income Summary:
Operating Revenues........................ $1,030,133 $995,103 $991,021 $970,607 $864,044 $855,821
Net Income................................ 117,224 117,488 108,310(2) 111,076 98,526(3) 93,236
Earnings Applicable to Common
Stock................................... 107,360 107,546 98,940(2) 101,074 90,177(3) 85,259
Earnings per share of Common
Stock................................... $1.78 $1.79 $1.67(2) $1.76 $1.69(3) $1.69(4)
Ratio of Earnings to Fixed
Charges (5)............................. 3.46 3.54 3.49 3.47 3.03 2.58
Ratio of Earnings to Fixed
Charges and Preferred Dividends
(5)...................................... 2.88 2.92 2.85 2.88 2.51 2.24
</TABLE>
<TABLE>
<CAPTION>
March 31, 1996
-------------------------------------------------
Unaudited
Actual As Adjusted (6)
------------------------ ------------------------
Outstanding Ratio Outstanding Ratio
-------------- --------- --------------- --------
<S> <C> <C> <C> <C>
Capitalization Summary:
Common Stockholders' Equity................................................. $931,844 45.7% $931,844 45.7%
Preferred Stock -
Not Subject to Mandatory Redemption...................................... 168,085 8.2% 98,085 4.8%
Company Obligated Mandatorily Redeemable Preferred Securities
of Subsidiary Trust (7)................................................. -- 0.0% 70,000 3.4%
Long-Term Debt (8).......................................................... 940,085 46.1% 940,085 46.1%
-------------- --------- --------------- --------
Total Capitalization........................................................... $2,040,014 100.0% $2,040,014 100.0%
============== ========= =============== ========
- -----------------------------------------------------------------
</TABLE>
(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.
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<PAGE>
(7) As described in this Prospectus, all of the assets of Delmarva Financing
will be approximately $72 million of ___% Subordinated Debentures of the
Company.
(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.
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<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 issued by the Company for the
benefit of the Holders of the Preferred Securities 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. The obligations of the Company under the Subordinated Debentures are
subordinate and junior in right of payment to Senior Indebtedness of the
Company. As of March 31, 1996, Senior Indebtedness of the Company aggregated
approximately $1.0 billion. There are no terms of the Preferred Securities, the
Subordinated Debentures or the Guarantee that limit the Company's ability to
incur additional indebtedness, including indebtedness that would rank senior to
the Subordinated Debentures and the Guarantee. See "Description of the
Guarantee -- Status of the Guarantee" and "Description of the Subordinated
Debentures -- Subordination."
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, however, that no Extension Period may extend beyond the maturity of
the Subordinated Debentures. 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, as defined herein)
or make any guarantee payment with respect to such indebtedness. During an
Extension Period, interest on the Subordinated Debentures will continue to
accrue. 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). 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
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<PAGE>
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; Potential Adverse Effect on Market
Price
Upon the occurrence and continuation of a Special Event, the Company has
the right to (i) redeem the Subordinated 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 Delmarva Financing and, in connection
therewith, after satisfaction of all amounts due to creditors of Delmarva
Financing, if any, cause Subordinated Debentures in a Like Amount to be
distributed to the Holders of Trust Securities within 90 days following the
occurrence of such Special Event. There can be no assurance as to the market
prices for the Subordinated Debentures which may be distributed in exchange for
Preferred Securities if a termination and liquidation of Delmarva Financing were
to occur. Accordingly, such Subordinated Debentures could, if distributed,
trade at a discount to the price of the Preferred Securities exchanged. See
"Description of the Preferred Securities -- Special Event Redemption or
Distribution" and "Certain United States Federal Income Tax Consequences."
Possible Tax Law Changes
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 would, among other things, generally 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." Accordingly, there can
be no assurance that a Special Event will not occur.
There can be no assurance as to the market prices for Preferred Securities
or Subordinated Debentures that may be distributed in exchange for Preferred
Securities if a dissolution or liquidation of Delmarva Financing were to occur.
Accordingly, the Preferred Securities that an investor may purchase, whether
pursuant to the offer made hereby or in the secondary market, or 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 -- General."
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<PAGE>
Rights Under the Guarantee; Limitation as to Funds Available to Delmarva
Financing
The Guarantee will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Wilmington Trust Company
will act as indenture trustee under the Guarantee for the purposes 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.
Wilmington Trust Company also will act as trustee for the Subordinated
Debentures (the "Debenture Trustee") and as Property Trustee under the Trust
Agreement.
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 funds available therefor, (ii)
the Redemption Price with respect to Preferred Securities called for redemption
by Delmarva Financing, to the extent Delmarva Financing has 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. The Holders of not
less than a majority in aggregate 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 or to direct the exercise of
any trust 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. 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. 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.
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 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.
See "Description of the Guarantee -- Status of the Guarantee" and "Description
of the Subordinated Debentures -- Subordination" herein. The Trust Agreement
pursuant to which Delmarva Financing has been formed provides that each Holder
of Preferred Securities by acceptance thereof agrees to the provisions of the
Guarantee and the Indenture.
The Preferred Securities are subject to mandatory redemption upon repayment
of the Subordinated Debentures at maturity or upon their earlier redemption.
See "Description of the Preferred Securities -- Redemption Procedures." The
Company will have the option at any time on or after _______________ upon not
less than 30 days' notice, to redeem the Subordinated Debentures, in whole or in
part.
Limited Voting Rights
Holders of Preferred Securities generally will have limited voting rights
relating only to the modification of the Preferred Securities and the
dissolution, winding-up or termination of Delmarva Financing. 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 herein) 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" and "-- Co-Trustees and Separate Property Trustees."
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<PAGE>
Trading Characteristics of Preferred Securities
The Preferred Securities constitute a new issue of securities with no
established trading market. Accordingly, no assurance can be given as to the
liquidity of, or the development and maintenance of trading markets for, the
Preferred Securities. 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."
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<PAGE>
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 436,000 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 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"), of
such trust (the "Original Trust Agreement") and (ii) the filing of a 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.
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 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 that upon the occurrence and continuance of a default under
the Indenture, the rights of the Holders of the Common Securities to payment in
respect of Distributions and payments upon liquidation, redemption and otherwise
will be subordinated to the rights of the Holders of the Preferred Securities.
The Company will acquire Common Securities having an aggregate liquidation
amount equal to 3% of the total capital of Delmarva Financing. 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.
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<PAGE>
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 its Adjustable Rate Preferred Stock--
$100 Par Value, Series A, to redeem or otherwise retire other outstanding
securities of the Company to the extent that it shall be economic to do so, 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
Delmarva Financing was authorized and created by the Original Trust Agreement.
The Preferred Securities and the Common Securities will be created pursuant to
the terms of the Trust Agreement. The Preferred Securities will represent
undivided beneficial interests in the assets of Delmarva Financing and entitle
the Holders thereof to a preference over the Common Securities in certain
circumstances with respect to Distributions and amounts payable on redemption or
liquidation, as well as other benefits as described in the Trust Agreement. The
following summaries of certain provisions of 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
All of the Common Securities 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 based on the liquidation amount of the Trust
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 a rate
per annum of ____% of the stated liquidation amount thereof. 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 of ____% (to the
extent permitted by applicable law, compounded quarterly).
Distributions on the Preferred Securities will be cumulative, will accrue from
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
______________, except as otherwise described below. Such Distributions will
originally accrue from, and include, the date of initial issuance and will
accrue to, and include, the first distribution payment date (as defined below),
and thereafter will accrue from, and exclude, the last distribution payment date
through which Distributions have been paid. 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 (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, 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
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<PAGE>
remain closed and (iii) a day on which the Corporate Trust Office of the
Property Trustee or the Debenture Trustee is closed for business.
The Company has the right under the Indenture pursuant to which it will issue
the Subordinated Debentures to extend the interest payment period at any time or
from time to time on the Subordinated Debentures to a period not exceeding 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 above,
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 the foregoing. 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 may not exceed 20
consecutive quarters and that such Extension Period may not 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 Extension Period and the payment of all amounts then due,
the Company may select a new Extension Period, subject to the foregoing
requirements. See "Description of the Subordinated Debentures -- Interest" and
"-- Option to Extend Interest Payment Period."
It is anticipated that the income of Delmarva Financing available for
Distributions to the Holders of the Preferred Securities will be limited to
payments received on the Subordinated Debentures. See "Description of the
Subordinated Debentures." If the Company does not make interest payments on the
Subordinated Debentures, the Property Trustee will not have funds available to
pay Distributions on the Preferred Securities and the Common Securities. The
payment of Distributions (if and to the extent Delmarva Financing has sufficient
funds available for the payment of such Distributions) is guaranteed by the
Company as set forth herein under "Descriptions of the Guarantee."
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, which as long as the Preferred Securities remain 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."
The Subordinated Debentures will mature on _______________, and are redeemable
at the option of the Company (i) in whole or in part, on or after
_______________, or (ii) at any time, in whole but not in part, upon the
occurrence of a Tax Event or an Investment Company Event (each, as defined
below, a "Special Event"), subject to the conditions described under
"Description of the Subordinated Debentures -- Optional Redemption."
Special Event Redemption or Distribution
If a Special Event shall occur and be continuing with respect to the Preferred
Securities, the Company has the right to (i) redeem the Subordinated 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
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<PAGE>
Special Event, or (ii) cause the termination of Delmarva Financing and in
connection therewith, after satisfaction of all amounts due to Delmarva
Financing creditors, if any, cause Subordinated Debentures in a Like Amount to
be distributed to the Holders of the Trust Securities within 90 days following
the occurrence of such Special Event; provided, however, 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 below) will be payable on the Subordinated
Debentures.
"Like Amount" means (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.
"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, deductible by
the Company, in whole or in part, 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.
"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.
On March 19, 1996, the Revenue Bill was released. The Revenue Bill would,
among other things, generally 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, which in turn
could give rise to a Tax Event. Accordingly, there can be no assurance that a
Special Event will not occur.
On the date fixed for the distribution of Subordinated Debentures upon
termination of Delmarva Financing (i) the Preferred Securities and the Common
Securities no longer will be deemed to be outstanding and (ii) all rights
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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).
There can be no assurance as to the market price for the Subordinated
Debentures which may be distributed in exchange for Preferred Securities upon
the termination of Delmarva Financing. Accordingly, such Subordinated
Debentures might trade at a discount to the price of the Preferred Securities
exchanged. 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
The Company may not redeem fewer than all the Subordinated Debentures (with
the result that Delmarva Financing may not redeem fewer than all the outstanding
Preferred Securities) unless all accrued and unpaid interest has been paid on
all Subordinated Debentures for all quarterly interest periods terminating on or
prior to the date of redemption or if a partial redemption of the Preferred
Securities would result in the delisting of the Preferred Securities by any
national securities exchange on which the Preferred Securities then are listed.
Preferred Securities redeemed on each Redemption Date 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, Delmarva Financing
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)).
Subject to applicable law (including, without limitation, United States
federal securities law), the Company may at any time and from time to time
purchase outstanding Preferred Securities by tender, in the open market or by
private agreement.
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 security 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(f)).
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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, however, that if on any Distribution payment date or
Redemption Date an Event of Default under the Indenture (as described below, see
"Events of Default; Notice") under the Trust Agreement 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 under the Trust Agreement resulting from an
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 under the
Trust Agreement 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 under such Trust Agreement 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 an Event of Default has occurred and is
continuing under the Indenture, the Preferred Securities shall have a preference
over the Common Securities. (Sections 9.04(a), (d) 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 an Event of Default under the Indenture (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
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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.
Within five Business Days after the occurrence of any Event of Default, the
Property Trustee shall transmit to the Holders of Trust Securities 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)).
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.
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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.
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
"Description of the Preferred Securities -- 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
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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, however, that where a
consent under the Indenture would require the consent of each Holder of
Subordinated Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior 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. 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. (Section 6.01(b)). 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.
No vote or consent of the Holders of Preferred Securities will be required for
Delmarva Financing to redeem and cancel Preferred Securities in accordance with
the Trust Agreement.
Notwithstanding that Holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Company, the Property Trustee or any affiliate
of the Company or the Property Trustee, shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
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, however, 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 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 or (ii) restrict the right of a Holder of
Trust Securities to institute suit for the enforcement of any such payment on or
after such date or (iii) change the requirement that each affected Holder
consent to amendments in respect of clauses (i) or (ii) above. (Section
10.03(c)).
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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).
Form, Exchange, and Transfer
Preferred Securities will be issuable only in fully registered form, each
having a liquidation amount of $25 and any integral multiple thereof.
At the option of the Holder, subject to the terms of the Trust Agreement,
Preferred Securities will be exchangeable for other Preferred Securities, of any
authorized denomination and of like tenor and aggregate liquidation amount.
Subject to the terms of the Trust Agreement, 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. The Administrative Trustees
may designate the Company as Transfer Agent and as Registrar. Initially,
Wilmington Trust Company will act as Registrar and Transfer Agent for the
Preferred Securities.
No service charge will be made for any registration of transfer or exchange of
Preferred Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
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 5.04).
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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 under the Guarantee and the
Debenture Trustee under the Indenture.
Miscellaneous
Application will be 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. See "Events of Default; Notice." The Administrative Trustees will
administer the day-to-day operations of Delmarva Financing. See "Voting
Rights."
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
Set forth below is a summary of information concerning the Guarantee that will
be executed and delivered by the Company for the benefit of the Holders from
time to time of Preferred Securities. The Guarantee will be qualified as an
indenture under the Trust Indenture Act. Wilmington Trust Company will act as
Guarantee Trustee under the Guarantee for the purposes of compliance with the
Trust Indenture Act. The terms of the Guarantee will be those set forth in such
Guarantee and those made part of such Guarantee by the Trust Indenture Act. The
summary 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,
which is filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, and the Trust Indenture Act. The Guarantee Trustee
will hold the Guarantee for the benefit of the Holders of the Preferred
Securities.
General
The Company will agree fully and unconditionally to the extent set forth
herein, to pay the Guarantee Payments (as defined herein) 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, 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, 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
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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 all liabilities 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
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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 (i) subordinate and junior in right of payment to all liabilities of the
Company (except liabilities that may be made pari passu by their terms), (ii)
pari passu with the most senior preferred or preference stock now or hereafter
issued by the Company and with any guarantee now or hereafter entered into by
the Company in respect of any preferred or preference stock of any affiliate of
the Company and (iii) senior to the Company's Common Stock. The Trust Agreement
provides that each Holder of Preferred Securities by acceptance thereof agrees
to the subordination provisions and other terms of the Guarantee. (Section
6.01).
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
Set forth below is a description of the specific terms of the Subordinated
Debentures which Delmarva Financing will hold as trust assets. The following
description does not purport to be complete and is qualified in its entirety by
reference to the Indenture between the Company and the Debenture Trustee with
respect to the Subordinated Debentures, which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. Whenever
particular provisions or defined terms in the Indenture are referred to herein,
such provisions or defined terms are incorporated by reference herein. Section
references used herein are references to provisions of the Indenture unless
otherwise noted.
The Indenture provides for the issuance of 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.
General
The Subordinated Debentures will be limited in aggregate principal amount to
the sum of the aggregate liquidation amount of the Preferred Securities and the
consideration paid by the Company for the Common Securities and will have terms
similar to the terms of the Preferred 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 (as defined herein), if any, on
___________________. 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.
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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 ________________, the Company will have the right, 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
right 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 Preferred Securities and Common 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 of ____% per
annum. Such interest is payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year (each, an "Interest Payment Date"),
commencing ______________, 1996, to the person in whose name each Subordinated
Debenture is registered, by the close of business on the Business Day 15 days
preceding such Interest Payment Date. It is anticipated that Delmarva Financing
will be the sole Holder of the Subordinated Debentures.
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 (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on 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
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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
herein), 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. 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).
It is possible that for United States federal income tax purposes any deposit
contemplated in the preceding paragraph could be treated as a taxable exchange
of the Subordinated Debentures outstanding for an issue of obligations of
Delmarva Financing or a direct interest in the cash and securities held by
Delmarva Financing. In that case, Holders of the Subordinated Debentures
outstanding would recognize a gain or loss for federal income tax purposes, as
if their share of Delmarva Financing obligations or the cash or securities
deposited, as the case may be, had actually been received by them in exchange
for their Subordinated Debentures. In addition, such Holders thereafter would
be required to include in income a share of the income, gain or loss of Delmarva
Financing. The amount so required to be included in income could be different
from the amount that would be includable in the absence of such deposit.
Prospective investors are urged to consult their own tax advisors as to the
specific consequences to them of any such deposit.
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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, however, that the Company's
obligations under the Guarantee shall not be deemed to be Senior Indebtedness.
(Section 101).
The Indenture does not limit the aggregate amount of Senior Indebtedness that
may be issued. As of March 31, 1996, the Company had approximately $1.0 billion
principal amount of indebtedness for borrowed money constituting Senior
Indebtedness.
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 an Officer's Certificate
and an Opinion of Counsel as provided in 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
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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 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
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(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, however, 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 (a "Direct Action") after the respective due dates specified in the
Subordinated Debentures. In connection with such Direct Action, 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 Direct
Action.
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
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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, however, 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
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<PAGE>
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).
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Notices
Notices to Holders of Debt Securities will be given by mail to the addresses
of such Holders as they may appear in the security register therefor.
Title
The Company, the Debenture Trustee, and any agent of the Company or the
Debenture Trustee, may treat the person in whose name Debt Securities are
registered as the absolute owner thereof (whether or not such Debt Securities
may be overdue) for the purpose of making payments and for all other purposes
irrespective of notice to the contrary.
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 herein) 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 (the "Code"), 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.
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<PAGE>
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 would, among other
things, generally 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
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<PAGE>
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
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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, 40 West 57th Street, New York, New York. 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 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.
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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 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:
<TABLE>
<CAPTION>
Number of
Underwriters Preferred Securities
------------ --------------------
<S> <C>
Morgan Stanley & Co. Incorporated...................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................
------------
Total............................................ ============
</TABLE>
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 will be made to list the Preferred Securities on the
NYSE. Listing is contingent upon meeting the requirements of the New York Stock
Exchange, 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 Securities Act of 1933, as amended.
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<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses payable by the Company in
connection with the issuance and distribution of the securities to be
registered.
<TABLE>
<CAPTION>
<S> <C>
Filing fee - Securities and Exchange Commission.. $ 24,138.00
Filing fee - New York Stock Exchange............. 35,500.00
Trustees' Fees, including counsel................ 30,000.00
Company Counsel Fees............................. 15,000.00
Auditors' fees................................... 15,000.00
Rating agencies' fees............................ 45,000.00
Printing, including Registration Statement,
prospectuses, exhibits, etc.................... 20,000.00
Blue Sky fees and expenses....................... 10,000.00
Miscellaneous.................................... 15,362.00
-----------
Total expenses................................... $210,000.00
===========
</TABLE>
Item 15. Indemnification of Directors and Officers.
The Company's Restated Certificate and Articles of Incorporation, as
amended, provides that the Company shall indemnify, to the full extent that it
shall have power to do so under applicable law, each director and officer
against all costs and liabilities reasonably incurred by or imposed on such
persons in connection with any litigation in which such director or officer may
be involved by reason of being or having been a director or officer of the
Company. This provision is not exclusive of other rights to which any director
or officer may otherwise be entitled. Under applicable corporate law, the
Company may, upon a determination that such persons have met the applicable
statutory standard of conduct, indemnify directors, officers, employees and
agents against expenses, judgments, fines and settlement payments reasonably
incurred.
Subject to certain exceptions, the directors and all corporate officers of
the Company are insured to an overall limit of $45,000,000 (subject to a Company
deductible of $200,000 for each loss involving non-nuclear operations and
$1,000,000 for each loss involving nuclear operations) because of any claim or
claims made against them, including claims arising under the Act and caused by
any negligent act, any error, any omission or any breach of duty while acting in
their capacities as such directors or officers, and the Company is insured to
the extent that it shall have indemnified the directors and officers for such
loss. The premiums for such insurance are paid by the Company.
II-1
<PAGE>
<TABLE>
<CAPTION>
Item 16. Exhibits.
Exhibit
Number Description of Exhibits
- ------- -----------------------
<S> <C>
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 and Consent 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 are included in their respective opinions filed as
Exhibits 5-A, 5-B, 5-C and 8, respectively.
24 - Power of Attorney (see page II-5).
</TABLE>
- ---------------
* Incorporated by reference pursuant to Rule 411.
II-2
<PAGE>
<TABLE>
<S> <C>
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.
</TABLE>
II-3
<PAGE>
Item 17. Undertakings.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, as amended (the "1933 Act"), each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference in this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered hereby, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(2) For purposes of determining any liability under the 1933 Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the 1933 Act shall be deemed to be part of this Registration Statement
as of the time it was declared effective.
(3) For the purpose of determining any liability under the 1933 Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(4) Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933
Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below and on the following pages hereby
authorizes any agent for service named in this Registration Statement to execute
in the name of each such person, and to file with the Securities and Exchange
Commission, any and all amendments, including post-effective amendments, to this
Registration Statement, which amendments may make such changes in this
Registraion Statement as the registrant deems appropriate and appoints such
agent for service as attorney-in-fact to sign in each such person's behalf
individually and in each capacity stated below and file any such amendments to
the Registration Statement and the registrant hereby also appoints each such
agent for service as its attorney-in-fact with like authority to sign and file
any such amendments in its name and behalf.
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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wilmington, State of Delaware, on June 27, 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 dates indicated.
Signature Title Date
--------- ----- ----
/s/ H.E. Cosgrove Chairman of the Board, June 27, 1996
- ---------------------------- President, Chief Executive
(H.E. Cosgrove) Officer and Director
(Principal Executive Officer)
/s/ B.S. Graham Senior Vice President, June 27, 1996
- ---------------------------- Treasurer and Chief
(B.S. Graham) Financial Officer
(Principal Financial Officer)
/s/ James P. Lavin Comptroller and Chief June 27, 1996
- ---------------------------- Accounting Officer
(James P. Lavin) (Principal Accounting Officer)
/s/ Michael G. Abercrombie Director June 27, 1996
- ----------------------------
(Michael G. Abercrombie)
/s/ R. Franklin Balotti Director June 27, 1996
- ----------------------------
(R. Franklin Balotti)
II-5
<PAGE>
/s/ Robert D. Burris Director June 27, 1996
- ----------------------------
(Robert D.Burris)
/s/ Audrey K. Doberstein Director June 27, 1996
- ----------------------------
(Audrey K. Doberstein)
/s/ Michael B. Emery Director June 27, 1996
- ----------------------------
(Michael B. Emery)
/s/ James H. Gilliam, Jr. Director June 27, 1996
- ----------------------------
(James H. Gilliam, Jr.)
Director
- ----------------------------
(Sarah I. Gore)
/s/ James C. Johnson, III Director June 27, 1996
- ----------------------------
(James C. Johnson, III)
- ----------------------------
(Weston E. Nellius) Director
II-6
<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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wilmington, State of Delaware, on June 27, 1996.
Delmarva Power Financing I
By: /s/ B.S. Graham
-------------------------------------
(B.S. Graham, Administrative Trustee)
II-7
<PAGE>
<TABLE>
<CAPTION>
Exhibit Index
Exhibit
Number Description of Exhibits
- ------- -----------------------
<S> <C>
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 and Consent 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 are included in their respective opinions filed as
Exhibits 5-A, 5-B, 5-C and 8, respectively.
24 - Power of Attorney (see page II-5).
</TABLE>
- ---------------
* Incorporated by reference pursuant to Rule 411.
<PAGE>
<TABLE>
<S> <C>
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.
</TABLE>
<PAGE>
Exhibit 1-A
DELMARVA POWER FINANCING I
_____% Trust Preferred Capital Securities
(Liquidation Preference $25.00 per Preferred Security
UNDERWRITING AGREEMENT
----------------------
_______ __, 199_
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Ladies and Gentlemen:
The undersigned, Delmarva Power Financing I (the "Trust"), a statutory
business trust created under the Business Trust Act (the "Delaware Act") of the
state of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. (S)(S)
3801 et seq.) and Delmarva Power & Light Company, a Delaware and Virginia
-- ----
corporation (the "Company"), hereby confirm their agreement with each of the
Underwriters hereinafter named as follows:
The term "Underwriters" as used herein shall be deemed to mean the firm or
corporation or the several firms or corporations named in Schedule II hereto and
any underwriter substituted as provided in Section 3 and the term "Underwriter"
shall be deemed to mean one of such Underwriters. If the firm or firms listed in
Schedule I hereto (the "Representative") are the same as the firm or firms
listed in Schedule II hereto, then the terms "Underwriters" and
"Representative", as used herein, shall each be deemed to refer to such firm or
firms. The Representa tive represents that it has been authorized by the
Underwriters to execute this Agreement on their behalf and to act for them in
the manner herein provided. All obligations of the Underwriters hereunder are
several and not joint. If more than one firm is named in Schedule I hereto, any
action under or in respect of this Agreement may be taken by such firms jointly
as the Representative or by one of the firms acting on behalf of the
Representative and such action will be binding upon all the Underwriters.
