<PAGE>
As filed with the Securities and Exchange Commission on September 15, 1998.
Registration Nos. 333-_____ and 333-_________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
Form S-3
Registration Statement
under
the Securities Act of 1933
----------------------
ATLANTIC CITY ELECTRIC COMPANY
(Exact name of Registrant as specified in its charter)
New Jersey 21-0398280
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ATLANTIC CAPITAL II
(Exact name of Registrant as specified in its charter)
----------------------
Delaware To Be Applied For
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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 and Chief Financial Officer
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
(302) 429-3448
(Name and address, including zip code, and telephone number, including area
code, of agent for service)
-----------------------
It respectfully is requested that the Commission
send copies of all notices, orders and communications to:
Vincent Pagano, Jr., Esq. Kevin Stacey, Esq.
Simpson Thacher & Bartlett Thelen Reid & Priest LLP
425 Lexington Avenue 40 West 57th Street
New York, New York 10017 New York, New York 10019
212-455-2000 212-603-2000
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. [_]
-----------------------
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed Proposed
Title of Each Maximum Maximum
Class of Amount Offering Aggregate Amount of
Securities to be Price Offering Registration
to be Registered Registered Per Unit(1) Price(1)(2) Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Atlantic Capital II Trust Preferred Capital Securities...................... 1,200,000 $25.00 $30,000,000 $8,850
Atlantic City Electric Company Guarantee with respect to Atlantic Capital II
Trust Preferred Capital Securities and obligations with respect to such
Preferred Securities under an Indenture and, an Amended and Restated Trust
Agreement(3)
Atlantic City Electric 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 Atlantic City Electric
Company Guarantee and such other obligations.
(4) The Junior Subordinated Debentures will be purchased by Atlantic Capital II
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.
================================================================================
2
<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 ______________, 1998)
1,200,000 Preferred Securities
Atlantic Capital II
% CUMULATIVE TRUST PREFERRED CAPITAL SECURITIES
(Liquidation Amount $25 per Preferred Security)
Fully and Unconditionally Guaranteed to the extent described herein by
Atlantic City Electric Company
---------------
The ____% Cumulative Trust Preferred Capital Securities (the "Preferred
Securities") offered hereby are being issued by and represent undivided
beneficial ownership interests in the assets of Atlantic Capital II ("Atlantic
Capital"), a statutory business trust created under the laws of the State of
Delaware. Atlantic City Electric Company (the "Company"), a New Jersey
corporation, will be the owner, directly or indirectly, of the undivided
beneficial interests in the assets represented by common securities of Atlantic
Capital (the "Common Securities," together with the Preferred Securities herein
referred to as the "Trust Securities"). The Bank of New York is the Property
Trustee (the "Property Trustee") of Atlantic Capital. Atlantic Capital exists
for the sole purpose of issuing the Trust Securities and investing the proceeds
thereof in ____% Junior Subordinated Debentures, Series I, Due 2028, 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 9, FOR CERTAIN INFORMATION RELEVANT TO
AN INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE PERIOD AND
CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS ON THE PREFERRED
SECURITIES MAY BE DEFERRED AND CERTAIN RELATED UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES.
Application has been made to list the Preferred Securities on the New York Stock
Exchange. Trading of the Preferred Securities on the New York Stock Exchange is
expected to commence within a thirty-day period after the date of this
Prospectus. See "Underwriting."
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions(2) Atlantic Capital(3)(4)
-------------- ---------------- ----------------------
<S> <C> <C> <C>
Per Preferred Security.. $25.00 (3) $25.00
Total................... $30,000,000 (3) $30,000,000
</TABLE>
___________
(1) Plus accrued distributions, if any, from _________, 1998.
(2) Atlantic Capital and the Company have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the "1933 Act"). See "Underwriting."
(3) In view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Subordinated Debentures, the Company
has agreed, in the Underwriting Agreement, to pay to the Underwriters, as
compensation for their services, $_____ per Preferred Security (or
$___________ in the aggregate); provided that such compensation will be
$_____ per Preferred Security sold to certain institutions. See
"Underwriting."
(4) Expenses of the offering, which are payable by the Company, are estimated to
be $_______.
---------------
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 Thelen Reid & Priest LLP, counsel for the Underwriters. It is
expected that delivery of the Preferred Securities will be made on or about
__________, 1998 through the book-entry facilities of The Depository Trust
Company against payment therefor in immediately available funds.
---------------
MORGAN STANLEY DEAN WITTER
LEGG MASON WOOD WALKER, INC.