1. Description of Securities. The Trust and the Company, as depositor of
-------------------------
the Trust and as guarantor, propose,
<PAGE>
subject to the terms and conditions stated herein, that the Trust issue and sell
to the Underwriters the Trust Preferred Capital Securities specified above (each
a "Security" and collectively the "Securities") representing undivided preferred
beneficial interests in the assets of the Trust in the amount specified in
Schedule 1 hereto. The Securities are guaranteed on a subordinated basis by the
Company as to the payment of distributions, and as to payments on liquidation or
redemption, to the extent set forth in a Guarantee Agreement (the "Guarantee")
between the Company and Wilmington Trust Company, as trustee (the "Guarantee
Trustee"). The Trust is to invest the proceeds of the sale of the Securities
and its Common Securities (liquidation amount $25 per common security) (the
"Common Securities") in the amount specified in Schedule I in the Company's
Junior Subordinated Debentures of the Series designated in Schedule I (the
"Debentures") to be issued pursuant to an Indenture (the "Indenture") between
the Company and Wilmington Trust Company, as trustee (the "Debenture Trustee").
2. Representations, Warranties and Agreements of the Company. The
---------------------------------------------------------
Company represents and warrants to, and agrees with, the several Underwriters
that:
(a) A registration statement (identified in Schedule I hereto),
including a preliminary prospectus, together with amendments thereto, if
any, with respect to the Securities, the Debentures and certain obligations
of the Company under the Guarantee, the Indenture and the Agreement as to
Expenses and Liabilities between the Company and the Trust (the "Expense
Agreement") has been prepared by the Trust and the Company and filed with
the Securities and Exchange Commission (the "Commission") in conformity
with the rules, regulations and releases of the Commission (the "Rules and
Regulations") under the Securities Act of 1933, as amended (the "Act").
Such registration statement has been declared effective by the Commission
and the Trust Agreement, the Guarantee and the Indenture have been
qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). Copies of said registration statement, together with all amendments
thereto, if any, including the exhibits filed therewith, have heretofore
been delivered to the Representative, and copies of any amendments thereto,
including the exhibits filed therewith, which shall be subsequently filed
will be so delivered to the Repre sentative. As used in this Agreement,
the term "Registration Statement" means said registration statement,
including the exhibits, financial statements and all documents incorporated
therein by reference, as amended to the date hereof, and including the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act and deemed by virtue
2
<PAGE>
of Rule 430A under the Act to be part of the registration statement at the
time it was declared effective. As used in the Agreement, the term
"Prospectus" means the prospectus in the form included in the Registration
Statement completed to reflect the terms of the offering, proposed to be
filed on or about the date hereof with the Commission pursuant to Rule
424(b), including all documents incorporated in such prospectus by
reference (the "Incorporated Documents"). In the event of any amendment to
the Registration Statement after the date hereof, the term "Registration
Statement" also shall mean such Registration Statement as so amended. In
the event of any supplement to the Prospectus, after the date of the filing
with the Commission of the Prospectus pursuant to Rule 424(b), the term
"Prospectus" also shall mean such Prospectus as so amended or supplemented.
Any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement or the Prospectus shall be deemed to
refer to and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), deemed to be incor
porated therein after the date hereof and prior to the termination of the
offering of the Securities by the Underwriters.
(b) No stop order suspending the effectiveness of the Registration
Statement, nor any order preventing or suspending use of the Prospectus nor
any order directed to the adequacy or accuracy of any Incorporated Document
has been issued by the Commission, and no proceeding for any such purpose
has been initiated or is pending or, to the knowledge of the Company, is
contemplated by the Commission.
(c) On the date of this Agreement and at all times subsequent hereto
up to and at the Closing Date (as defined in Section 3), (i) the
Registration Statement and the Prospectus do and will, contain all
statements and infor mation which are required to be included therein by
the Act and the Rules and Regulations and will conform, in all mate rial
respects, to the requirements of the Act and the Rules and Regulations;
(ii) the Registration Statement does not and will not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading; and (iii) the Prospectus does not and will not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from the Registration
Statement or the
3
<PAGE>
Prospectus, in reliance upon and in conformity with written information
furnished to the Company by any Underwriter expressly for use in the
preparation thereof. There are no contracts or documents of the Company or
of any Subsidiary (as defined below) of the Company which are required to
be filed as exhibits to the Registration Statement by the Act or by the
Rules and Regulations which have not been filed as required.
(d) The Company has filed timely all reports and all definitive proxy
and information statements required to be filed by the Company with the
Commission pursuant to the Exchange Act and the rules and regulations of
the Commission thereunder. Each of the Incorporated Documents, when it and
any amendment thereto was filed with the Commission, complied as to form in
all material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder, and any Incorporated Document
and any amendment thereto, when filed with the Commission will comply as to
form in all material respects to the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder; and none of such
documents includes or will include any untrue statement of a material fact
or omits or will omit to state any material fact required to be stated
therein, or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(e) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Delaware Act with the
power and authority (trust and other) to own property and conduct its
business as described in the Registration Statement and Prospectus, and has
conducted and will conduct no business other than the transactions
contemplated by this Agreement and described in the Prospectus; the Trust
is not a party to or bound by any agreement or instrument other than this
Agreement, the trust agreement (as amended and restated from time to time,
the "Trust Agreement") between the Company and the trustees named therein
(the "Trustees") and the agreements and instruments contemplated by the
Trust Agreement and described in the Prospectus; the Trust has no
liabilities or obligations other than those arising out of the transactions
contemplated by this Agreement and the Trust Agreement and described in the
Prospectus; and the Trust is not a party to or subject to any action, suit
or proceeding of any nature.
(f) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of Delaware and Virginia, with
all corporate authority,
4
<PAGE>
including franchises, necessary to own or lease its properties and conduct
its business as described in the Registration Statement and the Prospectus;
the Company is duly qualified to do business as a foreign corporation in
good standing in Maryland, New Jersey, Ohio and Pennsyl vania, being all of
the jurisdictions in which the conduct of its business or its ownership or
leasing of property requires such qualification, with all corporate
authority, including franchises necessary to own or lease its properties
and conduct its business as described in the Registration Statement and
Prospectus. The Company has no direct subsidiaries other than Delmarva
Energy Company, Delmarva Industries, Inc., Delmarva Capital Investments,
Inc. and Delmarva Services Company (the "Subsidiaries"), all of the stock
of each of which is owned by the Company, free and clear of any lien,
pledge or other encumbrance except for those matters satisfactory to the
Underwriters discussed in the opinion of Dale G. Stoodley, General Counsel
for the Company, delivered pursuant to Section 5(d) hereof. Each of the
Subsidiaries has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to do business as a foreign corporation
and is in good standing under the laws of any jurisdiction in which the
conduct of its business or its ownership or leasing of property requires
such qualification, with all corporate and other authority and franchises
necessary to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus.
(g) The performance of this Agreement and the consummation of the
transactions contemplated by this Agreement and described in the Prospectus
and the fulfillment of the terms hereof will not result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any statute, indenture, mortgage, deed of trust, note agreement or
other agreement or instrument to which the Trust, the Company or any of the
Subsidiaries is a party or by which any of them is bound or to which any of
their property is subject, or the Trust Agreement or the Company's Restated
Certificate and Articles of Incorporation, as amended, or By-Laws, as
amended, or any order, rule or regulation of any court or other
governmental body applicable to the Trust, the Company or any of the Sub
sidiaries or any of their property.
(h) The Company has full power and lawful authority to authorize,
issue and sell or exchange the Debentures and to enter into the Indenture,
the Guarantee and the Expense Agreement as described in the Prospectus; has
taken all corporate action necessary therefor; and has obtained every
5
<PAGE>
consent, approval, authorization or other order of any regulatory body
which is required therefor, except as may be required under state
securities laws; and such consents, approvals, authorizations or other
orders are not subject to appeal.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth
in or contemplated by the Registration Statement and the Prospectus: (1)
neither the Company and the Subsidiaries taken as a whole nor the Trust
have incurred any material liabilities or obligations, direct or
contingent, or have entered into any material transaction, not in the
ordinary course of business; (2) there has not been any material change in
the capital stock or long-term debt of the Company and the Subsidiaries
taken as a whole or any material adverse change, or development involving a
prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business, net worth or results of operations
of the Trust or the Company and the Subsidiaries taken as a whole; (3) no
material loss or damage (whether or not insured) to the property of the
Company and the Subsidiaries taken as a whole has been sustained; and (4)
no legal or governmental proceeding, domestic or foreign, materially
affecting the Trust, the Company and the Subsidiaries taken as a whole, or
the transactions contemplated by this Agreement and described in the
Prospectus, has been instituted or, to the knowledge of the Trust or the
Company, threatened.
(j) The financial statements set forth in or incorporated by
reference into the Registration Statement and the Prospectus fairly present
the consolidated financial condition of the Company and the Subsidiaries
and the results of their operations as of the dates and for the periods
therein specified; and said financial statements (including the related
notes) have been prepared in accordance with generally accepted accounting
principles which have been consistently applied throughout the periods
involved.
(k) Coopers & Lybrand L.L.P., which has reported on certain financial
statements filed with the Commission and incorporated by reference into the
Registration Statement and the Prospectus, are independent certified public
accountants as required by the Act and the Rules and Regulations.
(l) Except as set forth in or contemplated by the Registration
Statement and the Prospectus, there is not pending any action, suit or
other proceeding to which the
6
<PAGE>
Trust, the Company or any of the Subsidiaries is a party or of which any
property of any of them is the subject, before or by any court or other
governmental body, which might result in any material adverse change in the
condition, business or prospects of the Trust or the Company and the
Subsidiaries taken as a whole, or might materially adversely affect the
properties or assets of the Trust or the Company and the Subsidiaries taken
as a whole; and no such action, suit or proceeding is known by the Trust or
the Company to be threatened or contemplated.
(m) The Securities have been duly and validly authorized by the
Trust, and, when issued and delivered against payment therefor as provided
herein, will be duly and validly issued and fully paid and non-assessable
undivided beneficial interests in the assets of the Trust and will conform
to the description thereof contained in the Registration Statement and the
Prospectus; the issuance of the Securities is not subject to preemptive or
other similar rights.
(n) The Common Securities have been duly and validly authorized by
the Trust, and, when issued and delivered to the Company by the Trust
against payment therefor as provided in the Prospectus, will be duly and
validly issued and fully paid and non-assessable undivided beneficial
interests in the assets of the Trust and will conform to the description
thereof contained in the Registration Statement and Prospectus; the
issuance of the Common Securities is not subject to preemptive or other
similar rights; on the Closing Date, all of the issued and outstanding
Common Securities of the Trust will be directly owned by the Company, free
and clear of all liens, encumbrances, equities or claims; and the Common
Securities and the Securities are the only interests authorized to be
issued by the Trust;
(o) Neither the Trust nor the Company is or, after giving effect to
the offering and sale of the Securities, will be an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act"); and
(p) The Company and the Subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective
7
<PAGE>
businesses and (iii) are in compliance with all terms and conditions of any
such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals are disclosed in the financial statements
set forth in or incorporated by reference into the Registration Statement
and Prospectus or would not, singly or in the aggregate, have a material
adverse effect on the Company and the Subsidiaries, taken as a whole.
(q) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and the Subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably
concluded that, other than as disclosed in the financial statements set
forth in or incorporated by reference into the Registration Statement and
Prospectus, such associated costs and liabilities would not, singly or in
the aggregate, have a material adverse effect on the Company and the
Subsidiaries, taken as a whole.
(r) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or
with any person or affiliate located in Cuba.
3. Sale, Purchase, and Delivery of Securities; Substitution of
-----------------------------------------------------------
Underwriters. On the basis of the repre sentations, warranties and agreements
- ------------
herein contained, and subject to the terms and conditions herein set forth, the
Trust and the Company agree that the Trust will sell to each of the
Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Trust, the respective principal amount of Securities set forth
opposite the name of such Underwriter in Schedule II hereto at the purchase
price set forth in Schedule I hereto.
As compensation to the Underwriters for their commitments hereunder,
and in view of the fact that the proceeds from the sale of the Securities will
be used by the Trust to purchase the Debentures, the Company on the Closing Date
will pay by wire transfer of immediately available funds to the
8
<PAGE>
Representative, for the accounts of the several Underwriters, an amount equal to
$_________ per Security for the Securities to be delivered by the Trust
hereunder on the Closing Date.
Payment for and delivery of the Securities (the "Closing") shall be
made at the place, time and date specified in Schedule I hereto or at such other
time and date as the Representative, the Trust and the Company may agree in
writing, such time and date for payment being herein referred to as the "Closing
Date". The Securities to be purchased by each Underwriter hereunder will be
represented by one global Security in book-entry form which will be deposited by
or on behalf of the Trust with The Depository Trust Company ("DTC") or its
designated custodian. The Trust will deliver the Securities to the
Representative, for the account of each Underwriter, against payment by or on
behalf of such Underwriter of the purchase price therefor by wire transfer of
immediately available funds to an account or accounts designated in writing by
the Trust, by causing DTC to credit the Securities to the account of the
Representative at DTC. The Trust will cause the certificates representing the
Securities to be made available to the Representative for checking at least
twenty-four hours prior to the Closing Date. Time shall be of the essence, and
delivery at the time determined as set forth above is a further condition of the
obligation of each Underwriter, the Trust and the Company.
It is understood that the several Underwriters propose to offer the
Securities for sale as set forth in the Prospectus.
In the event of default by one or more Underwriters in respect of
their obligations under this Agreement to take up and pay for the Securities
pursuant to this Section, and if the aggregate of such defaults shall not exceed
10% of the Securities, the remaining Underwriters shall be obligated sev erally
(in proportion to their respective commitments hereunder or in such other
proportion as may be agreed upon by the Representative) to purchase the
Securities which such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter or Underwriters shall for any reason permitted
under this Agreement cancel their obligations to take up and pay for the
Securities pursuant to this Section, or in the event of a default by one or more
Underwriters in respect of their obligations under this Agreement to take up and
pay for the Securities pursuant to this Section, and if the aggregate of such
cancellations or defaults shall exceed 10% of the aggregate principal amount of
the Securities, the remaining Underwriters shall have the right to take up and
pay for (in such proportion as may be agreed upon by the Representative) the
Securities, which the canceling or defaulting Underwriter or Underwriters agreed
but failed to purchase. If such remaining Underwriters do not, at the Closing
Date, take up and pay for the aggregate
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principal amount of the Securities which the canceling or defaulting Underwriter
or Underwriters failed to purchase, the time for delivery of the Securities
shall be extended for twenty-four hours, and the several Underwriters shall have
the privilege of substituting within such twenty-four hours another underwriter
or underwriters satisfactory to the Company. If no such underwriter or
underwriters shall have been substituted as aforesaid, prior to the termination
of such extended time for delivery, the time for delivery of the Securities
shall be extended for a further twenty-four hours, during which the Trust and
the Company shall have the privilege of finding another underwriter or
underwriters, satisfactory to the Representative, to purchase the aggregate
principal amount of the Securities which the canceling or defaulting Underwriter
or Underwriters failed to purchase. If it shall be arranged for the remaining
Underwriters or substituted underwriters to take up the Securities of the
canceling or defaulting Underwriter or Underwriters as provided in this Section,
(i) the Representative or the Company shall have the right to postpone the time
of delivery of the Securities, for a period of not more than five full business
days, in order to effect whatever changes that such arrangements may make
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Trust and the Company agree promptly to file
any amendment to the Registration Statement or any supplement to the Prospectus
which such arrangements may make necessary, and (ii) the Securities to be
purchased by the remaining Underwriters or substituted underwriters shall be
taken as the basis of their respective underwriting obligations for all purposes
of this Agreement.
If, in the event of a default by one or more Underwriters, the
remaining Underwriters shall not take up and pay for all of the Securities
agreed to be purchased by the defaulting Underwriters or substitute another
underwriter or underwriters as aforesaid and the Trust and the Company shall not
find another underwriter or underwriters for such Securities, as aforesaid, then
this Agreement may be terminated by the Trust and the Company by giving prompt
notice to the remaining Underwriters.
If the Trust and the Company shall not so elect to terminate this
Agreement, they shall have the right to require such remaining Underwriters,
irrespective of the default as aforesaid, to purchase the aggregate principal
amount of the Securities which they have agreed to purchase hereunder. In such
event the Trust and the Company shall, within twenty-four hours after such
second twenty-four hour period, give notice thereof in writing or by facsimile
transmission to such remaining Underwriters and thereupon the time for delivery
of the Securities may be postponed for a period of not more than five full
business
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days in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Trust and the Company agree promptly to file any amendment
to the Registration Statement or any supplement to the Prospectus which may
thereby be made necessary. In the absence of such notice from the Trust and the
Company, this Agreement shall terminate without further action on the part of
the Trust, the Company or the Underwriters.
In the event of any such termination, the Trust and the Company shall
not be under any liability to any Underwriter (except to the extent provided in
Sections 4(e) and 7 hereof) nor shall any Underwriter (other than an Underwriter
who shall have failed to purchase Securities otherwise than for some reason
permitted under this Agreement) be under any liability to the Trust and the
Company (except to the extent provided in Section 7 hereof).
Any action taken by the non-defaulting Underwriters or by the Trust or
the Company under this Section shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
4. Covenants of the Company. The Trust and the Company, jointly and
------------------------
severally, further covenant and agree with the several Underwriters that:
(a) The Trust and the Company shall comply with the provisions of,
and make all requisite filings with the Commission pursuant to, Rule 424(b)
and notify the Representative promptly of all such filings. Neither the
Trust nor the Company will at any time file any amendment to the
Registration Statement or supplement to the Prospectus of which the
Representative shall not previously have been advised and furnished with a
copy or to which the Representative or Reid & Priest LLP, counsel for the
several Underwriters, shall have reasonably and promptly objected in
writing or which is not in compliance with the Act or the Rules and
Regulations. The Trust and the Company will prepare and file with the
Commission, promptly upon the Representative's request, any amendment to
the Registration Statement or supplement to the Prospectus which, in the
opinion of counsel for the several Underwriters and counsel for the
Company, may be necessary or advisable in connection with the offering of
the Securities by the Underwriters. The Company will file timely all
reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to the Exchange Act and
the rules and regulations of the Commission thereunder subsequent to the
date hereof and for so long as the
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delivery of a prospectus is required in connection with the offering or
sale of the Securities.
(b) The Trust and the Company will notify the Representative promptly
and confirm in writing (i) the issu ance of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of the Prospectus or any order directed to the adequacy
or accuracy of any Incorporated Document or of the initiation of any
proceedings for any such purpose and (ii) the receipt of any comments from
the Commission in respect of the Registration Statement or the Prospectus,
or requesting additional information or the amendment or sup plementation
of the Registration Statement or the Prospectus. If the Commission shall
issue a stop order or any order preventing or suspending the use of the
Prospectus or any order directed to the adequacy or accuracy of any
Incorporated Document at any time, or shall initiate any proceedings for
any such purpose, the Trust and the Company will make every reasonable
effort to prevent the issuance of such order and, if issued, to obtain the
lifting thereof.
(c) Within the time during which a prospectus relating to the
Securities is required to be delivered under the Act, the Company will
comply so far as it is able with all requirements imposed upon it by the
Act, as now and hereafter amended, and by the Rules and Regulations, as
from time to time in force, so far as necessary to permit the continuance
of sales of or dealings in the Securities as contemplated by the provisions
hereof; and if during such period any event occurs as a result of which the
Prospectus would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
if during such period it is necessary to amend or supplement the Prospectus
to comply with the Act or the Rules and Regulations or to file under the
Exchange Act or the rules and regulations of the Commission thereunder any
document incorporated by reference into the Prospectus in order to comply
with the Act, the Rules and Regulations, the Exchange Act or the rules and
regulations of the Commission thereunder, the Trust and the Company will
promptly notify the Representative and will amend or supplement the
Prospectus or file such document (in form satisfactory to counsel for the
Underwriters and counsel for the Trust and the Company and at the expense
of the Company) so as to correct such statement or omission or effect such
compliance.
(d) The Trust and the Company will cooperate with the Underwriters in
qualifying and registering the Securities
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for sale under the securities laws and legal investment laws of such
jurisdictions as the Representative may designate, and in continuing such
qualifications in effect so long as required for the distribution of the
Securities; provided, however, that neither the Trust nor the Company shall
be obligated to file any general consent to service of process or to submit
to any requirements which it deems unduly burdensome. The Trust and the
Company will advise the Representative promptly of any order or
communication of any public authority addressed to it suspending or
threatening to suspend qualification of the Securities for sale in any
jurisdiction.
(e) Whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, the Company will pay, or
reimburse the Underwriters on demand for, all reasonable costs and expenses
incident to the performance of the Company's obligations under this
Agreement, including all expenses incident to the authorization of the
Securities and their issue and delivery by the Trust, all expenses incident
to listing the Securities on any stock exchange, any necessary stamp taxes
in connection with the foregoing, the reasonable fees and expenses of the
Company's counsel and accountants and Special Counsel to the Company and
the Trust, the costs and expenses incident to the preparation and filing
under the Act of the Registration Statement (including all exhibits and
amendments thereto), the Prospectus and this Agreement, all fees and
disbursements (including reasonable fees and disbursements of counsel)
incurred by the Trust, the Company or the Underwriters in connection with
the qualification of the Securities for sale under state securities laws
and the preparation of Blue Sky Memoranda and Legal Investment Surveys, the
cost of furnishing to the Underwriters copies of Blue Sky Memoranda and
Legal Investment Surveys, the Registration Statement and the Prospectus,
and each amended or supplemented Registration Statement or Prospectus and
each Prospectus prepared to permit compliance with Section 10(a)(3) of the
Act and the cost of preparing copies of this Agreement, the Trust
Agreement, the Indenture, the Guarantee and the Expense Agreement, any fees
charged by securities ratings services for rating the Securities, the cost
and charges of any transfer agent or registrar, the cost and charges of
qualifying the Securities with DTC, the fees and expenses of the Trustees,
the Debenture Trustee and the Guarantee Trustee and any agent thereof and
the fees and disbursements of their counsel. The Company shall not,
however, be required to pay for any of the Representative's expenses or
those of any of the other Underwriters, other than as hereinabove set forth
and the costs of preparing copies of the legal opinion referred to in
subparagraph (f)
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<PAGE>
of Section 5 hereof, the Underwriters' Questionnaires and the Agreement
Among Underwriters; provided, however, that, if this Agreement shall not be
consummated because it is (i) terminated by the Representative pursuant to
Section 5 or Section 6 hereof, (ii) terminated pursuant to Section 3
hereof, or (iii) terminated by reason of any failure, refusal or inability
on the part of the Trust or the Company to perform any undertaking or
satisfy any condition of this Agreement or to comply with any of the terms
hereof on its part to be performed, unless such failure, refusal or
inability be due to the default or omission of the Underwriters, then and
in any such case, the Company shall reimburse the several Underwriters (but
not defaulting Underwriters in the event of termination pursuant to Section
3 hereof) for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel for the several Underwriters) reasonably incurred
in connection with investigating, marketing and proposing to market the
Securities or in contemplation of performing their obligations hereunder,
but the Company shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits or
commissions from the sale by them of the Securities.
(f) The Trust will apply the proceeds from the sale of the
Securities, and the Company will apply the proceeds from the sale of the
Debentures, in each case substantially as set forth under the caption "Use
of Proceeds" in the Prospectus.
(g) The Trust and the Company will deliver to the Representative, as
promptly as practicable, a signed copy of the Registration Statement and
all amendments thereto including all exhibits filed therewith and signed
consents, certificates and opinions of accountants and of any other persons
named in the Registration Statement as having prepared, certified or
reviewed any part thereof, and will deliver to the Representative such
number of unsigned copies of the Registration Statement, without exhibits,
and of all amendments thereto, as the Representative may reasonably
request. The Trust and the Company will deliver to or upon the order of
the Representative, from time to time, as many copies of the Prospectus
(excluding Incorporated Documents) as the Representative may reasonably
request.
(h) The Company will make generally available to its security holders
and deliver to the Representative as soon as it is practicable to do so, an
earnings statement (which need not be audited) covering a period of at
least twelve months beginning not later than the first day of the month
next succeeding the month in which occurred the effective
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<PAGE>
date of the Registration Statement (as defined in Rule 158 under the Act),
which shall satisfy the requirements of Section 11(a) of the Act.
(i) For a period of five years from the Closing Date, the Company
will deliver to the Representative and, upon request, to each of the other
Underwriters (i) as soon as available, a copy of each report of the Company
mailed to security holders or filed with the Commission and (ii) from time
to time such other information concerning the Company as the Representative
shall reasonably request. If at any time, the Company shall have a
majority-owned subsidiary or subsidiaries which is or are "significant"
within the meaning of Regulation S-X of the Commission, the financial
statements contained in the documents referred to in (i) shall be furnished
in consolidated form, if such consolidation is required under such
Regulation S-X, for the Company and such subsidiary or subsidiaries.
(j) During the period beginning on the date hereof and continuing
through the Closing Date, neither the Trust nor the Company will offer,
sell or otherwise alienate, without the Representative's prior consent, any
other Securities of the Trust or the Company as the case may be, that are
substantially similar to the Securities (including any guarantee of such
Securities) or any securities that are convertible into or exchangeable
for, or that represent the right to receive, any such substantially similar
securities of either the Trust or the Company.
(k) The Trust and the Company will use best efforts to effect the
listing of the Securities on the New York Stock Exchange; if the Securities
are exchanged for Debentures, the Company will use its best efforts to
effect the listing of the Debentures on the exchange on which the
Securities were then listed.
5. Conditions of Underwriters' Obligations. The obligations of the
---------------------------------------
several Underwriters to purchase and pay for the Securities, as provided herein,
shall be subject to the accuracy, as of the date hereof and as of the Closing
Date (as if made on such Date), of the representations and warranties of the
Trust and Company herein, to the accuracy of statements of the Trustees and
Company officers made in certificates delivered pursuant to the provisions
hereof, to the performance by the Trust and the Company of their obligations
hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement, or order preventing or suspending the use of the Prospectus,
shall have been issued; no order
15
<PAGE>
of the Commission directed to the adequacy or accuracy of any Incorporated
Document shall be in effect; and no proceedings for any such purpose shall
have been instituted or be pending or, to the knowledge of the Trust, the
Company or the Representative, shall be contemplated or threatened by the
Commission; any request of the Commission for addi tional information (to
be included in the Registration Statement or the Prospectus or otherwise)
shall have been complied with to the reasonable satisfaction of Reid &
Priest LLP, counsel for the several Underwriters; no amend ment to the
Registration Statement or Prospectus shall have been filed hereafter to
which the Representative or Reid & Priest LLP, counsel for the several
Underwriters, shall have reasonably and promptly objected in writing after
having received reasonable notice and a copy thereof; there shall be in
full force and effect on the date of this Agreement appropriate orders of
The Public Service Commission of Delaware and the State Corporation
Commission of Virginia permitting the transactions contemplated by this
Agreement and described in the Prospectus substantially in accordance with
the terms and conditions set forth herein and therein; such orders shall
contain no condition inconsistent with the provisions hereof or
unacceptable to the Representative and shall be issued under circumstances
that in the Representative's reasonable judgment are appropriate for the
protection of the Underwriters; and on or prior to the Closing Date,
neither of said orders shall have been rescinded, modified or stayed, or
the right of the Company to operate thereunder restrained, or be subject to
any litigation or proceeding pending, or to the knowledge of the
Representative, the Trust or the Company, threatened; there shall not have
occurred any decrease in the ratings of any of the securities of the
Company or of the Securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the 1933
Act Regulations) and such organization shall not have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the securities of the Company or of the
Securities.
(b) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth
in or contemplated by the Prospectus, there shall not have been any change
in the capital stock, short-term debt or long-term debt of the Company and
the Subsidiaries taken as a whole, or any adverse change or any development
involving a prospective adverse change in the condition, financial or
otherwise, or in the earnings, business, net worth or results of operations
of the Trust or the Company and the Subsidiaries taken as a whole, all or
any of which, in the
16
<PAGE>
Representative's reasonable judgment, materially impairs the investment
quality of the Securities; and no Underwriter shall have disclosed in
writing to the Company on or prior to the Closing Date that the
Registration Statement or Prospectus contained an untrue statement of fact
which, in the opinion of Reid & Priest LLP, counsel for the Under writers,
is material, or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary
to make the statements therein not misleading.
(c) The authorization and issuance of the Securities, the Guarantee,
the Debentures, the Registration Statement, the Prospectus and all
corporate proceedings and other legal matters incident thereto shall be
satisfactory in all material respects to Reid & Priest LLP, and the Trust
and the Company shall have furnished to Reid & Priest LLP such documents as
they reasonably may request to enable them to be satisfied with respect to
the matters referred to in this subparagraph and to furnish to the
Representative an opinion, dated as of the Closing Date, as required by
subparagraph (f) of this Section 5.
(d) On the Closing Date, the Representative shall have received the
favorable opinion of Dale G. Stoodley, General Counsel for the Company,
dated as of such date, satisfactory in form, scope and substance to the
Representative and to counsel for the Underwriters to the effect that:
(i) the Company has been duly organized and is validly existing
as a corporation in good standing under the laws of Delaware and Virginia,
with all corporate power and other authority necessary to own or lease its
properties and conduct its business as described in the Registration
Statement and the Prospectus and to issue and sell or exchange the
Debentures; and each of the Subsidiaries has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction and is duly qualified to do business as a foreign corporation
and is in good standing under the laws of any jurisdiction in which the
conduct of its business or the ownership or leasing of its properties
requires such qualification, with all corporate and other authority and
franchises necessary to own or lease its properties and conduct its
business as described in the Registration Statement and Prospectus.
(ii) the Company is duly qualified as a foreign corporation in
good standing in Maryland, New Jersey, Ohio, Pennsylvania and West
Virginia, being all of the jurisdictions in which the conduct of its
business or its ownership or leasing of properties requires such
17
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qualification; and the Company owns all of the stock of the Subsidiaries,
free and clear of any lien, pledge or other encumbrance;
(iii) except as otherwise set forth in the Prospectus, and
except with respect to the location of certain poles, wires and other
facilities within public highways or over or under public or navigable
waters (the status of which does not in any case threaten to affect
materially the Company's ability to conduct its present business), the
Company has such valid franchises, certificates of convenience and
necessity, operating rights, licenses, permits, consents, approvals,
authorizations and/or orders of governmental bodies, political subdivisions
or regulatory authorities, free from materially burdensome restrictions, as
are necessary for the acquisition, construction and ownership of the
properties owned or leased by it and the maintenance and operation of the
properties operated by it and the conduct of the business carried on by it
as described in the Registration Statement and the Prospectus, and, to the
best of the knowledge of such counsel, the Company is not in default or
violation of any of such franchises, certificates of convenience and
necessity, operating rights, licenses, permits, consents, approvals,
authorizations and/or orders of governmental bodies, political subdivisions
or regulatory authorities, to the extent that would materially affect the
conduct of such business, and the Company is not, to any material extent,
in violation of any applicable Federal, state or other laws and
regulations;
(iv) the Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act; all filings
required under the laws of the State of Delaware with respect to the
formation and valid existence of the Trust as a business trust have been
made; the Trust is duly qualified for the transaction of business and is in
good standing under the laws of each jurisdiction in which it owns or
leases properties or conducts any business, except to the extent that the
failure to so qualify or be in good standing would not have a material
adverse effect on the Trust.
(v) the Securities have been duly authorized by the Trust
Agreement and are duly and validly issued and, subject to the
qualifications set forth herein, are fully paid and nonassessable undivided
beneficial interests in the assets of the Trust; the holders of the
Securities, as beneficial owners of the Trust, will be entitled to the same
limitation of personal liability under Delaware law as is extended to
stockholders of private corporations for profit
18
<PAGE>
organized under the General Corporation Law of the State of Delaware;
provided, however, that such counsel may note that the Securityholders may
be obligated, pursuant to the Trust Agreement, to (a) provide indemnity
and/or security in connection with, and pay taxes or governmental charges
arising from, transfers or exchanges of Securities certificates and the
issuance of replacement Securities certificates and (b) provide security
and indemnity in connection with requests of or directions to the Property
Trustee (as defined in the Trust Agreement) to exercise its rights and
remedies under the Trust Agreement. The issuance of the Securities is not
subject to preemptive or other similar rights.
(vi) the Securities conform as to legal matters to the
description thereof and the statements con cerning them contained in the
Registration Statement and the Prospectus, and the summary of certain terms
and provisions thereof appearing in the Registration Statement and the
Prospectus fairly presents the information called for by the Act and the
Rules and Regulations;
(vii) all of the Common Securities have been duly authorized by
the Trust Agreement and are owned by the Company, free and clear of all
liens, encumbrances, equities or claims; the Common Securities conform as
to legal matters to the description thereof in the Registration Statement
and the Prospectus; and the Trust is not a party to or otherwise bound by
any agreement other than this Agreement, the Trust Agreement and the
agreements contemplated by the Prospectus.
(viii) the Delaware Public Service Commission and the Virginia
State Corporation Commission have issued orders (to be identified by date
and docket number) authorizing the issuance and sale or exchange of the
Debentures, authorizing the Guarantee and authorizing generally the
transactions described in the Prospectus relating to the issuance and sale
by the Trust of the Securities (including permitting the Company to enter
into this Agreement and perform its obligations hereunder). Neither of
such orders contains any condition inconsistent with the provisions hereof
nor, to the best knowledge of such counsel, has either of such orders been
rescinded, modified or stayed, and no further action is required to be
taken by, and no further authorization, consent or approval is required to
be obtained from, any governmental authority having jurisdiction in
connection with the authorization, issuance and sale or exchange of the
Debentures (other than in connection with state securities or blue sky laws
as to which counsel need express no opinion);
19
<PAGE>
(ix) the statements in the Prospectus that are stated therein to
have been made on the authority of such counsel as an expert have been
reviewed by such counsel and, as to matters of law and legal conclusions,
are correct and fairly present the information required to be shown;
(x) such counsel does not know of any legal or governmental
proceedings required to be described in the Registration Statement or the
Prospectus that are not described as required, or of any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus, incorporated by reference into the Prospectus or
filed as exhibits to the Registration Statement by the Act or by the Rules
and Regulations that are not described, incorporated by reference or filed
as required;
(xi) the performance of this Agreement and the consummation of
the transactions contemplated by this Agreement and described in the
Prospectus and the fulfillment of the terms hereof will not result in a
breach of any of the terms or provisions of, or constitute a default under,
the Restated Certificate and Articles of Incorporation, as amended, or By-
Laws, as amended, of the Company, or any indenture, mortgage, deed of
trust, note or other agreement or instrument known to such counsel to which
the Company or any of the Subsidiaries is a party or by which any of them
is bound or to which any of their property is subject, or any order, rule
or regulation known to such counsel applicable to the Company or any of the
Subsidiaries of any court or other governmental body;
(xii) this Agreement has been duly authorized, executed and
delivered by the Company and is valid and binding on the Company, except
that rights to indemnity hereunder may be limited under securities laws;
(xiii) the issuance and delivery of the Debentures have been duly
authorized, and the Debentures have been duly executed, authenticated,
issued and delivered in accordance with the Indenture, and the Debentures
constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the Indenture; subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles (whether considered in a proceeding at law or in equity).
The Indenture has been duly authorized, executed and delivered and
constitutes a valid and legally binding obligation of the Company,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy,
20
<PAGE>
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles (whether
considered in a proceeding at law or in equity). The Indenture has been
duly qualified under the 1939 Act. The Debentures and the Indenture
conform as to legal matters to the descriptions thereof in the Registration
Statement and the Prospectus;
(xiv) the Guarantee has been duly authorized, executed and
delivered and constitutes a valid and legally binding obligation of the
Company, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles (whether considered in a proceeding at law or in
equity). The Guarantee has been duly qualified under the 1939 Act. The
Guarantee conforms as to legal matters to the descriptions thereof in the
Registration Statement and the Prospectus;
(xv) the Trust Agreement has been duly authorized, executed and
delivered and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization, and other laws
relating to or affecting creditors' rights and to general equity principles
(whether considered in a proceeding at law or in equity). Such counsel
need not express any opinion on whether the right of holders of Securities
or Common Securities to institute a legal proceeding directly against any
person to enforce any right of the Property Trustee is consistent with or
permitted by Section 3816 of the Delaware Act relating to derivative
securities. The Trust Agreement has been duly qualified under the 1939
Act. The Trust Agreement conforms as to legal matters to the description
thereof in the Registration Statement and the Prospectus;
(xvi) neither the Trust nor the Company is and, after giving
effect to the offering and sale of the Securities, will be an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the 1940 Act;
(xvii) the Registration Statement has become effective under the
Act, and, to the best knowledge of such counsel, no stop order with respect
thereto has been issued, no order directed to the adequacy or accuracy of
any Incorporated Document has been issued by the Commission and no
proceeding for any such purpose has been initiated or is pending or, to the
best knowledge of such counsel, contem-
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plated by the Commission; at the time the Registration Statement became
effective, the Registration Statement, and at the time the Prospectus was
first filed with the Commission pursuant to Rule 424(b), the Prospectus,
complied as to form in all material respects with the requirements of the
Act and the Rules and Regulations, and the Incorporated Documents, when
filed with the Commission, complied as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations of
the Commission thereunder; and such counsel has no reason to believe that
(i) the Registration Statement at the time the Registration Statement
became effective, and at the Closing Date, con tained or contains any
untrue statement of a material fact or omitted or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) the Prospectus, at the time the
Prospectus was filed with the Commission pursuant to Rule 424(b) and at the
Closing Date contained or contains any untrue statement of a material fact
or omitted or omits to state a material fact required to be stated therein
or necessary to make the Statements therein, in the light of the
circumstances under which they were made, not misleading, except that such
counsel need express no opinion as to the financial statements and other
financial data included therein; and
(xviii) the Securities have been listed, upon official notice of
issuance, on the New York Stock Exchange.
The foregoing opinion may be limited to the laws of the State of
Delaware and federal securities laws. In rendering his opinion, such counsel
may rely, as to matters of Delaware law relating to the Trust, the Preferred
Securities and the Trust Agreement, upon the opinion of Richards, Layton &
Finger, P.A., special Delaware counsel to the Trust and the Company, which shall
be delivered in accordance with Section 5(3) hereof, and as to matters of New
York law relating to the Debentures and the Indenture, upon the opinion of Reid
& Priest LLP, which shall be delivered in accordance with Section 5(f) hereof.
(e) On the Closing Date, the Representative shall have received the
favorable opinion of Richards, Layton & Finger P.A., special Delaware counsel to
the Trust and the Company, dated as of such date, satisfactory in form, scope
and substance to the Representative and to counsel for the Underwriters to the
effect that:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act, and all filings
required under the laws of
22
<PAGE>
the State of Delaware with respect to the creation and valid existence of
the Trust as a business trust have been made;
(ii) Under the Delaware Act and the Trust Agreement, the
Trust has the trust power and authority to own property and conduct its
business, all as described in the Registration Statement and the
Prospectus;
(iii) The Trust Agreement constitutes a valid and binding
obligation of the Company and the Trustees, enforceable against the Company
and the Trustees in accordance with its terms, subject, as to enforcement,
to (a) bankruptcy, insolvency, moratorium, receivership, liquidation,
fraudulent conveyance, reorganization and other similar laws relating to or
affecting the remedies and rights of creditors, (b) general principles of
equity, including applicable laws relating to fiduciary duties (regardless
of whether considered or applied in a proceeding in equity or at law) and
(c) the effect of applicable public policy on the enforceability of
provisions relating to indemnification or contribution;
(iv) Under the Delaware Act and the Trust Agreement, the
Trust has the trust power and authority (a) to execute and deliver, and to
perform its obligations under, this Agreement and (b) to issue and perform
its obligations under the Securities;
(v) Under the Delaware Act and the Trust Agreement, the
execution and delivery by the Trust of this Agreement, and the performance
by the Trust of its obligations hereunder, have been duly authorized by all
necessary trust action on the part of the Trust;
(vi) Under the Delaware Act, the certificate attached to the
Trust Agreement as Exhibit D is an appropriate form of certificate to
evidence ownership of the Securities; the Securities have been duly
authorized by the Trust and are duly and validly issued and, subject to the
qualifications set forth herein, fully paid and non-assessable undivided
beneficial interests in the assets of the Trust; the Securityholders, as
beneficial owners of the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware; provided, however, that such counsel may note that the
Securityholders may be obligated, pursuant to the Trust Agreement, to (a)
provide indemnity and/or security in connection with and pay a sum
sufficient to cover any taxes or governmental charges arising from
transfers or exchanges of Securities certificates and the
23
<PAGE>
issuance of replacement Securities certificates and (b) provide security
and/or indemnity in connection with requests of or directions to the
Property Trustee (as defined in the Trust Agreement) to exercise its rights
and powers under the Trust Agreement;
(vii) Under the Delaware Act and the Trust Agreement, the
issuance of the Securities is not subject to preemptive rights;
(viii) The issuance and sale by the Trust of the Securities,
the execution, delivery and performance by the Trust of this Agreement, the
consummation by the Trust of the transactions contemplated hereby and
compliance by the Trust with its obligations hereunder do not violate (a)
any of the provisions of the Certificate of Trust of the Trust or the Trust
Agreement, or (b) any applicable Delaware law or administrative regulation;
(ix) Assuming that the Trust derives no income from or
connected with sources within the State of Delaware and has no assets,
activities (other than having a Delaware trustee as required by the
Delaware Act and the filing of documents with the Secretary of State of the
State of Delaware) or employees in the State of Delaware, no authorization,
approval, consent or order of any Delaware court or Delaware governmental
authority or Delaware agency is required to be obtained by the Trust solely
in connection with the issuance and sale of the Securities; and
(x) Assuming that the Trust derives no income from or
connected with sources within the State of Delaware and has no assets,
activities (other than having a Delaware trustee as required by the
Delaware Act and the filing of documents with the Secretary of State of the
State of Delaware) or employees in the State of Delaware, and assuming that
the Trust is treated as a grantor trust or partnership for federal income
tax purposes, the Securityholders (other than those Securityholders who
reside or are domiciled in the State of Delaware) will have no liability
for income taxes imposed by the State of Delaware solely as a result of
their participation in the Trust, and the Trust will not be liable for any
income tax imposed by the State of Delaware (in rendering the opinion
expressed in this paragraph (e), such counsel need express no opinion
concerning the securities laws of the State of Delaware);
(f) On the Closing Date, the Representative shall have received the
favorable opinion of Reid & Priest LLP, counsel for the several
Underwriters, dated as of such date, satisfactory in form, scope and
substance to the
24
<PAGE>
Representative with respect to the sufficiency of all corporate proceedings
and other legal matters relating to the Securities, the form of the
Registration Statement and the Prospectus, and as to the execution and
authorization of this Agreement and the transactions contemplated hereby as
the Representative may reasonably require, and the Company shall have
furnished to such counsel such documents as they may have requested for the
purpose of enabling them to pass upon such matters. In rendering such
opinion, Reid & Priest LLP may rely as to certain matters of Delaware law
relating to the Trust, the Securities and the Trust Agreement upon the
opinion of Richards, Layton & Finger, P.A., special Delaware counsel for
the Trust and the Company, which shall be delivered in accordance with
Section 5(e) hereto, and as to matters governed by Delaware, Maryland, New
Jersey, Ohio, Pennsylvania, Virginia and West Virginia law upon the opinion
of Dale G. Stoodley, General Counsel for the Company, who may in turn rely
upon the opinions of other counsel as to certain legal conclusions affected
by the laws of Maryland, New Jersey, Ohio, Pennsylvania, Virginia and West
Virginia.
(g) On the Closing Date, the Representative shall have received the
letter of Coopers & Lybrand L.L.P., dated as of such date, to the effect
set forth in Schedule III annexed hereto and with respect to such other
matters as to which the Representative shall have inquired.
(h) On the Closing Date, the Representative shall have received
certificates, dated as of such date, of the President or a Vice President
or the principal accounting officer of the Company and a Trustee, on behalf
of the Trust, respectively, to the effect that, to the best of his or her
knowledge based on a reasonable investigation:
(i) the representations and warranties of the Trust or the
Company, as the case may be, in this Agreement are true and correct, as
though made on and as of the Closing Date, and the Trust or the Company, as
the case may be, has complied with all the agreements and satisfied all the
conditions required by this Agreement to be performed or satisfied by the
Trust or the Company, as the case may be, on or prior to the Closing Date;
and
(ii) he or she has examined the Registration Statement and the
Prospectus, and, in his or her opinion, the Registration Statement, when it
became effective and at all times subsequent thereto up to and including
the Closing Date, did not and does not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements
25
<PAGE>
therein not misleading, and the Prospectus, when the Prospectus Supplement
was filed with the Commission and at all times subsequent thereto up to and
including the Closing Date, did not and does not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and, since
the effective date of the Registration Statement, there has occurred no
event required to be set forth in an amended Registration Statement or a
supplemented Prospectus which had not been so set forth.
All the opinions, letters, certificates and documents mentioned above
or elsewhere in this Agreement will be in compliance with the provisions hereof
only if they are reasonably satisfactory to Reid & Priest LLP. The Company will
furnish the Representative with such conformed copies of such opinions, letters,
certificates and documents as the Representative may reasonably request.
If any condition to the Underwriters' obligations hereunder to be
satisfied on or prior to the Closing Date is not so satisfied, the
Representative may terminate this Agreement without liability on the part of any
Underwriter or the Company, except for the expenses to be paid or reimbursed by
the Company pursuant to Section 4(e) and except for any liability under Section
7 hereof.
6. Termination of Agreement. (a) The Representative, by notice to
------------------------
the Company, may terminate this Agreement, at any time after the date of this
Agreement and on or prior to the Closing Date, if during such period (i) trading
on the New York Stock Exchange or the American Stock Exchange shall have been
wholly suspended, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required, on
the New York Stock Exchange or the American Stock Exchange, by the New York
Stock Exchange or the American Stock Exchange or by order of the Commission or
any other governmental authority having jurisdiction, or trading of the
Company's securities on any exchange or in any over-the-counter market shall
have been suspended, or (ii) a banking moratorium shall have been declared by
Federal or New York authorities, or (iii) an outbreak of hostilities or an
escalation thereof, a declaration of war by Congress, another substantial
calamity or crisis or another event or occurrence of a similar character which,
in the Representative's reasonable judgment, makes it impracticable or
inadvisable to proceed with the completion of the sale of and payment for the
Securities, or to enforce contracts for the sale of the Securities shall have
occurred, or (iv) the Trust or the
26
<PAGE>
Company shall have sustained a substantial loss by fire, flood, accident or
other calamity which in the Representative's reasonable judgment renders it
inadvisable to consummate the sale of the Securities to, and the delivery of the
Securities by, the several Underwriters, regardless of whether or not such loss
shall have been insured. This Agreement may also be terminated at any time
prior to the Closing Date if, in the reasonable judgment of the Representative,
the subject matter of any amendment or supplement to the Registration Statement
or the Prospectus renders it either inadvisable to proceed with such offering or
inadvisable to proceed with the delivery of the Securities to be purchased
hereunder.
(b) In the event of the termination pursuant to this Section, the
Company shall not be under any liability to any Underwriter, except for the
expenses to be paid by it pursuant to the provisions of Section 4(e) and except
for any liability under Section 7, nor shall any Underwriter be under any
liability to the Company, except for any liability under Section 7.
(c) If the Representative elects to terminate this Agreement as
provided in this Section, the Company shall be notified promptly by the
Representative by telephone, confirmed in writing.
7. Indemnification. (a) The Trust and the Company, jointly and
---------------
severally, will indemnify and hold harmless each Underwriter and each person, if
any, who controls such Underwriter within the meaning of the Act against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject, under the Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or allegedly untrue statement of any material fact contained in
the Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and will reimburse
each Underwriter and each such controlling person for any legal or other
expenses reasonably incurred by such Underwriter or such controlling person in
connection with in vestigation or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
neither the Trust nor the Company will be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or allegedly untrue statement or omission or alleged omission
made in the Registration Statement, any preliminary prospectus, or the Pro-
27
<PAGE>
spectus, or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which the Trust or the Company may otherwise
have.
(b) Each Underwriter will indemnify and hold harmless the Trust and
the Company, each of their directors, each of their officers who has signed the
Registration Statement, and each person, if any, who controls the Trust or the
Company within the meaning of the Act, against any losses, claims, damages or
liabilities, joint or several, to which the Trust or the Company or any such
director, officer or controlling person may become subject, under the Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or allegedly untrue statement of any material fact contained in
the Registration Statement, any preliminary prospectus, or the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or allegedly untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Trust or the Company by
such Underwriter specifically for use in the preparation thereof; and will
reimburse the Trust and the Company for any legal or other expenses reasonably
incurred by the Company or any such director, officer or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred. This indemnity agreement
will be in addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section. In case any such action is brought against any indemnified party, and
it notifies an indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in, and, to the extent that it may wish,
jointly with any other indemnifying party, similarly notified, (except in the
circumstances set forth in clause (i) and (ii) of this sentence) to assume the
defense
28
<PAGE>
thereof, with counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless, (i) the employment
of additional counsel has been authorized in writing by the indemnifying party
in connection with defending such action, or (ii) representation of both the
indemnifying party and the indemnified party by the same counsel is
inappropriate by applicable standards of professional conduct for attorneys in
the jurisdiction where suit is instituted due to actual or potential conflicting
interests between them (it being understood that the indemnifying party shall
not be liable for the expense of more than one separate counsel (in addition to
local counsel) representing the indemnified parties in such action). No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) No indemnity by the Trust or the Company hereunder shall apply in
respect of (i) any preliminary prospectus furnished to a person to whom any of
the Securities are sold unless a copy of the Prospectus is furnished by an
Underwriter or securities dealer to such person at or prior to the furnishing of
the written confirmation of such sale or mailed to such person with such
confirmation or (ii) any preliminary prospectus or Prospectus used by an
Underwriter or securities dealer after the same has been superseded by an
amended or supplemented preliminary prospectus or Prospectus supplied by the
Trust or the Company to the Representative for the use of the Underwriters and
securities dealers. As used in this Section 9, the terms "preliminary
prospectus" and "Prospectus" do not include any documents incorporated by
reference thereto.
(e) If the indemnification provided for in subparagraph (a) or (b)
above should not be available to an indemnified party in respect of any losses,
claims, damages, liabilities and expenses referred to therein, then the
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and expenses in such proportion as
is appropriate to reflect the relative benefits received by the indemnifying
party on the one hand and such indemnified party on
29
<PAGE>
the other from the offering of the Securities, and also the relative fault of
the indemnifying party on the one hand and such indemnified party on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities and expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Trust, the
Company and the Underwriters shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Trust and the Company bears to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault of the Trust, the Company and
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the Trust,
the Company or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(f) The parties hereto agree that it would not be just and equitable
if contribution were to be determined by pro rata allocation (even if the
Underwriters were to be treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
action or claim (which shall be limited as provided in subparagraph (c) above if
the indemnifying party shall have assumed the defense of any such action in
accordance with the provisions thereof). No person guilty of fraudulent
misrepresentation shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(g) The Company agrees to indemnify and hold harmless the Trust from
and against any and all losses, claims, damages and liabilities whatsoever, as
due from the Trust under this Section.
8. Representations and Indemnities to Survive. All representations
------------------------------------------
and warranties of the Trust and the Company contained herein and in the
certificate or certificates delivered pursuant to Section 5(h) and the indemnity
agreements contained in Section 7 shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or controlling person, or by or on behalf of the Trust and the Company or any
officer, director or controlling person, and shall survive delivery of and
payment for the
30
<PAGE>
Securities and, in the case of the indemnity agreements contained in Section 7,
any termination of this Agreement.
9. Notices. All communications hereunder shall be in writing and if
-------
sent to the Underwriters shall be mailed, delivered or transmitted by facsimile
and confirmed to the Representative at the address set forth in Schedule I
hereto, or if sent to the Trust or the Company shall be mailed, delivered or
transmitted by facsimile and confirmed to it, c/o Senior Vice President,
Treasurer and Chief Financial Officer, 800 King Street, P.O. Box 231,
Wilmington, Delaware 19899, facsimile no. (302) 429-3367. Any such address may
be changed from time to time by notice as aforesaid.
10. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon the several Underwriters, the Trust and the Company and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person or corporation,
other than the parties hereto, their respective successors and assigns and the
controlling persons, officers and directors referred to in Section 7, any legal
or equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained; this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of the
parties hereto, their respective successors and assigns and said controlling
persons, officers and directors, and for the benefit of no other person or
corporation. No purchaser of any of the Securities through or from any
Underwriter shall be construed a successor or assign by reason merely of such
purchase.
11. Underwriters Not Agents of the Company. Nothing herein contained
--------------------------------------
shall constitute the Underwriters, or any of them, agents or representatives of
the Trust or the Company, or authorize them to act for or on behalf of the Trust
or the Company in any capacity.
12. Controlling Law. Although the place of performance of certain
---------------
obligations under this Agreement is stated to be outside of Delaware, it is the
express intention of the parties hereto that this Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to choice of laws principles.
31
<PAGE>
If the foregoing correctly sets forth the understanding among the
Trust, the Company and the Underwriters, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among the Trust, the Company and the Underwriters severally.
Very truly yours,
DELMARVA POWER FINANCING I
By______________________________
Title:
DELMARVA POWER & LIGHT COMPANY
By______________________________
Title:
ACCEPTED as of the date first
above written, as Underwriters
and as Representatives of the
other Underwriters named in
Schedule II.
[Insert name of Representative]
By:
By_____________________________
Title:
32
<PAGE>
SCHEDULE I
----------
Underwriting Agreement dated _______ __, 199_
Registration Statement No. 333-________ and 333-________
Representatives and Address:
SECURITIES:
DESIGNATION: ___% Trust Preferred Capital Securities (Liquidation
preference $25.00 per Preferred Security)
AMOUNT OF SECURITIES: $
AMOUNT OF COMMON SECURITIES: $
PURCHASE PRICE PER PREFERRED SECURITY: $
PUBLIC OFFERING PRICE PER PREFERRED SECURITY: $
CONCESSION PER PREFERRED SECURITY: $
REALLOWANCE PER PREFERRED SECURITY: $
CLOSING DATE, TIME AND LOCATION:
33
<PAGE>
SCHEDULE II
-----------
Underwriter Number of Securities
----------- --------------------
____________
Total.................................................
============
34
<PAGE>
SCHEDULE III
------------
(i) They are independent public accountants with the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements of the
Company and subsidiary companies ("Companies") examined by them and incorporated
by reference in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act and the Exchange
Act and the published rules and regulations thereunder;
(iii) On the basis of procedures performed specified by the American
Institute of Public Accountants for a review of interim financial information as
described in SAS No. 71 (but not an examination in accordance with generally
accepted auditing standards) on the unaudited interim consolidated financial
statements of the Company as set forth in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus, if any, a reading of the
latest available unaudited interim consolidated financial statements, if any, of
the Company subsequent to the financial statements incorporated by reference in
the Prospectus and the minutes of meetings of the Board of Directors and
stockholders of the Company and inquiries of officers and other employees of the
Company responsible for accounting matters and other specified procedures,
nothing has come to their attention which causes them to believe that (A) the
unaudited consolidated financial statements incorporated by reference in the
Prospectus, if any, do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act as it applies to Form 10-
Q and the related published rules and regulations thereunder or that any
material modifications should be made to such unaudited consolidated financial
statements for them to be in conformity with generally accepted accounting
principles; (B) the unaudited interim consolidated financial statements, if any,
for periods subsequent to the financial statements incorporated by reference in
the Prospectus are not fairly stated on a basis substantially consistent with
that of the audited consolidated financial statements; (C) at a specified date
not more than three days prior to the date of such letter, there was any change
in the capital stock of the Companies or in their long-term debt, any increase
in their short-term debt or any decrease in their consolidated net assets, in
each case as compared with amounts shown in their most recent unaudited interim
consolidated balance
<PAGE>
- 2 -
sheet incorporated by reference in the Prospectus; or (D) for the period from
the date of the most recent audited or unaudited consolidated financial
statements incorporated by reference in the Prospectus to a subsequent date not
more than three days prior to the date of such letter, there were any decreases,
as compared with the corresponding period in the preceding year, in consolidated
operating revenues, operating income, net income earnings applicable to common
stock and earnings per average share of common stock of the Company; except in
all instances for changes or decreases which the Prospectus discloses have
occurred or may occur or which (i) are described in such letter and (ii) as so
described, are determined by the Representative in its discretion, not to be
material; and
(iv) They have compared the dollar amounts (or percentages derived
from such dollar amounts), ratios and other financial information as agreed upon
contained in (A) the Prospectus, (B) the Company's latest Annual Report on Form
10-K incorporated by reference into the Prospectus, and (C) the Company's latest
Quarterly Report on Form 10-Q incorporated by reference into the Prospectus (in
each case to the extent that such dollar amounts, percentages, ratios and other
financial information are derived from the general accounting records of the
Company subject to the internal controls of the Company's accounting system, or
are derived directly from such records by analysis or computation) with the
results obtained from inquiries, a reading of such general accounting records
and other procedures specified in such letter, and have found such dollar
amounts, percentages, ratios and other financial information to be in agreement
with such results except as otherwise specified in such letter.
<PAGE>
Exhibit 3-D
CERTIFICATE OF AMENDMENT
OF RESTATED CERTIFICATE AND ARTICLES OF INCORPORATION
OF
DELMARVA POWER & LIGHT COMPANY
(Pursuant to Section 242 of the
General Corporation Law of the State of Delaware)
Delmarva Power & Light Company, a Delaware and Virginia corporation (the
"Company"), DOES HEREBY CERTIFY:
FIRST: That the Company's Restated Certificate and Articles of
Incorporation, as amended (the "Charter"), be, and it hereby is, amended to
delete paragraph (2) under Article FOURTH, Section 9(b) thereof, and
renumbering paragraph (3) thereunder to paragraph (2), such that Article
FOURTH, Section 9(b) of the Charter reads in its entirety as set forth on
Exhibit A hereto, which is incorporated herein by reference (the
"Amendment").
SECOND: That the Amendment was duly adopted by the Board of Directors
of the Company in accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware.
THIRD: That the Amendment was duly adopted by the stockholders of the
Company in accordance with Section 242 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Certificate to be signed by
its President and attested by its Secretary as of the 3rd day of June, 1996.
DELMARVA POWER & LIGHT COMPANY
By: /s/ H. E. COSGROVE
-----------------------------------------
H. E. Cosgrove
Chairman of the Board, President and
Chief Executive Officer
ATTEST:
By: /s/ D. P. CONNELLY
-------------------------
Donald P. Connelly
Secretary
<PAGE>
EXHIBIT A
---------
(b) So long as any shares of the Preferred Stock or Preferred Stock--$25
Par of any series are outstanding, the Company shall not, without the consent
(given by vote at a meeting called for that purpose in accordance with the
provisions of paragraph A.13. hereof) of the holders of at least a majority of
the total voting power of the outstanding Preferred Stock and Preferred Stock--
$25 Par of all series, voting as a single class:
(1) Increase the total authorized number of shares of the Preferred
Stock or Preferred Stock--$25 Par; or
(2) Merge or consolidate with or into any other corporation or sell or
otherwise dispose of all or substantially all of the Company's assets;
provided that the provisions of this subparagraph shall not apply to a
purchase or other acquisition by the Company of franchises or assets of
another corporation in any manner which does not involve a statutory merger
or consolidation, or to a merger or consolidation pursuant to which none of
the rights or preferences of the holders of the Preferred Stock and
Preferred Stock--$25 Par will be adversely affected and the company
resulting therefrom will have outstanding immediately after such merger or
consolidation no additional class of stock ranking prior to or equally with
the Preferred Stock or Preferred Stock--$25 Par with respect to payment of
dividends or to distribution on liquidation or dissolution.
A-1
<PAGE>
Exhibit 3-E
ARTICLES OF AMENDMENT
OF RESTATED CERTIFICATE AND ARTICLES OF INCORPORATION
OF
DELMARVA POWER & LIGHT COMPANY
(Pursuant to Sections 13.1-707 and 13.1-710
of the Code of Virginia)
FIRST: The name of the corporation is Delmarva Power & Light Company (the
"Company"). The Company, a Delaware and Virginia corporation, does hereby
execute these Articles of Amendment to effect an amendment to its Restated
Certificate and Articles of Incorporation, as amended (the "Charter").
SECOND: The Charter hereby is amended to delete paragraph (2) under
Article FOURTH, Section 9(b) thereof, and renumber paragraph (3) thereunder to
paragraph (2), such that Article FOURTH, Section 9(b) of the Charter reads in
its entirety as set forth on Exhibit A hereto, which is incorporated herein by
reference (the "Amendment").
THIRD: The Amendment was adopted by the stockholders of the Company at
the Company's Annual Meeting of Stockholders held on May 30, 1996 (the "Annual
Meeting").
FOURTH: The Amendment was proposed by the Board of Directors and submitted
to the stockholders of the Company in accordance with Section 13.1-707 of the
Code of Virginia.
FIFTH: The holders of the Common Stock, voting as one voting group, and
the Preferred Stock--$100 Par Value and the Preferred Stock--$25 Par Value,
voting together as one voting group, were entitled to vote on the Amendment. On
the record date for the Annual Meeting, there were outstanding 60,754,568 shares
of Common Stock, all of which were entitled to one vote per share on the
Amendment; 1,280,850 shares of Preferred Stock--$100 Par Value, all of which
were entitled to one vote per share on the Amendment; and 1,600,000 shares of
Preferred Stock--$25 Par Value, all of which were entitled to one-quarter vote
per share on the Amendment. Adding the
<PAGE>
number of votes for the Preferred Stock--$100 Par Value to the number of votes
for the Preferred Stock--$25 Par Value, the Preferred Stock voting group had, on
the record date for the Annual Meeting, 1,680,850 votes eligible to be cast for
the Amendment.
SIXTH: The holders of the shares of Common Stock cast 39,151,942
undisputed votes for the Amendment and the holders of the shares of Preferred
Stock--$100 Par Value and Preferred Stock--$25 Par Value, voting as a single
voting group, cast 873,000 undisputed votes for the Amendment. The number of
votes cast for the Amendment by each voting group was sufficient for approval by
that voting group.
SEVENTH: The effective date of these Articles of Amendment, and the date
upon which the Amendment shall become effective, shall be June 7, 1996.
IN WITNESS WHEREOF, these Articles of Amendment are hereby signed on this
3rd day of June, 1996, in the name and on behalf of Delmarva Power & Light
Company by its Chairman of the Board, President and Chief Executive Officer.
DELMARVA POWER & LIGHT COMPANY
By: /s/ H. E. COSGROVE
-----------------------------
H. E. Cosgrove
Chairman of the Board, President and
Chief Executive Officer
ATTEST:
By: /s/ D. P. CONNELLY
----------------------------
Donald P. Connelly
Secretary
-2-
<PAGE>
STATE OF DELAWARE )
) ss.
COUNTY OF NEW CASTLE )
On this 3rd day of June, 1996, personally came before me, the subscriber, a
Notary Public in and for the state and county aforesaid, H. E. Cosgrove,
Chairman of the Board, President and Chief Executive Officer of Delmarva Power &
Light Company, a corporation existing under the laws of the State of Delaware
and the Commonwealth of Virginia, party to this Certificate, known to me
personally to be such, and acknowledged these Articles of Amendment to be his
act and deed and the act and deed of Delmarva Power & Light Company, that the
signature of such officer is in his own proper handwriting, and that the facts
set forth therein are true and correct to the best of his knowledge, information
and belief.
SUBSCRIBED AND SWORN before me this 3rd day of June, 1996.
/s/JOSEPHINE S. GRAVES
-------------------------------
Notary Public
My Commission Expires: 2/6/98
- - --
-3-
<PAGE>
EXHIBIT A
---------
(b) So long as any shares of the Preferred Stock or Preferred Stock--$25
Par of any series are outstanding, the Company shall not, without the consent
(given by vote at a meeting called for that purpose in accordance with the
provisions of paragraph A.13. hereof) of the holders of at least a majority of
the total voting power of the outstanding Preferred Stock and Preferred Stock--
$25 Par of all series, voting as a single class:
(1) Increase the total authorized number of shares of the Preferred
Stock or Preferred Stock--$25 Par; or
(2) Merge or consolidate with or into any other corporation or sell or
otherwise dispose of all or substantially all of the Company's assets;
provided that the provisions of this subparagraph shall not apply to a
purchase or other acquisition by the Company of franchises or assets of
another corporation in any manner which does not involve a statutory merger
or consolidation, or to a merger or consolidation pursuant to which none of
the rights or preferences of the holders of the Preferred Stock and
Preferred Stock--$25 Par will be adversely affected and the company
resulting therefrom will have outstanding immediately after such merger or
consolidation no additional class of stock ranking prior to or equally with
the Preferred Stock or Preferred Stock--$25 Par with respect to payment of
dividends or to distribution on liquidation or dissolution.
A-1
<PAGE>
EXHIBIT 3.F
DELMARVA POWER
&
LIGHT COMPANY
BY-LAWS
As amended February 29, 1996
<PAGE>
DELMARVA POWER & LIGHT COMPANY
BY-LAWS
ARTICLE I
Offices
Section 1. The principal office of the Company in the State of Delaware
shall be at 800 King Street in the City of Wilmington and County of New Castle.
The Company may also have offices at such other places as the Board of Directors
may from time to time determine.
ARTICLE II
Meetings of Stockholders
Section 1. The Annual Meeting of the stockholders of the Company shall be
held for the purpose of electing directors and for the transaction of only such
business as is properly brought before the meeting in accordance with the
By-Laws. The Annual Meeting shall take place at such time and location as
determined by resolution of the Board of Directors on the last Thursday of May
in each year, unless such day is a legal holiday, in which case it shall be held
on the first day thereafter which is not a legal holiday, and on any subsequent
day or days to which such meeting may be adjourned. In case the Annual Meeting
of Stockholders should not be held on the day fixed therefor, or should be
finally adjourned without completing the election of directors, such election
may be held subsequently at a special stockholders' meeting, called as
hereinafter provided. The time and place for said annual meeting shall be set at
least sixty (60) days prior to the date of each annual meeting. A notice of the
time and place shall be given to each stockholder entitled to vote at least
twenty (20) days before the date of the meeting, in person or by letter mailed
to his last known post office address.
To be properly brought before the Annual Meeting, business must be either (a)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the Board, or (b) otherwise properly brought before the meeting
by or at the direction of the Board, or (c) otherwise properly brought before
the meeting by a stockholder. In addition to any other applicable requirements,
for business to be properly brought before an annual meeting by a stockholder,
the stockholder must have given timely notice thereof in writing to the
Secretary of the Company. To be timely, a stockholder's notice must be
<PAGE>
2
delivered to or mailed and received at the principal executive offices of the
Company, not less than fifty (50) days nor more than seventy-five (75) days
prior to the meeting; provided, however, that in the event that less than sixty-
five (65) days' notice or prior public disclosure of the date of the meeting is
given or made to stockholders, notice by the stockholder to be timely must be
so received not later than the close of business on the fifteenth (15th) day
following the day on which such notice of the date of the Annual Meeting was
mailed or such public disclosure was made, whichever first occurs. A
stockholder's notice to the secretary shall set forth as to each matter the
stockholder proposes to bring before the Annual Meeting (i) a brief description
of the business desired to be brought before the Annual Meeting and the
reasons for conducting such business at the Annual Meeting, (ii) the name and
record address of the stockholder proposing such business, (iii) the class and
number of shares of the Company which are beneficially owned by the
stockholder, and (iv) any material interest of the stockholder in such business.
No business shall be conducted at the Annual Meeting except in accordance
with the procedures set forth in this Article I, provided, however, that nothing
in this Article I shall be deemed to preclude discussion by any stockholder of
any business properly brought before the annual meeting.
The Chairman/Chairwoman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the foregoing procedures, and if he/she
should so determine, he/she shall so declare to the meeting and any such
business not properly brought before the meeting shall not be transacted.
Section 2. The directors shall be divided into three classes, designated
Class I, Class II, and Class III. Each Class shall consist, as nearly as may be
possible, of one-third of the total number of Directors constituting the entire
Board of Directors. At each Annual Meeting of stockholders, successors to the
class of directors whose term expires at the Annual Meeting shall be elected for
a three-year term. If the number of directors is changed, any increase or
decrease shall be apportioned among the classes so as to maintain the number of
directors in each class as nearly as possible, but in no case will a decrease in
the number of directors shorten the term of any incumbent director. A director
shall hold office until the Annual Meeting for the year in which his or her term
expires and until his or her successor shall be elected and shall qualify,
subject, however, to prior death, resignation, retirement, disqualification or
removal from office.
<PAGE>
3
Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors. Nominations of persons
for election to the Board of Directors of the Company may be made at a meeting
of stockholders by the Board of Directors, at the direction of the Board by any
nominating committee or person appointed by the Board, or by any stockholder of
the Company entitled to vote for the election of Directors at the meeting who
complies with the notice procedures set forth in this Section 2. Such
nominations, other than those made by or at the direction of the Board, shall be
made pursuant to timely notice in writing to the Secretary of the Company. To
be timely, a stockholder's notice shall be delivered to or mailed and received
at the principal executive offices of the Company not less than fifty (50) days
nor more than ninety (90) days prior to the meeting; provided, however, that in
the event that less than sixty-five (65) days' notice or prior public disclosure
of the date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be so received not later than the close of
business on the fifteenth (15th) day following the day on which such notice of
the date of the meeting was mailed or such public disclosure was made, whichever
first occurs. Such stockholder's notice to the Secretary shall set forth (a) as
to each person whom the stockholder proposes to nominate for election or
re-election as a director, (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class and number of shares of capital stock of the Company
which are beneficially owned by the person and (iv) any other information
relating to the person that is required to be disclosed in solicitations for
proxies for election of directors pursuant to Rule 14A under the Securities
Exchange Act of 1934, as amended; and (b) as to the stockholder giving the
notice (i) the name and record address of such stockholder and (ii) the class
and number of shares of capital stock of the Company which are beneficially
owned by such stockholder. The Company may require any proposed nominee to
furnish such other information as may reasonably be required by the Company to
determine the eligibility of such proposed nominee to serve as a director of the
Company. No person shall be eligible for election as a director of the Company
unless nominated in accordance with the procedures set forth herein.
The Chairman/Chairwoman of the meeting shall, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure and if he/she should so determine,
he/she shall so declare to the meeting and the defective nomination shall be
disregarded.
<PAGE>
4
Section 3. At each Annual Meeting of the stockholders of the Company,
independent public accountants shall be appointed by vote of the holders of
shares of the Common Stock, to audit the accounts and records of the Company and
its subsidiaries and to report on the financial statements for the current
fiscal year.
Section 4. At least ten (10) days before every election a complete list
of stockholders entitled to vote, arranged in alphabetical order, shall be
prepared and shall be open at the place where said election is to be held and at
the Company's principal place of business for said ten (10) days to the
inspection of any stockholder, and shall be produced and kept at the time and
place of election during the whole time thereof and subject to the inspection of
any stockholder who may be present.
Section 5. Except as otherwise required by law, a representation of at
least a majority of the outstanding capital stock of the Company issued and
entitled to vote shall constitute a quorum requisite for the transaction of
business at all meetings of the stockholders; less than such quorum, however,
shall have power to adjourn any meeting from time to time without notice.
Section 6. Each stockholder of record having the right to vote at
meetings shall be entitled to one vote for each share of stock standing in his
name upon the books of the Company, to be voted by the stockholder in person, or
by duly authorized proxy or attorney. The record date for determining
stockholders entitled to vote shall be fixed under the provisions of Section 3
of Article XIV hereof, provided that if the transfer books are not closed and no
record date is fixed, the date on which the notice of the meeting is given, as
provided for in Section 9 of this Article II, shall be the record date for
determining stockholders entitled to vote. No authority as proxy or attorney
shall be valid unless executed in writing and dated not more than eleven (11)
months prior to the meeting at which it is to be used, except as otherwise
provided by law.
Section 7. All questions shall be decided by vote of a majority of the
stock present or represented and entitled to vote, unless otherwise especially
provided by law.
Section 8. Special meetings of the stockholders may be held outside the
State of Delaware and may be called by the Chairman/Chairwoman, the President,
or the Board of Directors.
<PAGE>
5
Section 9. In addition to any notice which may be required by law,
notice of the Annual Meeting for the election of directors and of all special
meetings of the stockholders shall be given by delivering or sending by mail
written or printed notice thereof, stating the object of such meeting, to each
stockholder appearing as such on the books of the Company and entitled to vote
at such meeting, and in case of mailing, at the address given on such books, at
least ten (10) days prior to an annual meeting or a special meeting; but
meetings may be held without notice if all stockholders are present in person or
represented by proxy or if notice is waived, whether before or after the time
stated therein, by those not present in person or represented by proxy. Except
as required by statute, no notice need be given of any adjourned meeting of
stockholders.
Section 10. At each meeting of the stockholders the polls shall be
opened and closed and the proxies and ballots shall be received and taken in
charge of and all questions touching on the qualifications of voters and the
validity of proxies and the acceptance and rejection of votes shall be decided
by two (2) Inspectors of Election. The Inspectors of Election shall also, if so
directed by the presiding officer of the meeting, decide and report upon the
presence of a quorum. Such Inspectors of Election shall be appointed by the
Board of Directors before or at the meeting, and if no such appointment shall
have been made, then by the presiding officer of the meeting. If for any reason
any of the Inspectors of Election previously appointed shall fail to attend or
refuse or be unable to serve, Inspectors of Election in place of any so failing
to attend or refusing or unable to serve shall be appointed either by the Board
of Directors or by the presiding officer of the meeting. No Inspector of
Election shall enter on the duties of his office or appointment until he takes
and subscribes an oath or affirmation before some person qualified by law to
administer oaths that he will faithfully, honestly, and impartially perform his
duties as an Inspector of Election to the best of this skill and ability.
Section 11. Article 14.1 of the Virginia Stock Corporation Act does not
apply to acquisitions of shares of stock of the Company.
ARTICLE III
Directors and Officers
Section 1. The business and affairs of the Company shall be managed
under the direction of a Board of Directors consisting of not less than
three (3) nor more than fifteen (15) directors, the exact number of directors
to be determined from time to time by resolution adopted by the affirmative
vote of a majority of the directors then in office or two-thirds of the
shares, represented by proxy or in person, entitled to vote and a meeting at
which a quorum is present.
<PAGE>
6
Section 2. Any director of the Company may resign at any time by giving
written notice to the President or the Secretary of the Company. Such
resignation shall take effect at the time specified therein; and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 3. The officers shall be a Chairman/Chairwoman of the Board, a
President, one or more Vice Presidents, a Secretary and one or more Assistant
Secretaries, a Treasurer and one or more Assistant Treasurers, one or more
Comptrollers and one or more Assistant Comptrollers and such other officers as
the Board of Directors may from time to time deem necessary. One person may hold
more than one office, except that the same person shall not be President and a
Vice President, or President and Secretary, or President and Treasurer.
ARTICLE IV
Powers and Duties of Directors
Section 1. The Board of Directors shall choose the Chairman/Chairwoman of
the Board and the President from among their number. Vacancies in the Board,
except those caused by an increase in the number of directors authorized by more
than two (2), may be filled by a majority of the then members of the Board of
Directors, though less than a quorum.
Section 2. The Board of Directors shall elect the Vice Presidents, a
Secretary, a Treasurer, one or more Comptrollers, one or more Assistant
Secretaries, one or more Assistant Treasurers, and one or more Assistant
Comptrollers and shall have the power to constitute and appoint such other
officers as may be found necessary and the interests of the Company may require
and to fix, or delegate the power to fix, the compensation and define the duties
of all such officers.
Section 3. All the officers of the Company shall be subject to the orders
of the Board and may be removed by the Board at discretion.
Section 4. The Board of Directors may appoint from among its members an
Executive Committee by vote of a majority of the number of the directors fixed
by these By-Laws. A majority of the Committee shall be necessary to constitute a
quorum for the transaction of business. Regular meetings of the Committee may
be held on such days, and at such times as may be determined by a majority vote
of its members. Additional meetings shall be held as the Chairman/Chairwoman of
the Committee, or any two (2) members thereof shall from time to time call.
Except as otherwise provided by law, the
<PAGE>
7
Committee shall have power to consider and decide upon all questions
concerning the management and the affairs of the Company, including all
proposed liabilities, expenditures and contracts, together with such other
business as may be submitted to it from time to time by the officers of the
Company between meetings of the Board of Directors, and such business shall
be finally disposed of by the Committee; provided, however, that the Committee
shall preserve minutes of its meetings, which shall be submitted to the Board of
Directors at its regular meetings; and provided that the Committee shall have no
power or authority to amend the Certificate of Incorporation or By-Laws, to
adopt an agreement of merger, exchange or consolidation, to sell, lease, pledge
or exchange all or substantially all of the Company's assets, to adopt or revoke
a plan of dissolution, or, unless the Board expressly so provides by
resolutions, to declare a dividend or issue stock.
ARTICLE V
Meetings of Directors
Section 1. The Board of Directors shall at the next regular meeting
following the Annual Meeting of the stockholders, or at a special meeting called
for that purpose, elect and appoint officers to serve for the ensuing year, and
may transact such other business as may properly come before the meeting.
Section 2. All other regular meetings of the Board of Directors shall be
held at such time and place as shall be from time to time determined by
resolution of the Board of Directors. Notice shall not be required by any
regular meeting of the Board of Directors.
Section 3. Special meetings of the Board of Directors may be held at any
place upon the call of the Chairman/Chairwoman of the Board or the President.
The Secretary shall also call such meetings on written request of two (2)
directors.
Section 4. Any meeting of the Board of Directors may be held outside of the
State of Delaware.
Section 5. A written or printed notice of all special meetings of the Board
of Directors, delivered personally or mailed or telegraphed on or before the
second day preceding the date of meeting, addressed to a director at his/her
usual place of residence or such other place as he/she may designate, shall be
sufficient notice of such meetings. No notice shall be required to any director
<PAGE>
8
who shall be personally present at any meeting or who shall waive notice,
whether before or after the time stated therein. A meeting may be held at any
time when all of the Directors are present.
Section 6. A quorum of the Board competent to transact business shall
consist of the smallest number of directors necessary to constitute a majority
of the full Board. Less than a quorum may adjourn from time to time without
notice.
Section 7. All questions shall be decided by vote of a majority of the
Directors present, unless otherwise specifically provided by law or by these
By-Laws. The yeas and nays on any question shall be taken and recorded on the
minutes at the request of any Director.
ARTICLE VI
Chairman/Chairwoman of the Board
Section 1. The Chairman/Chairwoman of the Board shall, when present,
preside at all meetings of the Directors and of the stockholders. He/She shall
also generally have the power and perform the duties which by law and general
usage appertain to the office. He/She shall be the chief executive officer of
the Company and have charge of its business and affairs when so designated by
resolution of the Board of Directors.
ARTICLE VII
President
Section 1. The President shall be the chief operating officer of the
Company and shall direct the ordinary business operations of the Company. He/She
shall also be the chief executive officer of the Company and have charge of its
business and affairs unless the Board of Directors has by resolution designated
the Chairman/Chairwoman of the Board to be chief executive officer. He/She
shall, when present, in the absence of the Chairman/Chairwoman of the Board,
preside at all meetings of the Directors and of the stockholders. He/She shall
affix the corporate seal of the Company to instruments required by law, these
By-Laws, or by resolution of the Board of Directors to have the seal affixed by
the President. He/She shall sign certificates of stock and obligations, and
shall execute contracts and other instruments in behalf of the corporation
except as otherwise provided for by the Board of Directors. The President shall
also generally have the powers and perform the
<PAGE>
9
duties which by law and general usage appertain to the office. He/She shall
employ, or delegate the power to employ, such agents, managers and employees as
may be necessary and the interest of the Company may require and shall fix, or
delegate the power to fix, the compensation and define, or delegate the power to
define, the duties of all such agents, managers and employees.
ARTICLE VIII
Vice President
Section 1. A Vice President shall in the absence or disability or at the
request of the President, perform the duties of the President, and perform such
other duties as shall, from time to time, be imposed upon him/her by the Board.
The performance of any such duty by a Vice President shall be conclusive
evidence of his/her right to act.
ARTICLE IX
Secretary
Section 1. The Secretary shall keep, in proper books provided for that
purpose, a record of all meetings and proceedings of the Board of Directors, and
also the minutes of the stockholders' meeting. He/She shall record all votes of
the corporation. He/She shall carefully preserve and keep in his custody in the
office of the Company all letters, contracts, leases, assignments, deeds and
other instruments in writing and documents not properly belonging to the office
of the Treasurer; shall attend to such correspondence of the Company as the
Board of Directors shall direct, and shall perform such other duties as he/she
may be charged with by the Board of Directors or by law or as by general usage
appertain to his/her office.
ARTICLE X
Assistant Secretaries
Section 1. An Assistant Secretary shall, in the absence or disability or at
the request of the Secretary, perform the duties of the Secretary, and perform
such other duties as shall, from time to time, be imposed upon him/her by the
Board. The performance of any such duty by an Assistant Secretary shall be
conclusive evidence of his/her right to act.
<PAGE>
10
ARTICLE XI
Treasurer
Section 1. The Treasurer shall have charge of all receipts and
disbursements of the Company, and shall be the custodian of the Company's funds.
He/She shall have full authority to receive and give receipts for all money due
and payable to the Company from any source whatever, and to endorse checks,
drafts and warrants in its name and on its behalf, and to give full discharge
for the same. He/She shall sign all certificates of stock, checks, notes and
drafts, except as otherwise provided for by the Board of Directors. He/She shall
also affix the seal of the Company to all certificates of stock and other
instruments of writing required or directed by law, these By-Laws, or by
resolution of the Board of Directors to have the seal affixed by him/her. He/She
shall also perform such other duties as he/she may be charged with by the Board
or Directors or by law or as by general usage appertain to his/her office.
Section 2. The Treasurer shall execute, if required by the Board, a bond in
the penalty fixed by the Board, with such surety as the Board may approve,
conditioned for the delivery to the President, or according to the order of the
Board, in case of his/her (Treasurer's) decease, resignation or discharge, of
all moneys, bonds, evidences of debt, vouchers, accounts, books, writings, and
papers belonging to the Company, received by him/her or in his/her possession,
charge or custody, and for the faithful performance of all duties of his/her
office.
ARTICLE XII
Assistant Treasurer
Section 1. An Assistant Treasurer shall, in the absence or disability or at
the request of the Treasurer, perform the duties of the Treasurer and perform
such other duties as shall, from time to time, be imposed upon him/her by the
Board. The performance of any such duty shall be conclusive evidence of his/her
right to act. He/She shall execute, if required by the Board, a bond in the same
manner as the Treasurer, as provided in Section 2, Article XI, of these By-Laws.
ARTICLE XIII
Comptroller
Section 1. The Comptroller shall be the chief accounting officer of the
Company. He/She shall cause to be kept full and accurate books and accounts of
all assets, liabilities and transactions of the Company. He/She shall develop
<PAGE>
11
and establish systems and procedures to maintain internal controls, to report on
operations, and to provide financial statements. The Comptroller shall also
perform such other duties as he/she may be charged with by the Board of
Directors or by law or as by general usage appertain to his/her office.
ARTICLE XIV
Assistant Comptroller
Section 1. An Assistant Comptroller shall, in the absence or disability or
at the request of the Comptroller, perform the duties of the Comptroller and
perform such other duties as shall from time to time be imposed upon him/her by
the Board. The performance of any such duty shall be conclusive evidence of
his/her right to act.
ARTICLE XV
Corporate Seal
Section 1. The Company shall have a corporate seal, which shall be circular
in form, with the name of the Company on the circumference, and "Delaware" in
the center.
ARTICLE XVI
Certificates of Stock and Transfer Thereof
Section 1. Each stockholder of the Company shall be entitled to receive a
certificate of the number of shares standing to his, her or their credit on the
books of the Company, which certificate shall be signed by the President or a
Vice President or other officer designated by the Board of Directors,
countersigned by the Treasurer or an Assistant Treasurer and sealed with the
common seal of the Company. The signature, countersignature and seal, or any of
them required by this Section, may be executed in facsimile, engraved or
printed, if the certificate of stock is countersigned by a transfer agent or
registered by a registrar appointed by the Board of Directors which shall not be
the Company or an employee of the Company. In case any such officer, who has
signed or countersigned or whose facsimile signature or countersignature has
been placed upon such certificate, shall have ceased to be such before such
certificate is issued, it may be issued by the Company with the same effect as
if such officer had not ceased to be such at the date of its issue. Said
certificates shall be in such form as the Board of Directors shall from time to
time prescribe.
<PAGE>
12
Section 2. The shares may be transferred on the books of the Company, by
the holder thereof in person or by duly authorized attorney, upon surrender of
the certificates properly endorsed.
Section 3. The Board of Directors shall have power to close the stock
transfer books of the Company for a period not exceeding forty (40) days
preceding the date of any meeting of the stockholders or the date for payment of
any dividend or the date for the allotment of rights or the date when any change
or conversion or exchange of capital stock shall go in effect, or for a period
of not exceeding forty (40) days in connection with obtaining the consent of
stockholders for any purpose; provided, however, that in lieu of closing the
stock transfer books as aforesaid, the Board of Directors may fix in advance a
date not exceeding forty (40) days preceding the date of any meeting of
stockholders or the date for the payment of any dividend or the date for the
allotment of rights or the date when any change or conversion or exchange of
capital stock shall go into effect, or a date in connection with obtaining such
consent as a record date for the determination of the stockholders entitled to
notice of, and to vote at any such meeting and any adjournment thereof, or
entitled to receive payment of any such dividend, or to any such allotment of
rights, or to exercise the rights in respect of any such change, conversion or
exchange of capital stock, or to give such consent, and in such case only such
stockholders as shall be stockholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting and any adjournment
thereof, or to receive payment of such dividend, or to receive such allotment of
rights, or to exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the Company after any
such record date fixed as aforesaid.
Section 4. Where a certificate for capital stock of the Company has been
lost or destroyed, the proper officers of the Company may execute and issue a
new certificate therefor upon satisfactory proof of such loss or destruction and
upon giving of a bond, with or without surety, to protect the Company from any
liability or expense which it may incur by reason of the original certificate
remaining outstanding.
<PAGE>
13
ARTICLE XVII
Fiscal Year
Section 1. The fiscal year of this Company shall be the calendar year.
ARTICLE XVIII
Amendments
Section 1. These By-Laws may be altered, added to or repealed at any annual
or special meeting of the stockholders or at any regular or special meeting of
the Board of Directors.
<PAGE>
Exhibit 4-A
TRUST AGREEMENT OF
DELMARVA POWER FINANCING I
This TRUST AGREEMENT of Delmarva Power Financing I (the "Trust"),
dated as of June 27, 1996, among (i) Delmarva Power & Light Company, a Delaware
and Virginia corporation (the "Depositor"), (ii) Wilmington Trust Company, a
Delaware banking corporation, not in its individual capacity but solely as
trustee of the Trust, and (iii) Barbara S. Graham, an individual employed by the
Depositor, not in her individual capacity but solely as administrative trustee
of the Trust (each of such trustees in (ii) and (iii) a "Trustee" and
collectively, the "Trustees"). The Depositor and the Trustees hereby agree as
follows:
1. The Trust created hereby shall be known as "Delmarva Power
Financing I", in which name the Trustees, or the Depositor to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to
the Trustees the sum of $10. The Trustees hereby acknowledge receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustees hereby declare that they will hold the trust estate
in trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. (S) 3801 et seq. (the "Business Trust Act"), and
------- -- ---
that this document constitutes the governing instrument of the Trust. The
Trustees hereby are authorized
<PAGE>
and directed to execute and file a certificate of trust with the Secretary of
State of the State of Delaware in accordance with the provisions of the Business
Trust Act.
3. The Depositor and the Trustees will enter into an Amended and
Restated Trust Agreement, satisfactory to each such party and substantially in
the form to be included as an exhibit to the 1933 Act Registration Statement
referred to below, to provide for the contemplated operation of the Trust
created hereby and the issuance of the Preferred Securities and Common
Securities referred to therein. Prior to the execution and delivery of such
Amended and Restated Trust Agreement, the Trustees shall not have any duty or
obligation hereunder or with respect of the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.
4. The Trustees hereby authorize and direct the Depositor (i) to
file with the Securities and Exchange Commission (the "Commission") and execute,
in each case on behalf of the Trust, (a) a Registration Statement on Form S-3
(the "1933 Act Registration Statement"), including any pre-effective or post-
effective amendments to the 1933 Act Registration Statement, relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities of the Trust and certain other securities and (b) a Registration
Statement on Form 8-A (the "1934 Act Registration Statement") (including all
pre-effective and post-effective amendments thereto) relating to the
registration of the Preferred Securities of the Trust under Section 12(b) of the
Securities Exchange Act of 1934, as amended; (ii) to file with the New York
Stock Exchange (the "Exchange") and execute on behalf of the Trust a listing
application and all other applications, statements, certificates, agreements and
other instruments as shall be
-2-
<PAGE>
necessary or desirable to cause the Preferred Securities to be listed on the
Exchange and (iii) to file and execute on behalf of the Trust such applications,
reports, surety bonds, irrevocable consents, appointments of attorney for
service of process and other papers and documents as shall be necessary or
desirable to register the Preferred Securities under the securities or blue sky
laws of such jurisdictions as the Depositor, on behalf of the Trust, may deem
necessary or desirable. In the event that any filing referred to above is
required by the rules and regulations of the Commission, the Exchange or state
securities or blue sky laws, to be executed on behalf of the Trust by one or
more of the Trustees, each of the Trustees, in its or his capacity as Trustee of
the Trust, is hereby authorized and, to the extent so required, directed to join
in any such filing and to execute on behalf of the Trust any and all of the
foregoing, it being understood that Wilmington Trust Company in its capacity as
Trustee of the Trust, shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required by the rules
and regulations of the Commission, the Exchange or state securities or blue sky
laws. In connection with the filings referred to above, the Depositor and
Barbara S. Graham, as administrative trustee, solely in her capacity as Trustee
of the Trust, hereby constitutes and appoints Barbara S. Graham, Edric R. Mason
and Donald P. Connelly, each of them, as its or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for the Depositor or such Trustee or in the Depositor's or such
Trustee's name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to any such filings (including
the 1933 Act Registration Statement and the 1934 Act Registration Statement) and
to file the same, with all exhibits thereto and other documents in connection
therewith, with the Commission, the Exchange and administrators of
-3-
<PAGE>
state securities or blue sky laws, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as the Depositor or such Trustee might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their respective substitute or substitutes, shall do
or cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be two (2) and thereafter
the number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by the Depositor which may increase or decrease
the number of Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall be either a natural person who is a
resident of the State of Delaware, or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and otherwise meets
the requirements of applicable Delaware law. Subject to the foregoing, the
Depositor is entitled to appoint or remove without cause any Trustee at any
time. The Trustees may resign upon thirty days prior written notice to
Depositor.
7. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
DELMARVA POWER & LIGHT COMPANY, _____________________________
as Depositor Barbara S. Graham, not in her
individual capacity but solely
as Administrative Trustee
By: ______________________
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as Trustee
By: _____________________
Name:
Title:
<PAGE>
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:
<TABLE>
<CAPTION>
Trust Indenture Trust Agreement
Act Section Section
- --------------- -----------
<S> <C>
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) ............................... Not Applicable
(b) ............................... Not Applicable
(c)(1) ............................... Not Applicable
(c)(2) ............................... Not Applicable
(c)(3) ............................... Not Applicable
(d) ............................... Not Applicable
(e) ............................... Not Applicable
Section 315(a) ............................... 8.01
(b) ............................... 8.02, 8.14(b)
(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
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Section 317(a)(1) ............................... Not Applicable
(a)(2) ............................... Not Applicable
(b) ............................... 5.09
Section 318(a) ............................... 10.10
</TABLE>
- ---------------------------
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
<TABLE>
<S> <C>
Section 1.01. Definitions ........................................ 2
</TABLE>
ARTICLE II.
Establishment of the Trust
<TABLE>
<S> <C>
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;
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
</TABLE>
ARTICLE III.
Payment Account
<TABLE>
<S> <C>
Section 3.01. Payment Account ..................................... 16
</TABLE>
ARTICLE IV.
Distributions; Redemption
<TABLE>
<S> <C>
Section 4.01. Distributions ....................................... 16
Section 4.02. Redemption .......................................... 17
Section 4.03. Subordination of Common Securities .................. 19
Section 4.04. Payment Procedures .................................. 19
Section 4.05. Tax Returns and Reports ............................. 20
Section 4.06. Payments under Subordinated Indenture ............... 20
</TABLE>
ARTICLE V.
Trust Securities Certificates
<TABLE>
<S> <C>
Section 5.01. Initial Ownership ................................... 20
Section 5.02. The Trust Securities Certificates ................... 20
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Section 5.03. Execution and Delivery of Trust Securities
Certificates ................................................. 21
Section 5.04. Registration of Transfer and Exchange of
Preferred Securities Certificates ............................ 21
Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates ...................................... 22
Section 5.06. Persons Deemed Securityholders ...................... 22
Section 5.07. Access to List of Securityholders'
Names and Addresses .......................................... 22
Section 5.08. Maintenance of Office or Agency ...................... 23
Section 5.09. Appointment of Paying Agent .......................... 23
Section 5.10. Ownership of Common Securities by Depositor .......... 24
Section 5.11. Forms of Preferred Securities Certificates,
Initial Execution ............................................ 24
Section 5.12. Book-Entry System .................................... 24
Section 5.13. Rights of Securityholders ............................ 25
</TABLE>
ARTICLE VI.
Acts of Securityholders; Meetings; Voting
<TABLE>
<S> <C>
Section 6.01. Limitations on Voting Rights ........................ 25
Section 6.02. Notice of Meetings .................................. 26
Section 6.03. Meetings of Holders of Preferred Securities ......... 26
Section 6.04. Voting Rights ....................................... 27
Section 6.05. Proxies, etc. ....................................... 27
Section 6.06. Securityholder Action by Written Consent............. 27
Section 6.07. Record Date for Voting and Other Purposes............ 27
Section 6.08. Acts of Securityholders.............................. 27
Section 6.09. Inspection of Records................................ 29
</TABLE>
ARTICLE VII.
Representations and Warranties of the Property
Trustee and the Delaware Trustee
<TABLE>
<S> <C>
Section 7.01. Property Trustee .................................... 29
</TABLE>
ARTICLE VIII.
The Trustees
<TABLE>
<S> <C>
Section 8.01. Certain Duties and Responsibilities ................. 30
Section 8.02. Certain Notices ..................................... 32
Section 8.03. Certain Rights of Property Trustee .................. 32
Section 8.04. Not Responsible for Recitals or Issuance
of Securities ................................................ 35
Section 8.05. May Hold Securities ................................. 35
Section 8.06. Compensation; Fees; Indemnity ....................... 35
Section 8.07. Certain Trustees Required; Eligibility .............. 36
Section 8.09. Co-Trustees and Separate Trustee .................... 36
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
Section 8.10. Resignation and Removal; Appointment of Successor.... 38
Section 8.11. Acceptance of Appointment by Successor .............. 39
Section 8.12. Merger, Conversion, Consolidation or Succession
to Business .................................................. 39
Section 8.13. Preferential Collection of Claims Against
Depositor or Trust ........................................... 40
Section 8.14. Reports by Property Trustee ......................... 40
Section 8.15. Reports to the Property Trustee ..................... 40
Section 8.16. Evidence of Compliance With Conditions Precedent .... 40
Section 8.17. Number of Trustees .................................. 40
Section 8.18. Delegation of Power ................................. 41
Section 8.19. Fiduciary Duty ...................................... 41
</TABLE>
ARTICLE IX.
Termination and Liquidation
<TABLE>
<S> <C>
Section 9.01. Termination Upon Expiration Date .................... 42
Section 9.02. Early Termination ................................... 42
Section 9.03. Termination ......................................... 43
Section 9.04. Liquidation ......................................... 43
Section 9.05. Mergers, Consolidations, Amalgamations or
Replacements of the Trust .................................... 45
</TABLE>
ARTICLE X.
Miscellaneous Provisions
<TABLE>
<S> <C>
Section 10.01. Guarantee by the Depositor and Assumption of
Obligations .................................................. 46
Section 10.02. Limitation of Rights of Securityholders ............. 46
Section 10.03. Amendment ........................................... 46
Section 10.04. Separability ........................................ 48
Section 10.05. Governing Law ....................................... 48
Section 10.06. Successors .......................................... 48
Section 10.07. Headings ............................................ 48
Section 10.08. Notice and Demand ................................... 48
Section 10.09. Agreement Not to Petition ........................... 49
Section 10.10. Conflict with Trust Indenture Act ................... 49
</TABLE>
-iii-
<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") and (v) the several Holders, as hereinafter
defined.
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:
<PAGE>
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.
-2-
<PAGE>
"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, liquidator, 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.
-3-
<PAGE>
"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.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.01(a).
-4-
<PAGE>
"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.
-5-
<PAGE>
"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 (i) Trust Securities having a Liquidation Amount
equal to the principal amount of Debentures to be contemporaneously redeemed in
accordance with the Subordinated Indenture and the proceeds of which will be
used to pay the Redemption Price of such Trust Securities and (ii) Debentures
having a principal amount equal to the Liquidation Amount of the Trust
Securities of the Holder to whom such Debentures are 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.
-6-
<PAGE>
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Depositor, and delivered to the appropriate Trustee. One of
the officers signing an Officers' Certificate given pursuant to Section 8.16
shall be the principal executive, financial or accounting officer of the
Depositor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" 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
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(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 5.04 or 5.05;
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, in its trust
department 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
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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 5.04.
"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 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
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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, deductible by the Depositor, in whole or
in part, 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.
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ARTICLE II.
Establishment of the Trust
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; 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. 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 5.02, 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,
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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. 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 2.07. 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 (A) and (B), 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;
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(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;
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(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)(A) or the Depositor set forth in Section 2.07(i). 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):
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(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
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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.
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.
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 , 1996. If any date on which Distributions are
otherwise payable on the Trust
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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 (and without any interest
or other payment in respect of any such delay) except that, if such Business Day
is in the next succeeding calendar year, 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 or liquidation shall state:
(i) the Redemption Date;
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(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; and
(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.
(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 Preferred
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) Payment of the Redemption Price on the Trust Securities to be
redeemed on any Redemption Date shall be made to the Holders thereof as they
appear on the Securities Register for the Trust Securities on the relevant
record date, which shall be the fifteenth day prior to such Redemption Date.
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(f) 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 a 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.
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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. Initial Ownership. Upon the creation of the Trust by
the contribution by the Depositor pursuant to Section 2.03 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.
Section 5.02. 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 manual 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,
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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. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.04 or
5.11.
Section 5.03. Execution and Delivery of Trust Securities
Certificates. On the Closing Date, the Administrative Trustees, or any one of
them, shall cause Trust Securities Certificates, in an aggregate Liquidation
Amount as provided in Sections 2.04 and 2.05, to be executed on behalf of the
Trust, and in the case of Preferred Securities executed by facsimile signature,
countersigned by a Transfer Agent or its agent, and delivered to or upon the
written order of the Depositor signed by its chairman of the board, its
president, any of its vice presidents or its treasurer, without further
corporate action by the Depositor, in authorized denominations. The Depositor
agrees to indemnify, defend and hold each Transfer Agent harmless against any
and all costs and liabilities incurred without negligence arising out of or in
connection with any such countersigning by it.
Section 5.04. 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. Each Preferred Securities Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Administrative Trustees in accordance with customary practice. The
Trust shall not be required to (i) issue, register the transfer of, or exchange
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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 5.05. 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 5.05, 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 5.05
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 5.06. 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. Access to List of Securityholders' Names and Addresses.
The Administrative Trustees shall furnish, or cause to be furnished, (i) to the
Depositor, within 15 days after receipt by any Administrative Trustee of a
request therefor from the Depositor in writing and (ii) to the Property Trustee,
promptly after receipt by any
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Administrative Trustee of a request therefor from the Property Trustee in
writing in order to enable the Property Trustee to discharge its obligations
under this Trust Agreement, a list, in such form as the Depositor or the
Property Trustee may reasonably require, of the names and addresses of the
Securityholders as of the most recent record date. If Holders of Trust
Securities Certificates evidencing ownership at such time and for the previous
six months not less than 25% of the outstanding aggregate Liquidation Amount
apply in writing to any Administrative Trustee, and such application states that
the applicants desire to communicate with other Securityholders with respect to
their rights under this Trust Agreement or under the Trust Securities
Certificates and such application is accompanied by a copy of the communication
that such applicants propose to transmit, then the Administrative Trustees
shall, within five Business Days after the receipt of such application, afford
such applicants access during normal business hours to the current list of
Securityholders. Each Holder, by receiving and holding a Trust Securities
Certificate, shall be deemed to have agreed not to hold either the Depositor or
the Administrative Trustees accountable by reason of the disclosure of its
name and address, regardless of the source from which such information was
derived.
Section 5.08. Maintenance of Office or Agency. The Depositor shall
or shall cause the Transfer Agent to maintain, in Wilmington, Delaware, 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 Depositor or the Transfer Agent in respect of the
Trust Securities Certificates may be served. The Depositor initially designates
Wilmington Trust Company at its principal corporate trust office for such
purposes. The Depositor 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
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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. 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 5.11. Forms of Preferred Securities Certificates, Initial
Execution. Preferred 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. Upon the initial issuance
of the Preferred Securities, the Administrative Trustees, or any one of them,
shall execute the Preferred Securities Certificates on behalf of the Trust by
manual or facsimile signature, and, if executed by facsimile on behalf of the
Trust, such Certificates shall be countersigned by the Transfer Agent or its
agent. The initial Preferred Securities Certificates shall be prepared in
accordance with the instructions of the Depositor. Neither the Transfer Agent
nor any of the Administrative Trustees shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions.
Section 5.12. 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.
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(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.
Section 5.13. 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 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
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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. The Property Trustee
shall notify all Holders of the Preferred Securities of any notice of default
received from the Debenture Trustee with respect to the Debentures.
Section 6.02. Notice of Meetings. Notice of all meetings of the
Holders of 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.
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(c) If a quorum is present at a meeting, an affirmative vote by the
Holders of Preferred Securities present, in person or by proxy, holding more
than the lesser of (i) 66 2/3% of the aggregate Liquidation Amount of the
Outstanding Preferred Securities held by the Holders of then Outstanding
Preferred Securities present, either in person or by proxy, at such meeting and
(ii) 50% 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, or, if earlier, until eleven months after it is sent 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 and Other Purposes. For the
purposes of determining the Securityholders who are entitled to notice of and to
vote at any meeting or by written consent, or to participate in any Distribution
on the Trust Securities in respect of which a record date is not otherwise
provided for in this Trust Agreement, 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 the payment of any
Distribution 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
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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.
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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 and the Delaware 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.
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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
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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 rspect of any Trust
Security. This Section 8.01(c) does not limit the liability of the
Trustees expressly set forth
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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
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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 Officers' 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;
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(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
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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
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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.
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
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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
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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 Trustee may resign at any time by giving written notice
thereof to the Securityholders. 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
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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 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, in the case of
the Property Trustee, 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
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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 Trust Securities are listed, with the Commission
and with the Depositor. The Depositor will notify the Property Trustee when any
Trust 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 Officers'
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.
(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
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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. 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
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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);
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(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
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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
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<PAGE>
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 Preferred Securities shall have a priority over 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
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<PAGE>
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.
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<PAGE>
(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
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<PAGE>
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.
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<PAGE>
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) This Trust
Agreement is subject to the provisions of the Trust Indenture Act that are
required or deemed to be part of this Trust Agreement and shall, to the extent
applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) 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 any of the provisions of the Trust Indenture Act, such
required or deemed provision shall control.
(d) 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.
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<PAGE>
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.
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<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
--------------------------------
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<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. (S) 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
but solely as Trustee but solely as Trustee
By:
------------------- ---------------
Name:
Title:
A-1
<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 5.10 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.
B-1
<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
B-2
<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.
C-1
<PAGE>
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
C-2
<PAGE>
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
C-3
<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.
D-1
<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
D-2
<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)
D-3
<PAGE>
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>
i
TABLE OF CONTENTS
<TABLE>
<S> <C>
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
Security Register and Security Registrar........................................ 6
Senior Indebtedness............................................................. 6
</TABLE>
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART
OF THE INDENTURE.
<PAGE>
ii
<TABLE>
<S> <C>
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............................................................ 18
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
SECTION 405. Securities Payable on Redemption Date.................................... 27
SECTION 406. Securities Redeemed in Part.............................................. 27
ARTICLE FIVE Sinking Funds................................................................. 28
</TABLE>
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART
OF THE INDENTURE.
<PAGE>
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<TABLE>
<S> <C>
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................................................. 34
SECTION 701. Defeasance............................................................. 34
SECTION 702. Satisfaction and Discharge of Indenture................................ 36
SECTION 703. Application of Trust Money............................................. 37
ARTICLE EIGHT Events of Default; Remedies................................................ 37
SECTION 801. Events of Default...................................................... 37
SECTION 802. Acceleration of Maturity; Rescission and Annulment..................... 39
SECTION 803. Collection of Indebtedness and Suits for Enforcement by Trustee........ 40
SECTION 804. Trustee May File Proofs of Claim....................................... 41
SECTION 805. Trustee May Enforce Claims Without Possession of Securities............ 41
SECTION 806. Application of Money Collected......................................... 42
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........................................... 44
SECTION 812. Control by Holders of Securities....................................... 44
SECTION 813. Waiver of Past Defaults................................................ 44
SECTION 814. Undertaking for Costs.................................................. 45
SECTION 815. Waiver of Stay or Extension Laws....................................... 45
ARTICLE NINE The Trustee................................................................. 46
SECTION 901. Certain Duties and Responsibilities.................................... 46
SECTION 902. Notice of Defaults..................................................... 47
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.................................................... 49
SECTION 907. Compensation and Reimbursement......................................... 49
</TABLE>
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART OF
THE INDENTURE.
<PAGE>
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<TABLE>
<S> <C>
SECTION 908. Disqualification; Conflicting Interests................................ 50
SECTION 909. Corporate Trustee Required; Eligibility................................ 50
SECTION 910. Resignation and Removal; Appointment of Successor...................... 51
SECTION 911. Acceptance of Appointment by Successor................................. 53
SECTION 912. Merger, Conversion, Consolidation or Succession to Business............ 54
SECTION 913. Preferential Collection of Claims Against Company...................... 54
SECTION 914. Co-trustees and Separate Trustees...................................... 55
SECTION 915. Appointment of Authenticating Agent.................................... 56
ARTICLE TEN Holders' Lists and Reports by Trustee and Company............................ 58
SECTION 1001. Lists of Holders...................................................... 58
SECTION 1002. Reports by Trustee and Company........................................ 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.................................. 63
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........................... 64
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......... 68
SECTION 1401. Liability Solely Corporate............................................ 68
ARTICLE FIFTEEN Subordination of Securities.............................................. 68
SECTION 1501. Securities Subordinate to Senior Indebtedness......................... 68
SECTION 1502. Payment Over of Proceeds of Securities................................ 69
SECTION 1503. Disputes with Holders of Certain Senior Indebtedness.................. 71
SECTION 1504. Subrogation........................................................... 71
SECTION 1505. Obligation of the Company Unconditional............................... 71
SECTION 1506. Priority of Senior Indebtedness Upon Maturity......................... 72
SECTION 1507. Trustee as Holder of Senior Indebtedness.............................. 72
</TABLE>
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART OF
THE INDENTURE.
<PAGE>
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<TABLE>
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SECTION 1508. Notice to Trustee to Effectuate Subordination......................... 72
SECTION 1509. Modification, Extension, etc. of Senior Indebtedness.................. 73
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....................... 74
Testimonium............................................................................... 74
Signatures and Seals...................................................................... 74
Acknowledgements.......................................................................... 76
</TABLE>
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
<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION INDENTURE SECTION
<S> <C> <C>
(S)310 (a)(1) ................................................................................ 909
(a)(2)................................................................................. 909
(a)(3)................................................................................. 914
(a)(4).................................................................................Not Applicable
(b).................................................................................... 908
910
(S)311 (a).................................................................................... 913
(b).................................................................................... 913
(c).................................................................................... 913
(S)312 (a).................................................................................... 1001
(b).................................................................................... 1001
(c).................................................................................... 1001
(S)313 (a).................................................................................... 1002
(b).................................................................................... 1002
(c).................................................................................... 1002
(S)314 (a).................................................................................... 1002
(a)(4)................................................................................. 606
(b)....................................................................................Not Applicable
(c)(1)................................................................................. 102
(c)(2)................................................................................. 102
(c)(3).................................................................................Not Applicable
(d)....................................................................................Not Applicable
(e).................................................................................... 102
(S)315 (a).................................................................................... 901
903
(b).................................................................................... 902
(c).................................................................................... 901
(d).................................................................................... 901
(e).................................................................................... 814
(S)316 (a).................................................................................... 812
813
(a)(1)(A).............................................................................. 802
812
(a)(1)(B).............................................................................. 813
(a)(2).................................................................................Not Applicable
(b).................................................................................... 808
(S)317 (a)(1)................................................................................. 803
(a)(2)................................................................................. 804
(b).................................................................................... 603
(S)318 (a).................................................................................... 107
</TABLE>
<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
<PAGE>
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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
<PAGE>
-3-
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
<PAGE>
-4-
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
<PAGE>
-5-
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.
<PAGE>
-6-
"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).
<PAGE>
-7-
"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;
<PAGE>
-8-
(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
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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.
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(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
<PAGE>
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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:
Telecopy:
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.
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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.
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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.
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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
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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;
<PAGE>
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(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;
<PAGE>
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(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.
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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;
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(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
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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 here under.
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.
<PAGE>
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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
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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
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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 pro posed 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
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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.
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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 con templated 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
<PAGE>
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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
<PAGE>
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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.
<PAGE>
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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;
<PAGE>
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(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.
<PAGE>
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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;
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(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
<PAGE>
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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,
1996, 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
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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.
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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
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(iii) if such deposit shall have been made prior to the Maturity
of such Securities, an Officer's Certificate stating the Company's
intention that, upon delivery of such Officer's Certificate, its
indebtedness in respect of such Securities or portions thereof will
have been satisfied and discharged as contemplated in this Section.
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 Officer's Certificate 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.
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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.
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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
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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
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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,
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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
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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
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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;
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(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
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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
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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.
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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.
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(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 omit ting 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
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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,
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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 ad vance 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
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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.
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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 bank rupt 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 (other
than as
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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 ap pointed 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.
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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.
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(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
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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
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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 Authenti cating 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.
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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
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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 __, 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 AND COMPANY.
Within 60 days after December 31 in each year, commencing December 31,
1996, the Trustee shall transmit to the Holders and the Commission a report,
with respect to any events and other matters described in Section 313(a) of the
Trust Indenture Act, in such manner and to the extent required by the Trust
Indenture Act. The Trustee shall transmit to the Holders and the Commission, and
the Company shall file with the Trustee (within 30 days after filing with the
Commission in the case of reports which pursuant to the Trust Indenture Act must
be filed with the Commission and furnished to the Trustee) and transmit to the
Holders, such other information, reports and other documents, if any, at such
times and in such manner, as shall be required by the Trust Indenture Act.
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
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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
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(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
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(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
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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
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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.
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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,
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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.
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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
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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.
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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.
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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
<PAGE>
-70-
(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.
<PAGE>
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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
<PAGE>
-72-
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
<PAGE>
-73-
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.
<PAGE>
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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.
_________________________
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>
-75-
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>
-76-
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>
-77-
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.
__________________
<PAGE>
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
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I DEFINITIONS............................................................................. 1
SECTION 1.01 Definitions..................................................................... 1
ARTICLE II TRUST INDENTURE ACT..................................................................... 4
SECTION 2.01 Trust Indenture Act; Application................................................ 4
SECTION 2.02 Lists of Holders of Preferred Securities........................................ 4
SECTION 2.03 Reports by the Guarantee Trustee................................................ 4
SECTION 2.04 Periodic Reports to Guarantee Trustee........................................... 4
SECTION 2.05 Evidence of Compliance with Conditions Precedent................................ 5
SECTION 2.06 Events of Default; Waiver....................................................... 5
SECTION 2.07 Event of Default; Notice........................................................ 5
SECTION 2.08 Conflicting Interests........................................................... 5
ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE.......................................... 6
SECTION 3.01 Powers and Duties of the Guarantee Trustee...................................... 6
SECTION 3.02 Certain Rights of Guarantee Trustee............................................. 7
ARTICLE IV GUARANTEE TRUSTEE....................................................................... 9
SECTION 4.01 Guarantee Trustee; Eligibility.................................................. 9
SECTION 4.02 Compensation and Reimbursement.................................................. 10
SECTION 4.03 Appointment, Removal and Resignation
of Guarantee Trustee............................................................ 11
ARTICLE V GUARANTEE .............................................................................. 11
SECTION 5.01 Guarantee....................................................................... 11
SECTION 5.02 Waiver of Notice and Demand..................................................... 12
SECTION 5.03 Obligations Not Affected........................................................ 12
SECTION 5.04 Rights of Holders............................................................... 13
SECTION 5.05 Guarantee of Payment............................................................ 13
SECTION 5.06 Subrogation..................................................................... 13
SECTION 5.07 Independent Obligations......................................................... 13
ARTICLE VI SUBORDINATION........................................................................... 13
SECTION 6.01 Subordination................................................................... 13
ARTICLE VII TERMINATION............................................................................. 14
SECTION 7.01 Termination..................................................................... 14
ARTICLE VIII MISCELLANEOUS........................................................................... 14
SECTION 8.01 Successors and Assigns.......................................................... 14
SECTION 8.02 Amendments...................................................................... 14
SECTION 8.03 Notices......................................................................... 15
SECTION 8.04 Benefit......................................................................... 16
SECTION 8.05 Interpretation.................................................................. 16
SECTION 8.06 Governing Law................................................................... 16
</TABLE>
<PAGE>
CROSS-REFERENCE TABLE
---------------------
<TABLE>
<CAPTION>
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
- ------------------- ----------
<S> <C>
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)
</TABLE>
_______________
* 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 nam ed therein, Delmarva Power & Light Company, as Depositor, and the
several Holders (as defined therein) 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.
"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,
<PAGE>
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.
"Common Securities" means the securities representing common undivided
beneficial ownership interests in the assets of the Issuer.
"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
(the "Redemption Price"), and all accrued and unpaid Distributions to the date
of redemption, 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
(other than in connection with a redemption of all of the 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 (in either case, 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 holder, as registered on the books and records
of the Issuer, of any Preferred Securities then outstanding; 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.
"Majority in liquidation amount of the Preferred Securities" means a
vote by Holders, voting separately as a class, of more than 50% of the aggregate
liquidation amount of all of the outstanding Preferred Securities.
-2-
<PAGE>
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Guarantor, and delivered to the Guarantee Trustee. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Corporate Trust Department
of the Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
-3-
<PAGE>
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required or deemed to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such provisions;
and
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.02 LISTS OF HOLDERS OF PREFERRED SECURITIES.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (i) semiannually, not later than December 31 and June 30 in
each year, a list, in such form as the Guarantee Trustee may reasonably require,
of the names and addresses of the Holders ("List of Holders") as of a date not
more than 15 days prior to the delivery thereof, and (ii) at such other times as
the Guarantee Trustee may request in writing, within 30 days after the receipt
by the Guarantor of any such request, a List of Holders as of a date not more
than 15 days prior to the time such list is furnished; provided, however, that
the Guarantor shall not be obligated to provide such List of Holders at any time
the List of Holders does not differ from the most recent List of Holders given
to the Guarantee Trustee by the Guarantor. The Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new List of Holders.
(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. Within 60 days after
December 31 of each year, commencing December 31, 1996, the Guarantee Trustee
shall provide to the Holders such reports, if any, as are required by Section
313(a) of the Trust Indenture Act in the form and in the manner provided by
Section 313(a) of the Trust Indenture Act. The Guarantee Trustee shall also
comply with the requirements of Sections 313(b), (c) and (d) of the Trust
Indenture Act.
SECTION 2.04 PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor
shall provide to the Guarantee Trustee such documents, reports and information
as required by Section 314 (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
-4-
<PAGE>
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 Officers'
Certificate.
SECTION 2.06 EVENTS OF DEFAULT; WAIVER. The Holders of a Majority in
liquidation amount of 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, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notices of all Events of Default known to the Guarantee Trustee, unless
such defaults have been cured before the giving of such notice; provided,
however, that the Guarantee Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors or Responsible Officers of the Guarantee Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders.
(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, or a Responsible Officer charged with the administration of the Trust
Agreement shall have obtained written notice, of such Event of Default.
SECTION 2.08 CONFLICTING INTERESTS. The Trust Agreement and the
Indenture shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
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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;
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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
Officers' Certificate;
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(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 Officers' 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;
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(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
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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.
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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.
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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.
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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 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 (a) subordinate and
junior in right of payment to all other liabilities of the Guarantor, including
the Debentures, except those made
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pari passu or subordinate by their terms, (b) pari passu with the most senior
preferred or preference stock now or hereafter issued by the Guarantor and with
any guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor, and (c) senior
to all common stock of the Guarantor. Nothing in this Section 6.01 shall apply
to claims of, or payments to, the Guarantee Trustee under or pursuant to Section
4.02 hereof.
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, and all accrued and unpaid Distributions to
the date of redemption, (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.
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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:
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
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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) Capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to
them in Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) 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;
(f) a reference to the singular includes the plural and vice versa;
and
(g) 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.
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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:
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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 __,
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"). 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;
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 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 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
(and without any interest or other payment in respect of such delay),
except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such
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
<PAGE>
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
Company, however, may not redeem less than all Outstanding Debentures
of the First Series unless the conditions specified in the last
paragraph of this item are met;
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
- 2 -
<PAGE>
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, deductible, in
whole or in part, 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, upon not less than 30 nor
more than 60 days' notice given as provided in the Indenture.
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 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 or
if a partial redemption of the Preferred Securities would result in a
delisting of such securities by any national securities exchange on
which they are then listed;
8. So long as any Debentures of the First Series are Outstanding, the
failure of the Company to pay interest on any Debentures of the First
Series within 30 days after the same becomes due and payable (whether
or not payment is prohibited by the provisions of Article Fifteen of
the Indenture) shall constitute an Event of Default; provided,
however, that a valid extension of the interest payment period by the
Company as contemplated in Section 311 of the Indenture and paragraph
(9) of this Certificate shall not constitute a failure to pay interest
for this purpose;
- 3 -
<PAGE>
9. 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") during which period interest will be compounded quarterly. 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). However, 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 maturity date 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
distribution 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;
10. 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;
11. 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;
12. 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;
13. 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;
- 4 -
<PAGE>
14. 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;
15. 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;
16. 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
17. 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.
- 5 -
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Officer's Certificate
this _____ day of ___________________, 1996.
_________________________________________
- 6 -
<PAGE>
NO. R-1
EXHIBIT A
DELMARVA POWER & LIGHT COMPANY
____% JUNIOR SUBORDINATED DEBENTURES, SERIES __,
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 (and
without any interest or other payment in respect of such delay), except that, if
such Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on 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
<PAGE>
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
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<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, deductible, in whole or in part, 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.
- 3 -
<PAGE>
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
- 4 -
<PAGE>
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 "Extended Interest Payment
Period"), and at the end of such Extended Interest Payment 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); provided, however, that
during such Extended Interest Payment 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
Extended Interest Payment Period, the Company may further extend the interest
payment period, provided that such Extended Interest Payment 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 Extended Interest Payment Period
and the payment of all amounts then due, the Company may select a new Extended
Interest Payment Period, subject to the above requirements. No interest during
the Extended Interest Payment 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 Extended Interest Payment 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).
- 5 -
<PAGE>
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.
- 6 -
<PAGE>
[DELMARVA POWER & LIGHT COMPANY LETTERHEAD APPEARS HERE]
EXHIBIT 5-A
-----------
June 27, 1996
Delmarva Power & Light Company
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
Re: Registration of Trust Preferred Capital Securities,
a Guarantee and Junior Subordinate Debentures
---------------------------------------------
Ladies and Gentlemen:
In connection with the proposed registration of (i) Trust Preferred Capital
Securities ("Preferred Securities") of Delmarva Power Financing I, a Delaware
business trust (the "Trust"), which Preferred Securities have an aggregate
liquidation amount of up to $70 million and are to be offered in an underwritten
public offering; and (ii) a Guarantee by Delmarva Power & Light Company, a
Delaware and Virginia corporation (the "Company"), of certain obligations
for the benefit of the holders of the Preferred Securities; and (iii) the
issuance and sale to the Trust by the Company of up to $70 million in aggregate
principal amount of the Company's Junior Subordinated Debentures (the
"Debentures"), pursuant to the terms of an indenture from the Company to
Wilmington Trust Company, as trustee (the "Indenture"), as contemplated in the
Registration Statement on Form S-3 (the "Registration Statement") to be filed by
the Company and the Trust on or about the date hereof with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, the corporate
proceedings and other actions taken by the Company have been reviewed by me or
taken under my advice and direction as General Counsel.
I am of the opinion that:
1. All requisite action necessary to make the Guarantee a valid, legal and
binding obligation of the Company will have been taken when (a) the Delaware
Public Service Commission and the Virginia State Corporation Commission shall
have entered appropriate orders approving the Guarantee; (b) the Registration
Statement, as it may be amended, with
<PAGE>
Delmarva Power & Light Company
June 27, 1996
Page 2
respect to the Guarantee shall have become effective; (c) the Board of
Directors of the Company, or a Committee of the Board of Directors of the
Company, or, to the extent properly delegated by either of them, a proper
officer of the Company, shall have taken such action as may be necessary to
fix and determine the terms of the Guarantee; and (d) the Guarantee shall
have been duly executed and delivered; and
2. All requisite action necessary to make the Debentures valid, legal and
binding obligations of the Company will have been taken when (a) the
Delaware Public Service Commission and the Virginia State Corporation
Commission shall have entered appropriate orders approving the issuance of
the Debentures; (b) the Registration Statement, as it may be amended, with
respect to the Debentures shall have become effective; (c) the Board of
Directors of the Company, or a Committee of the Board of Directors of the
Company, or, to the extent properly delegated by either of them, a proper
officer of the Company shall have taken such action as may be necessary to
fix and determine the terms of the Debentures; (d) the Indenture shall have
been executed and delivered; (e) the Debentures shall have been issued in
accordance with (i) such Orders of such Commissions, (ii) the description
thereof in the Registration Statement (iii) the authority granted by the
Board of Directors or a Committee of the Board of Directors, and (iv) the
terms and conditions of the Indenture; and (f) the Debentures shall have
been paid for and delivered to the Trust;
in each case, except as such may be limited by bankruptcy, insolvency or other
laws affecting creditors' rights generally and by general principles of equity.
To the extent that matters addressed in this opinion are governed by
Virginia Law, I have relied on the accompanying opinion of the Company's
Assistant General Counsel, Peter F. Clark, dated June 27, 1996.
I hereby authorize and consent to the use of this opinion as an exhibit to
the Company's Registration Statement and to any references to me in the
Registration Statement and the Prospectus constituting a part thereof.
Very truly yours,
/s/ DALE G. STOODLEY
Dale G. Stoodley
<PAGE>
[DELMARVA POWER & LIGHT COMPANY LETTERHEAD APPEARS HERE]
EXHIBIT 5-B
June 27, 1996
Dale G. Stoodley, Esquire
Delmarva Power & Light Company
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
Re: Registration of Trust Preferred Capital Securities
a Guarantee and Junior Subordinated Debentures
----------------------------------------------
Dear Mr. Stoodley:
In connection with proposed registration of (i) Trust Preferred Capital
Securities ("Preferred Securities") of Delmarva Power Financing I, a Delaware
business trust (the "Trust"), which Preferred Securities have an aggregate
liquidation amount of up to $70 million and are to be offered in an underwritten
public offering; and (ii) a Guarantee by Delmarva Power & Light Company, a
Delaware and Virginia corporation (the "Company"), of certain obligations for
the benefit of the holders of the Preferred Securities; and (iii) the issuance
and sale to the Trust by the Company of up to $70 million in aggregate principal
amount of the Company's Junior Subordinated Debentures (the "Debentures"),
pursuant to the terms of an indenture from the Company to Wilmington Trust
Company, as trustee (the "Indenture"), as contemplated in the Registration
Statement on Form S-3 (the "Registration Statement") to be filed by the Company
and the Trust on or about the date hereof with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, the corporate
proceedings and other actions taken by the Company have been reviewed by me or
taken under my advice and direction as Assistant General Counsel.
I am of the opinion, but only to the extent that the matters
addressed in this opinion are governed by Virginia law, that:
1. All requisite action necessary to make the Guarantee a valid, legal and
binding obligation of the Company will have been taken when (a) the Delaware
Public Service Commission
<PAGE>
Delmarva Power & Light Company
June 27, 1996
Page 2
and the Virginia State Corporation Commission shall have entered
appropriate orders approving the Guarantee; (b) the Registration Statement,
as it may be amended, with respect to the Guarantee shall have become
effective; (c) the Board of Directors of the Company, or a Committee of the
Board of Directors of the Company, or, to the extent properly delegated by
either of them, a proper officer of the Company, shall have taken such
action as may be necessary to fix and determine the terms of the Guarantee;
and (d) the Guarantee shall have been duly executed and delivered; and
2. All requisite action necessary to make the Debenture valid, legal and
binding obligations of the Company will have been taken when (a) the
Delaware Public Service Commission and the Virginia State Corporation
Commission shall have entered appropriate orders approving the issuance of
the Debentures; (b) the Registration Statement, as it may be amended, with
respect to the Debentures shall have become effective; (c) the Board of
Directors of the Company, or, a Committee of the Board of Directors of the
Company, or, to the extent properly delegated by either of them, a proper
officer of the Company shall have taken such action as may be necessary to
fix and determine the terms of the Debentures; (d) the Indenture shall have
been executed and delivered; (e) the Debentures shall have been issued in
accordance with (i) such Orders of such Commissions, (ii) the description
thereof in the Registration Statement (iii) the authority granted by the
Board of Directors or a Committee of the Board of Directors, and (iv) the
terms and conditions of the Indenture; and (f) the Debentures shall have
been paid for and delivered to the Trust;
in each case, except as such may be limited by bankruptcy, insolvency or other
laws affecting creditors' rights generally and by general principles of equity.
I hereby consent to the use of this opinion as an exhibit to the Company's
Registration Statement and to the use of my name therein.
Very truly yours,
/s/ PETER F. CLARK
Peter F. Clark
<PAGE>
EXHIBIT 5-C
Richards Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
June 28, 1996
Delmarva Power Financing I
c/o Delmarva Power & Light Company
800 King Street
Wilmington, Delaware 19899
Re: Delmarva Power Finaning I
-------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Delmarva Power & Light
Company, a Delaware and Virginia corporation (the "Company"), and Delmarva Power
Finanaing I, a Delaware business trust (the "Trust"), in connection with the
matters set forth herein. At your request, this opinion is being furnished to
you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of June 27, 1996
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on June 27, 1996;
(b) The Trust Agreement of the Trust, dated as of June 27, 1996, among
the Company, as Depositor, and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on Form
S-3, including a preliminary prospectus (the "Prospectus") relating to the ___%
Trust Preferred Capital Securities of the Trust representing preferred undivided
beneficial interests in the assets of the Trust (each, a "Preferred Security"
and collectively, the "Preferred Securities"), as proposed to be filed by the
Company and the Trust with the Securities and Exchange Commission on or about
June 28, 1996;
<PAGE>
Delmarva Power Financing I
June 28, 1996
Page 2
(d) A form of Amended and Restated Trust Agreement of the Trust, to be
entered into among the Company, as Depositor, the trustees of the Trust named
therein, and the holders, from time to time, of undivided beneficial interests
in the assets of the Trust (including Exhibits A, B and D thereto) (the "Trust
Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated June 28, 1996,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular,
we have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
creation or due organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents examined by us under
the laws of the jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are parties to the documents
examined by us, (iv) that each of the parties to the documents examined by us
has the power and authority to execute and deliver, and to perform
<PAGE>
Delmarva Power Financing I
June 28, 1996
Page 3
its obligations under, such documents, (v) the due authorization, execution and
delivery by all parties thereto of all documents examined by us, (vi) the
receipt by each Person to whom a Preferred Security is to be issued by the Trust
(collectively, the "Preferred Security Holders") of a Preferred Securities
Certificate for such Preferred Security and the payment for the Preferred
Security acquired by it, in accordance with the Trust Agreement and the
Registration Statement, and (vii) that the Preferred Securities are issued and
sold to the Preferred Security Holders in accordance with the Trust Agreement
and the Registration Statement. We have not participated in the preparation of
the Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
<PAGE>
Delmarva Power Financing I
June 28, 1996
Page 4
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition,
we hereby consent to the use of our name under the heading "Legality" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
<PAGE>
EXHIBIT 8
REID & PRIEST LLP
A New York Registered Limited Liability Partnership
40 West 57th Street
New York, New York 10019-4097
Telephone 212 603-2000
Fax 212 603-2001
New York, New York
June 28, 1996
Delmarva Power & Light Company
800 King Street
Wilmington, Delaware 19899
Ladies and Gentlemen:
Reference is made to the prospectus (the"Prospectus"), which
constitutes part of the registration statement on Form S-3 ("Registration
Statement"), to be filed by Delmarva Power & Light Company and Delmarva Power
Financing I with the Securities and Exchange Commission on or about the date
hereof pursuant to the Securities Act of 1933, as amended, for the registration
of, among other things, Cumulative Trust Preferred Capital Securities
("Preferred Securities") of Delmarva Power Financing I.
We are of the opinion that the statements set forth under the
caption "Certain United States Federal Income Tax Consequences" in the
Prospectus constitute an accurate description, in general terms, of certain
United States federal income tax considerations that may be relevant to the
prospective purchasers of the Preferred Securities.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the references to us in the Prospectus under
the caption "Certain United States Federal Income Tax Consequences.
Very truly yours,
/s/ Reid & Priest LLP
<PAGE>
Exhibit 12-B
Delmarva Power & Light Company
Ratio of Earnings to Fixed Charges and Preferred Dividends
----------------------------------------------------------
(Dollars in Thousands)
----------------------
<TABLE>
<CAPTION>
(unaudited)
12 M/E
3/31/96 1995 1994 1993 1992 1991
----------- ---------- --------- --------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net income (1) $117,224 $117,488 $108,310 $111,076 $98,526 $80,506
----------- ---------- --------- --------- ------------- -----------
Income taxes (1) 76,205 75,540 67,613 67,102 54,834 43,249
----------- ---------- --------- --------- ------------- -----------
Fixed charges:
Interest on long-term debt
including amortization of
discount, premium and
expense 67,714 65,572 61,128 62,651 66,976 68,133
Other interest 10,796 10,353 9,336 9,245 8,449 10,192
----------- ---------- --------- --------- ------------- -----------
Total fixed charges 78,510 75,925 70,464 71,896 75,425 78,325
----------- ---------- --------- --------- ------------- -----------
Nonutility capitalized interest (305) (304) (256) (246) (231) (143)
----------- ---------- --------- --------- ------------- -----------
Earnings before income taxes
and fixed charges $271,634 $268,649 $246,131 $249,828 $228,554 $201,937
=========== ========== ========= ========= ============= ===========
Fixed charges $78,510 $75,925 $70,464 $71,896 $75,425 $78,325
Preferred dividend requirements 15,930 16,185 15,948 14,803 15,785 11,672
----------- ---------- --------- --------- ------------- -----------
$94,440 $92,110 $86,412 $86,699 $91,210 $89,997
=========== ========== ========= ========= ============= ===========
Ratio of earnings to fixed charges
and preferred dividends 2.88 2.92 2.85 2.88 2.51 2.24
</TABLE>
For purposes of computing the ratio, earnings are net income plus income taxes
and fixed charges, less nonutility capitalized interest. Fixed charges consist
of interest on long- and short-term debt, amortization of debt discount,
premium, and expense, plus the interest factor associated with the Company's
major leases, and one-third of the remaining annual rentals. Preferred dividend
requirements represent annualized preferred dividend requirements multiplied by
the ratio that pre-tax income bears to net income.
(1) Net income and income taxes related to the cumulative effect of a change in
accounting for unbilled revenues recorded in 1991 are excluded from the
computation of this ratio.
<PAGE>
EXHIBIT 23-A
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of Delmarva Power & Light Company on Form S-3 of our report dated
February 2, 1996, except as to the information presented under the caption Salem
Outage in Note 16, for which the date is February 26, 1996, on our audits of the
consolidated financial statements of Delmarva Power & Light Company and its
subsidiary companies as of December 31, 1995 and 1994 and for each of the three
years in the period ended December 31, 1995, as listed in Item 14(a) of the 1995
Annual Report of Delmarva Power & Light Company on Form 10-K. We also consent to
the reference to our firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
June 27, 1996
<PAGE>
Exhibit 25-A
Registration No.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) ___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
DELMARVA POWER & LIGHT COMPANY
DELMARVA POWER FINANCING I
(Exact name of obligor as specified in its charter)
Delaware and Virginia 51-0084283
Delaware To Be Applied For
(State of incorporation) (I.R.S. employer identification no.)
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
(Address of principal executive offices) (Zip Code)
Delmarva Power Financing I Trust Preferred Capital Securities
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee
and upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 20th day
of June, 1996.
WILMINGTON TRUST COMPANY
[SEAL]
Attest:/s/ Mary C. St. Amand By: /s/ John M. Beeson, Jr.
----------------------------- -------------------------
Assistant Secretary Name: John M. Beeson, Jr.
Title: Vice President
<PAGE>
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE>
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is WILMINGTON TRUST COMPANY whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate
<PAGE>
and property, and to appoint such officers and agents as the business
of the Corporation shall require, to make by-laws not inconsistent
with the Constitution or laws of the United States or of this State,
to discount bills, notes or other evidences of debt, to receive
deposits of money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of exchange, and
generally to use, exercise and enjoy all the powers, rights,
privileges and franchises incident to a corporation which are proper
or necessary for the transaction of the business of the Corporation
hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage,
2
<PAGE>
bond or other instrument issued by any state, municipality, body
politic, corporation, association or person, either alone or in
conjunction with any other person or persons, corporation or
corporations.
(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit, order,
or decree to be entered in any court of record within the State of
Delaware or elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of Delaware or
elsewhere.
(9) To act by any and every method of appointment as trustee, trustee
in bankruptcy, receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and all estates and
property, real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations, contracts
and evidences of indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or of the
Government of the United States, or of any state,
3
<PAGE>
territory, colony, or possession thereof, or of any foreign government
or country; to receive, collect, receipt for, and dispose of interest,
dividends and income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property held and owned
by it, and to exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property, any and all
the rights, powers and privileges of individual owners thereof,
including the right to vote thereon; to invest and deal in and with
any of the moneys of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to time to vary
or realize such investments; to issue bonds and secure the same by
pledges or deeds of trust or mortgages of or upon the whole or any
part of the property held or owned by the Corporation, and to sell and
pledge such bonds, as and when the Board of Directors shall determine,
and in the promotion of its said corporate business of investment and
to the extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and personal
property of any name and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that the
said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
4
<PAGE>
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount, execute
and issue promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or restricted
by reference to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the objects,
purposes and powers specified in each of the clauses of this paragraph
shall be regarded as independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article FOURTH, the Board of Directors of the
5
<PAGE>
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of stock and whether such dividends
shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a
6
<PAGE>
class, to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any one or
more series of Preferred Stock or under such circumstances and on such
conditions as the Board of Directors may determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article FOURTH), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article FOURTH), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article FOURTH), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held by them
respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article FOURTH, each holder
of Common Stock shall have one vote in respect of each share of Common
Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable for stock
of the Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized
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issue of shares of any class or series of stock or securities convertible
into or exchangeable for stock, or carrying any right to purchase stock,
may be issued and disposed of pursuant to resolution of the Board of
Directors to such persons, firms, corporations or associations, whether
such holders or others, and upon such terms as may be deemed advisable by
the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article FOURTH and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided, however, that
the Board of Directors may provide in the resolution or resolutions as to
any series of Preferred Stock adopted pursuant to section (b) of this
Article FOURTH that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of
such series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not
8
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less than five nor more than twenty-five as fixed from time to time by vote
of a majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any director at
the time in office, and provided further, that the number of directors
constituting the whole Board shall be twenty-four until otherwise fixed by
a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the
Board of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders
shall elect a successor to such director to hold office until the next
election of the class for which such director shall have been chosen and
until his successor shall be elected and qualified. No decrease in the
number of directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the Corporation may be removed at any time
without cause, but only by the affirmative vote of the holders of two-
thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) cast at a meeting of the
stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days'
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notice of the meeting is given to stockholders, such written notice shall
be delivered or mailed, as prescribed, to the Secretary of the Corporation
not later than the close of the seventh day following the day on which
notice of the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the Chairman
on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
SIXTH: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
SEVENTH: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
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ELEVENTH: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be from time
to time designated by them.
FIFTEENTH: - (a) In addition to any affirmative vote required by law, and
except as otherwise expressly provided in sections (b) and (c) of this
Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
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<PAGE>
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article FIFTEENTH shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation of
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such business combination, or
immediately prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
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(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect in
December 31,
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1981) is owned, directly or indirectly, by the Corporation; provided,
however, that for the purposes of the definition of Investment Stockholder
set forth in paragraph (2) of this section (c), the term "Subsidiary" shall
mean only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article FIFTEENTH on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,00,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON FEBRUARY 21, 1991
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10 days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall be held on the
third Thursday of each month at the principal office
<PAGE>
of the Company, or at such other place and time as may be designated by the
Board of Directors, the Chairman of the Board, or the President.
Section 6. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board of Directors or by the President, and shall be
called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its election
by the stockholders shall appoint an Executive Committee, a Trust Committee, an
Audit Committee and a Compensation Committee, and shall elect from its own
members a Chairman of the Board of Directors and a President who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Treasurer, who may be the same person, may appoint at any time such other
committees and elect or appoint such other officers as it may deem advisable.
The Board of Directors may also elect at such meeting one or more Associate
Directors.
Section 11. The Board of Directors may at any time remove, with or without
cause, any member of any Committee appointed by it or any associate director or
officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
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ARTICLE III
COMMITTEES
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than
nine members who shall be selected by the Board of Directors from its own
members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the
Board of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office
of the Company or elsewhere in its discretion at least once a week in each week
the Board is not regularly scheduled to meet. A majority of its members shall be
necessary to constitute a quorum for the transaction of business. Special
meetings of the Executive Committee may be held at any time when a quorum is
present.
(D) Minutes of each meeting of the Executive Committee shall
be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of the Company
by its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall
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be subject to implementation by Resolutions of the Board of Directors presently
existing or hereafter passed from time to time for that purpose, and any
provisions of these By-Laws(other than this Section) and any resolutions which
are contrary to the provisions of this Section or to the provisions of any such
implementary Resolutions shall be suspended during such a disaster period until
it shall be determined by any interim Executive Committee acting under this
section that it shall be to the advantage of the Company to resume the conduct
and management of its affairs and business under all of the other provisions of
these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than
thirteen members who shall be selected by the Board of Directors, a majority of
whom shall be members of the Board of Directors and who shall hold office during
the pleasure of the Board.
(B) The Trust Committee shall have general supervision over
the Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of
the Company or elsewhere in its discretion at least once a month. A majority of
its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Trust Committee may be held at any time when a
quorum is present.
(D) Minutes of each meeting of the Trust Committee shall be
kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who
shall be selected by the Board of Directors from its own members, none of whom
shall be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over
the Audit Division in all matters however subject to the approval of the Board
of Directors; it shall consider all matters brought to its attention by the
officer in charge of the
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Audit Division, review all reports of examination of the Company made by any
governmental agency or such independent auditor employed for that purpose, and
make such recommendations to the Board of Directors with respect thereto or with
respect to any other matters pertaining to auditing the Company as it shall deem
desirable.
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more
than five (5) members who shall be selected by the Board of Directors from its
own members who are not officers of the Company and who shall hold office during
the pleasure of the Board.
(B) The Compensation Committee shall in general advise upon
all matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at
any time by the Chairman of the Compensation Committee, the Chairman of the
Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by
the Board of Directors as an associate director, to serve during the pleasure of
the Board.
(B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting
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and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absence or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 3. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 4. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 5. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 6. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian
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of and responsible for all monies, funds and valuables of the Company and for
the keeping of proper records of the evidence of property or indebtedness and of
all the transactions of the Company. He shall have general supervision of the
expenditures of the Company and shall report to the Board of Directors at each
regular meeting of the condition of the Company, and perform such other duties
as may be assigned to him from time to time by the Board of Directors of the
Executive Committee.
Section 7. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 8. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 9. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 10. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the President
or any Vice President, however denominated by the
7
<PAGE>
Board of Directors and countersigned by the Secretary or Treasurer or an
Assistant Secretary, and the seal of the corporation shall be engraved thereon.
Each certificate shall recite that the stock represented thereby is
transferrable only upon the books of the Company by the holder thereof or his
attorney, upon surrender of the certificate properly endorsed. Any certificate
of stock surrendered to the Company shall be cancelled at the time of transfer,
and before a new certificate or certificates shall be issued in lieu thereof.
Duplicate certificates of stock shall be issued only upon giving such security
as may be satisfactory to the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words "Wilmington Trust
Company" within the inner circle the words "Wilmington,
Delaware."
8
<PAGE>
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice President,
however denominated by the Board of Directors, shall have full power and
authority to enter into, make, sign, execute, acknowledge and/or deliver and the
Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
9
<PAGE>
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
-------- -------
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In any
such action the Corporation shall have the burden of proving that the claimant
was not entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statute, provision of the Charter or Act of Incorporation,
these By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(E) Any repeal or modification of the foregoing provisions of
this Article X shall not adversely affect any right or protection hereunder of
any person in respect of any act or omission occurring prior to the time of such
repeal or modification.
10
<PAGE>
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
11
<PAGE>
EXHIBIT C
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: June 20, 1996 By: /s/ John M. Beeson, Jr.
-----------------------
Name: John M. Beeson, Jr.
Title: Vice President
<PAGE>
EXHIBIT "D"
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has
not been approved by any state banking authorities. Refer
to your appropriate state banking authorities for your
state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ------------------------------------------ --------------
Name of Bank City
in the State of DELAWARE, at the close of business on March 31, 1996.
--------
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins.............................. 198,158
Interest-bearing balances........................................................ 0
Held-to-maturity securities........................................................... 536,638
Available-for-sale securities......................................................... 862,050
Federal funds sold.................................................................... 82,000
Securities purchased under agreements to resell....................................... 25,000
Loans and lease financing receivables:
Loans and leases, net of unearned income............ 3,404,372
LESS: Allowance for loan and lease losses.......... 48,153
LESS: Allocated transfer risk reserve.............. 0
Loans and leases, net of unearned income, allowance, and reserve................. 3,356,219
Assets held in trading accounts....................................................... 0
Premises and fixed assets (including capitalized leases).............................. 76,915
Other real estate owned............................................................... 16,314
Investments in unconsolidated subsidiaries and associated companies................... 146
Customers' liability to this bank on acceptances outstanding.......................... 0
Intangible assets..................................................................... 4,403
Other assets.......................................................................... 107,240
Total assets.......................................................................... 5,265,083
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices................................................... 3,450,823
Noninterest-bearing.................... 689,843
Interest-bearing....................... 2,760,980
Federal funds purchased............................................... 99,885
Securities sold under agreements to repurchase........................ 198,506
Demand notes issued to the U.S. Treasury.............................. 38,856
Trading liabilities................................................... 0
Other borrowed money:................................................. ///////
With original maturity of one year or less....................... 930,611
With original maturity of more than one year..................... 28,000
Mortage indebtedness and obligations under capitalized leases......... 0
Bank's liability on acceptances executed and outstanding.............. 0
Subordinated notes and debentures..................................... 0
Other liabilities..................................................... 100,832
Total liabilities..................................................... 4,847,513
Limited-life preferred stock and related surplus...................... 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus......................... 0
Common Stock.......................................................... 500
Surplus............................................................... 62,118
Undivided profits and capital reserves................................ 354,791
Net unrealized holding gains (losses) on available-for-sale securities 161
Total equity capital.................................................. 417,570
Total liabilities, limited-life preferred stock, and equity capital... 5,265,083
</TABLE>
2
<PAGE>
Exhibit 25-B
Registration No.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) ___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
DELMARVA POWER & LIGHT COMPANY
(Exact name of obligor as specified in its charter)
Delaware and Virginia 51-0084283
(State of incorporation) (I.R.S. employer identification no.)
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
(Address of principal executive offices) (Zip Code)
Junior Subordinated Debentures, Series ____
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee
and upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 20th day
of June, 1996.
WILMINGTON TRUST COMPANY
[SEAL]
Attest:/s/ Mary C. St. Amand By: /s/ John M. Beeson, Jr.
----------------------------- -------------------------
Assistant Secretary Name: John M. Beeson, Jr.
Title: Vice President
<PAGE>
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE>
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is WILMINGTON TRUST COMPANY whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common
<PAGE>
seal, and alter the seal at pleasure, to hold, purchase, convey,
mortgage or otherwise deal in real and personal estate and property,
and to appoint such officers and agents as the business of the
Corporation shall require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver bullion and
foreign coins, to buy and sell bills of exchange, and generally to
use, exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
2
<PAGE>
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit, order,
or decree to be entered in any court of record within the State of
Delaware or elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of Delaware or
elsewhere.
(9) To act by any and every method of appointment as trustee, trustee
in bankruptcy, receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and all estates and
property, real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations, contracts
and evidences of indebtedness, of any private, public or municipal
3
<PAGE>
corporation within and without the State of Delaware, or of the
Government of the United States, or of any state, territory, colony,
or possession thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations, contracts, evidences
of indebtedness and other property, any and all the rights, powers and
privileges of individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys of the
Corporation upon such securities and in such manner as it may think
fit and proper, and from time to time to vary or realize such
investments; to issue bonds and secure the same by pledges or deeds of
trust or mortgages of or upon the whole or any part of the property
held or owned by the Corporation, and to sell and pledge such bonds,
as and when the Board of Directors shall determine, and in the
promotion of its said corporate business of investment and to the
extent authorized by law, to lease, purchase, hold, sell, assign,
transfer, pledge, mortgage and convey real and personal property of
any name and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that the
said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any
4
<PAGE>
manner whatever dispose of property, real, personal or mixed, wherever
situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount, execute
and issue promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or restricted
by reference to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the objects,
purposes and powers specified in each of the clauses of this paragraph
shall be regarded as independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each
5
<PAGE>
such series, and the qualifications, limitations or restrictions thereof,
if any, may differ from those of any and all other series at any time
outstanding; and, subject to the provisions of subparagraph 1 of Paragraph
(c) of this Article FOURTH, the Board of Directors of the Corporation is
hereby expressly granted authority to fix by resolution or resolutions
adopted prior to the issuance of any shares of a particular series of
Preferred Stock, the voting powers and the designations, preferences and
relative, optional and other special rights, and the qualifications,
limitations and restrictions of such series, including, but without
limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of stock and whether such dividends
shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
6
<PAGE>
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article FOURTH), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article FOURTH), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article FOURTH), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held by them
respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article FOURTH, each holder
of Common Stock shall have one vote in respect of each share of Common
Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
7
<PAGE>
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable for stock
of the Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of stock or
securities convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms, corporations
or associations, whether such holders or others, and upon such terms as may
be deemed advisable by the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article FOURTH and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided, however, that
the Board of Directors may provide in the resolution or resolutions as to
any series of Preferred Stock adopted pursuant to section (b) of this
Article FOURTH that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of
such series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
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(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the whole
Board, provided, however, that the number of directors shall not be reduced
so as to shorten the term of any director at the time in office, and
provided further, that the number of directors constituting the whole Board
shall be twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the
Board of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders
shall elect a successor to such director to hold office until the next
election of the class for which such director shall have been chosen and
until his successor shall be elected and qualified. No decrease in the
number of directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the Corporation may be removed at any time
without cause, but only by the affirmative vote of the holders of two-
thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) cast at a meeting of the
stockholders called for
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that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of the
meeting was mailed to stockholders. Notice of nominations which are
proposed by the Board of Directors shall be given by the Chairman on behalf
of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
SIXTH: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
SEVENTH: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
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TENTH: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be from time
to time designated by them.
FIFTEENTH: - (a) In addition to any affirmative vote required by law, and
except as otherwise expressly provided in sections (b) and (c) of this
Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value
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of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article FIFTEENTH shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation of
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
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(1) A "person" shall mean any individual firm, corporation or other entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such business combination, or
immediately prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares
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deemed owned through application of paragraph (3) above but shall not
include any other Voting Shares which may be issuable pursuant to any
agreement, or upon exercise of conversion rights, warrants or options or
otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect in
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article FIFTEENTH on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,00,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act of
Incorporat ion or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
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SEVENTEENTH: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON FEBRUARY 21, 1991
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10 days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall
<PAGE>
be held on the third Thursday of each month at the principal office of the
Company, or at such other place and time as may be designated by the Board of
Directors, the Chairman of the Board, or the President.
Section 6. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board of Directors or by the President, and shall be
called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its election
by the stockholders shall appoint an Executive Committee, a Trust Committee, an
Audit Committee and a Compensation Committee, and shall elect from its own
members a Chairman of the Board of Directors and a President who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Treasurer, who may be the same person, may appoint at any time such other
committees and elect or appoint such other officers as it may deem advisable.
The Board of Directors may also elect at such meeting one or more Associate
Directors.
Section 11. The Board of Directors may at any time remove, with or without
cause, any member of any Committee appointed by it or any associate director or
officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
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ARTICLE III
COMMITTEES
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than
nine members who shall be selected by the Board of Directors from its own
members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the
Board of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office
of the Company or elsewhere in its discretion at least once a week in each week
the Board is not regularly scheduled to meet. A majority of its members shall
be necessary to constitute a quorum for the transaction of business. Special
meetings of the Executive Committee may be held at any time when a quorum is
present.
(D) Minutes of each meeting of the Executive Committee shall
be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of the Company
by its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section.
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This By-Law shall be subject to implementation by Resolutions of the Board of
Directors presently existing or hereafter passed from time to time for that
purpose, and any provisions of these By-Laws(other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during such a
disaster period until it shall be determined by any interim Executive Committee
acting under this section that it shall be to the advantage of the Company to
resume the conduct and management of its affairs and business under all of the
other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than
thirteen members who shall be selected by the Board of Directors, a majority of
whom shall be members of the Board of Directors and who shall hold office during
the pleasure of the Board.
(B) The Trust Committee shall have general supervision over
the Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of
the Company or elsewhere in its discretion at least once a month. A majority of
its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Trust Committee may be held at any time when
a quorum is present.
(D) Minutes of each meeting of the Trust Committee shall be
kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who
shall be selected by the Board of Directors from its own members, none of whom
shall be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over
the Audit Division in all matters however subject to the approval of the Board
of Directors; it shall consider all matters brought to its attention by the
officer in
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charge of the Audit Division, review all reports of examination of the Company
made by any governmental agency or such independent auditor employed for that
purpose, and make such recommendations to the Board of Directors with respect
thereto or with respect to any other matters pertaining to auditing the Company
as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more
than five (5) members who shall be selected by the Board of Directors from its
own members who are not officers of the Company and who shall hold office during
the pleasure of the Board.
(B) The Compensation Committee shall in general advise upon
all matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at
any time by the Chairman of the Compensation Committee, the Chairman of the
Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by
the Board of Directors as an associate director, to serve during the pleasure of
the Board.
(B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws
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of this Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absence or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 3. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 4. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 5. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
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Section 6. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 7. There may be a Controller who shall exercise general
supervision over the internal operation of the Company, including accounts, and
shall render to the Board of Directors at appropriate times a report relating to
the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 8. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 9. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 10. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the
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books of the Company and a transfer book shall be kept in which all transfers of
stock shall be recorded.
Section 2. Certificate of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall recite
that the stock represented thereby is transferrable only upon the books of the
Company by the holder thereof or his attorney, upon surrender of the certificate
properly endorsed. Any certificate of stock surrendered to the Company shall be
cancelled at the time of transfer, and before a new certificate or certificates
shall be issued in lieu thereof. Duplicate certificates of stock shall be
issued only upon giving such security as may be satisfactory to the Board of
Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words "Wilmington Trust
Company" within the inner circle the words "Wilmington,
Delaware."
8
<PAGE>
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice President,
however denominated by the Board of Directors, shall have full power and
authority to enter into, make, sign, execute, acknowledge and/or deliver and the
Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
9
<PAGE>
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
-------- -------
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In
any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses under applicable law.
(D) The rights conferred on any person by this Article X shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statute, provision of the Charter or Act of Incorporation,
these By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(E) Any repeal or modification of the foregoing provisions of
this Article X shall not adversely affect any right or protection hereunder of
any person in respect of any act or omission occurring prior to the time of such
repeal or modification.
10
<PAGE>
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
11
<PAGE>
EXHIBIT C
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: June 20, 1996 By: /s/ John M. Beeson, Jr.
--------------------------
Name: John M. Beeson, Jr.
Title: Vice President
<PAGE>
EXHIBIT "D"
NOTICE
This form is intended to assist state nonmember banks
and savings banks with state publication
requirements. It has not been approved by any state
banking authorities. Refer to your appropriate state
banking authorities for your state publication
requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ------------------------------------------ -----------------
Name of Bank City
in the State of DELAWARE , at the close of business on March 31, 1996.
------------
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
<S> <C>
Noninterest-bearing balances and currency and coins................ 198,158
Interest-bearing balances.......................................... 0
Held-to-maturity securities............................................. 536,638
Available-for-sale securities........................................... 862,050
Federal funds sold...................................................... 82,000
Securities purchased under agreements to resell......................... 25,000
Loans and lease financing receivables:
Loans and leases, net of unearned income............... 3,404,372
LESS: Allowance for loan and lease losses............. 48,153
LESS: Allocated transfer risk reserve................. 0
Loans and leases, net of unearned income, allowance, and reserve... 3,356,219
Assets held in trading accounts......................................... 0
Premises and fixed assets (including capitalized leases)................ 76,915
Other real estate owned................................................. 16,314
Investments in unconsolidated subsidiaries and associated companies..... 146
Customers' liability to this bank on acceptances outstanding............ 0
Intangible assets....................................................... 4,403
Other assets............................................................ 107,240
Total assets............................................................ 5,265,083
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices..................................................... 3,450,823
Noninterest-bearing........................ 689,843
Interest-bearing...........................2,760,980
Federal funds purchased................................................. 99,885
Securities sold under agreements to repurchase.......................... 198,506
Demand notes issued to the U.S. Treasury................................ 38,856
Trading liabilities..................................................... 0
Other borrowed money:................................................... ///////
With original maturity of one year or less......................... 930,611
With original maturity of more than one year....................... 28,000
Mortgage indebtedness and obligations under capitalized leases.......... 0
Bank's liability on acceptances executed and outstanding................ 0
Subordinated notes and debentures....................................... 0
Other liabilities....................................................... 100,832
Total liabilities....................................................... 4,847,513
Limited-life preferred stock and related surplus........................ 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus........................... 0
Common Stock............................................................ 500
Surplus................................................................. 62,118
Undivided profits and capital reserves.................................. 354,791
Net unrealized holding gains (losses) on available-for-sale securities.. 161
Total equity capital.................................................... 417,570
Total liabilities, limited-life preferred stock, and equity capital..... 5,265,083
</TABLE>
2
<PAGE>
Exhibit 25.C
REGISTRATION NO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) ___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
DELMARVA POWER & LIGHT COMPANY
(Exact name of obligor as specified in its charter)
Delaware and Virginia 51-0084283
(State of incorporation) (I.R.S. employer identification no.)
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
(Address of principal executive offices) (Zip Code)
Guarantee with respect to Delmarva Power Financing I Trust
Preferred Capital Securities and Delmarva Power & Light
obligations with respect to such Preferred Securities under
an Indenture, an Amended and Restated Trust Agreement
and an Agreement as to Expenses and Liabilities
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee
and upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 20th day
of June, 1996.
WILMINGTON TRUST COMPANY
[SEAL]
Attest:/s/ Mary C. St. Amand By: /s/ John M. Beeson, Jr.
----------------------------- -------------------------
Assistant Secretary Name: John M. Beeson, Jr.
Title: Vice President
<PAGE>
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE>
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is WILMINGTON TRUST COMPANY whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate
<PAGE>
and property, and to appoint such officers and agents as the business
of the Corporation shall require, to make by-laws not inconsistent
with the Constitution or laws of the United States or of this State,
to discount bills, notes or other evidences of debt, to receive
deposits of money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of exchange, and
generally to use, exercise and enjoy all the powers, rights,
privileges and franchises incident to a corporation which are proper
or necessary for the transaction of the business of the Corporation
hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage,
2
<PAGE>
bond or other instrument issued by any state, municipality, body
politic, corporation, association or person, either alone or in
conjunction with any other person or persons, corporation or
corporations.
(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment, suit, order,
or decree to be entered in any court of record within the State of
Delaware or elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of Delaware or
elsewhere.
(9) To act by any and every method of appointment as trustee, trustee
in bankruptcy, receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and all estates and
property, real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations, contracts
and evidences of indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or of the
Government of the United States, or of any state,
3
<PAGE>
territory, colony, or possession thereof, or of any foreign government
or country; to receive, collect, receipt for, and dispose of interest,
dividends and income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property held and owned
by it, and to exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property, any and all
the rights, powers and privileges of individual owners thereof,
including the right to vote thereon; to invest and deal in and with
any of the moneys of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to time to vary
or realize such investments; to issue bonds and secure the same by
pledges or deeds of trust or mortgages of or upon the whole or any
part of the property held or owned by the Corporation, and to sell and
pledge such bonds, as and when the Board of Directors shall determine,
and in the promotion of its said corporate business of investment and
to the extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and personal
property of any name and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that the
said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
4
<PAGE>
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount, execute
and issue promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or restricted
by reference to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the objects,
purposes and powers specified in each of the clauses of this paragraph
shall be regarded as independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article FOURTH, the Board of Directors of the
5
<PAGE>
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of stock and whether such dividends
shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a
6
<PAGE>
class, to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any one or
more series of Preferred Stock or under such circumstances and on such
conditions as the Board of Directors may determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article FOURTH), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article FOURTH), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article FOURTH), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held by them
respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article FOURTH, each holder
of Common Stock shall have one vote in respect of each share of Common
Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable for stock
of the Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized
7
<PAGE>
issue of shares of any class or series of stock or securities convertible
into or exchangeable for stock, or carrying any right to purchase stock,
may be issued and disposed of pursuant to resolution of the Board of
Directors to such persons, firms, corporations or associations, whether
such holders or others, and upon such terms as may be deemed advisable by
the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article FOURTH and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided, however, that
the Board of Directors may provide in the resolution or resolutions as to
any series of Preferred Stock adopted pursuant to section (b) of this
Article FOURTH that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of
such series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not
8
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less than five nor more than twenty-five as fixed from time to time by vote
of a majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any director at
the time in office, and provided further, that the number of directors
constituting the whole Board shall be twenty-four until otherwise fixed by
a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the
Board of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders
shall elect a successor to such director to hold office until the next
election of the class for which such director shall have been chosen and
until his successor shall be elected and qualified. No decrease in the
number of directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the Corporation may be removed at any time
without cause, but only by the affirmative vote of the holders of two-
thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) cast at a meeting of the
stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days'
9
<PAGE>
notice of the meeting is given to stockholders, such written notice shall
be delivered or mailed, as prescribed, to the Secretary of the Corporation
not later than the close of the seventh day following the day on which
notice of the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the Chairman
on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
SIXTH: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
SEVENTH: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
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ELEVENTH: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
FOURTEENTH: - Meetings of the Directors may be held outside of the State of
Delaware at such places as may be from time to time designated by the
Board, and the Directors may keep the books of the Company outside of the
State of Delaware at such places as may be from time to time designated by
them.
FIFTEENTH: - (a) In addition to any affirmative vote required by law, and
except as otherwise expressly provided in sections (b) and (c) of this
Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
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<PAGE>
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article FIFTEENTH shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation of
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such business combination, or
immediately prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
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(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect in
December 31,
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1981) is owned, directly or indirectly, by the Corporation; provided,
however, that for the purposes of the definition of Investment Stockholder set
forth in paragraph (2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity security is
owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article FIFTEENTH on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,00,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON FEBRUARY 21, 1991
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10 days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors shall be
as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall be held on the
third Thursday of each month at the principal office
<PAGE>
of the Company, or at such other place and time as may be designated by the
Board of Directors, the Chairman of the Board, or the President.
Section 6. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board of Directors or by the President, and shall be
called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its election
by the stockholders shall appoint an Executive Committee, a Trust Committee, an
Audit Committee and a Compensation Committee, and shall elect from its own
members a Chairman of the Board of Directors and a President who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Treasurer, who may be the same person, may appoint at any time such other
committees and elect or appoint such other officers as it may deem advisable.
The Board of Directors may also elect at such meeting one or more Associate
Directors.
Section 11. The Board of Directors may at any time remove, with or without
cause, any member of any Committee appointed by it or any associate director or
officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in charge
of such of the departments or division of the Company as it may deem advisable.
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ARTICLE III
COMMITTEES
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than
nine members who shall be selected by the Board of Directors from its own
members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the
Board of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office
of the Company or elsewhere in its discretion at least once a week in each week
the Board is not regularly scheduled to meet. A majority of its members shall be
necessary to constitute a quorum for the transaction of business. Special
meetings of the Executive Committee may be held at any time when a quorum is
present.
(D) Minutes of each meeting of the Executive Committee shall be
kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of the Company
by its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall
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be subject to implementation by Resolutions of the Board of Directors presently
existing or hereafter passed from time to time for that purpose, and any
provisions of these By-Laws(other than this Section) and any resolutions which
are contrary to the provisions of this Section or to the provisions of any such
implementary Resolutions shall be suspended during such a disaster period until
it shall be determined by any interim Executive Committee acting under this
section that it shall be to the advantage of the Company to resume the conduct
and management of its affairs and business under all of the other provisions of
these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than
thirteen members who shall be selected by the Board of Directors, a majority of
whom shall be members of the Board of Directors and who shall hold office during
the pleasure of the Board.
(B) The Trust Committee shall have general supervision over the
Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of
the Company or elsewhere in its discretion at least once a month. A majority of
its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Trust Committee may be held at any time when a
quorum is present.
(D) Minutes of each meeting of the Trust Committee shall be
kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who
shall be selected by the Board of Directors from its own members, none of whom
shall be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the
Audit Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the
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Audit Division, review all reports of examination of the Company made by any
governmental agency or such independent auditor employed for that purpose, and
make such recommendations to the Board of Directors with respect thereto or with
respect to any other matters pertaining to auditing the Company as it shall deem
desirable.
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more
than five (5) members who shall be selected by the Board of Directors from its
own members who are not officers of the Company and who shall hold office during
the pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any
time by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by
the Board of Directors as an associate director, to serve during the pleasure of
the Board.
(B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting
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and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absence or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The President shall have the powers and duties pertaining to the
office of the President conferred or imposed upon him by statute or assigned to
him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 3. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 4. There may be one or more Vice Presidents, however denominated by
the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 5. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 6. The Treasurer shall have general supervision over all assets and
liabilities of the Company. He shall be custodian
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of and responsible for all monies, funds and valuables of the Company and for
the keeping of proper records of the evidence of property or indebtedness and of
all the transactions of the Company. He shall have general supervision of the
expenditures of the Company and shall report to the Board of Directors at each
regular meeting of the condition of the Company, and perform such other duties
as may be assigned to him from time to time by the Board of Directors of the
Executive Committee.
Section 7. There may be a Controller who shall exercise general supervision
over the internal operations of the Company, including accounting, and shall
render to the Board of Directors at appropriate times a report relating to the
general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 8. The officer designated by the Board of Directors to be in charge
of the Audit Division of the Company with such title as the Board of Directors
shall prescribe, shall report to and be directly responsible only to the Board
of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 9. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 10. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the President
or any Vice President, however denominated by the
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Board of Directors and countersigned by the Secretary or Treasurer or an
Assistant Secretary, and the seal of the corporation shall be engraved thereon.
Each certificate shall recite that the stock represented thereby is
transferrable only upon the books of the Company by the holder thereof or his
attorney, upon surrender of the certificate properly endorsed. Any certificate
of stock surrendered to the Company shall be cancelled at the time of transfer,
and before a new certificate or certificates shall be issued in lieu thereof.
Duplicate certificates of stock shall be issued only upon giving such security
as may be satisfactory to the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
8
<PAGE>
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice President,
however denominated by the Board of Directors, shall have full power and
authority to enter into, make, sign, execute, acknowledge and/or deliver and the
Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
9
<PAGE>
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
-------- -------
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In any
such action the Corporation shall have the burden of proving that the claimant
was not entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statute, provision of the Charter or Act of Incorporation,
these By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(E) Any repeal or modification of the foregoing provisions of
this Article X shall not adversely affect any right or protection hereunder of
any person in respect of any act or omission occurring prior to the time of such
repeal or modification.
10
<PAGE>
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
11
<PAGE>
EXHIBIT C
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: June 20, 1996 By: /s/ John M. Beeson, Jr.
-----------------------
Name: John M. Beeson, Jr.
Title: Vice President
<PAGE>
EXHIBIT "D"
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has
not been approved by any state banking authorities. Refer to
your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- -------------------------------------------- ----------------------
Name of Bank City
in the State of DELAWARE , at the close of business on March 31, 1996.
------------
<TABLE>
<CAPTION>
ASSETS Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins................................................. 198,158
Interest-bearing balances........................................................................... 0
Held-to-maturity securities...................................................................................... 536,638
Available-for-sale securities.................................................................................... 862,050
Federal funds sold............................................................................................... 82,000
Securities purchased under agreements to resell.................................................................. 25,000
Loans and lease financing receivables:
Loans and leases, net of unearned income........................ 3,404,372
LESS: Allowance for loan and lease losses......................... 48,153
LESS: Allocated transfer risk reserve..................................0
Loans and leases, net of unearned income, allowance, and reserve.................................... 3,356,219
Assets held in trading accounts.................................................................................. 0
Premises and fixed assets (including capitalized leases)......................................................... 76,915
Other real estate owned.......................................................................................... 16,314
Investments in unconsolidated subsidiaries and associated companies.............................................. 146
Customers' liability to this bank on acceptances outstanding..................................................... 0
Intangible assets................................................................................................ 4,403
Other assets..................................................................................................... 107,240
Total assets..................................................................................................... 5,265,083
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
LIABILITIES
<S> <C>
Deposits:
In domestic offices.............................................................................................. 3,450,823
Noninterest-bearing............... 689,843
Interest-bearing..................2,760,980
Federal funds purchased.......................................................................................... 99,885
Securities sold under agreements to repurchase................................................................... 198,506
Demand notes issued to the U.S. Treasury......................................................................... 38,856
Trading liabilities.............................................................................................. 0
Other borrowed money:............................................................................................ ///////
With original maturity of one year or less.......................................................... 930,611
With original maturity of more than one year........................................................ 28,000
Mortgage indebtedness and obligations under capitalized leases................................................... 0
Bank's liability on acceptances executed and outstanding......................................................... 0
Subordinated notes and debentures................................................................................ 0
Other liabilities................................................................................................ 100,832
Total liabilities................................................................................................ 4,847,513
Limited-life preferred stock and related surplus................................................................. 0
EQUITY CAPITAL
<S> <C>
Perpetual preferred stock and related surplus.................................................................... 0
Common Stock..................................................................................................... 500
Surplus.......................................................................................................... 62,118
Undivided profits and capital reserves........................................................................... 354,791
Net unrealized holding gains (losses) on available-for-sale securities........................................... 161
Total equity capital............................................................................................. 417,570
Total liabilities, limited-life preferred stock, and equity capital.............................................. 5,265,083
</TABLE>