WHEAT FIRST UNION
____________, 1998
1
<PAGE>
Holders of the Preferred Securities will be entitled to receive cumulative
cash distributions accruing from the date of original issuance and payable
quarterly in arrears on the last day of March, June, September and December of
each year, commencing December 31, 1998, 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 Atlantic Capital from which payment of Distributions on the Preferred
Securities can be made. The Company has the right to defer payments of interest
on the Subordinated Debentures by extending the interest payment period thereon
at any time or from time to time for up to 20 consecutive quarters with respect
to each deferral period (each, an "Extension Period"); provided that no such
Extension Period may extend beyond the maturity of the Subordinated Debentures.
Prior to the end of an Extension Period the Company may, and at the end of such
Extension Period the Company shall, pay all interest then accrued and unpaid
(together with interest thereon at the stated rate borne thereby, compounded
quarterly to the extent permitted by applicable law). Upon the termination of
any Extension Period and the payment of all amounts then due, including interest
on deferred interest payments, the Company may elect a new Extension Period,
subject to the above requirements. See "Description of the Subordinated
Debentures -- Option to Extend Interest Payment Period."
If interest payments on the Subordinated Debentures are deferred,
Distributions on the Preferred Securities also will be deferred and the Company
will not be permitted, to (i) declare or pay dividends or distributions on
(other than dividends or distributions paid in shares of Common Stock of the
Company) or redeem, purchase, acquire or make a liquidation payment with respect
to, any of its capital stock, or (ii) make any payment of principal of, interest
or premium, if any, on, or repay, repurchase or redeem any indebtedness that is
pari passu with the Subordinated Debentures (including other Debt Securities, as
defined under "Description of Subordinated Debentures -- General") or make any
guarantee payment with respect to such indebtedness. During an Extension Period,
interest on the Subordinated Debentures will continue to accrue and, as a
result, Distributions on the Preferred Securities will continue to accumulate at
the per annum rate of ____% (to the extent permitted by applicable law,
compounded quarterly). During an Extension Period, holders of Preferred
Securities will be required to accrue interest income (in the form of original
issue discount ("OID")) for United States federal income tax purposes in advance
of receipt of cash related to such interest income. See "Description of the
Preferred Securities -- Distributions" and "Certain United States Federal Income
Tax Consequences -- Interest Income and Original Issue Discount."
The payment of Distributions and payments on the liquidation of Atlantic
Capital or the redemption of the Preferred Securities are guaranteed by the
Company to the extent that Atlantic Capital 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 to
Atlantic Capital, Atlantic Capital will have insufficient funds to pay
Distributions on the Preferred Securities. In such event, a Holder of Preferred
Securities may institute a legal proceeding directly against the Company to
enforce payment to such Holder of the principal of or interest on Subordinated
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder. The Company's obligations under the
Guarantee and the Subordinated Debentures are unsecured and rank subordinate and
junior in right of payment to Senior Indebtedness (as defined under "Description
of the Subordinated Debentures -- Subordination") of the Company. Pursuant to
the Indenture, the Company, as borrower, has agreed to pay the obligations of
Atlantic Capital (other than with respect to the Trust Securities). The
Subordinated Debentures and the Guarantee, together with the obligations of the
Company with respect to the Preferred Securities under the Indenture and the
Trust Agreement (as defined under "Atlantic Capital"), constitute a full and
unconditional guarantee of the Preferred Securities by the Company.
The Trust Securities are subject to mandatory redemption upon repayment of the
Subordinated Debentures at maturity or upon their earlier redemption. Any
redemption of Trust Securities by Atlantic Capital will be in amounts having an
aggregate liquidation amount equal to the aggregate principal of Subordinated
Debentures to be redeemed and will be at a redemption price equal to 100% of
such liquidation amount, plus accrued and unpaid Distributions, if any, to the
redemption date (the "Redemption Price"). See "Description of the Preferred
Securities -- Redemption." The Company will have the option at any time on or
after _______________, 2003, to redeem the Subordinated Debentures, in whole or
in part. The Company also will have the option, upon the occurrence and during
the continuation of a Special Event (as defined under "Description of the
Preferred Securities -- Special Event Redemption or Distribution"), (i) to
redeem the Subordinated Debentures, in whole but not in part, which will result
in the redemption of all of the Trust Securities by Atlantic Capital or (ii) to
cause the termination of Atlantic Capital and, in connection therewith, after
satisfaction of all amounts due to creditors of Atlantic Capital, if any, to
cause the distribution of Subordinated Debentures to the Holders of the Trust
Securities. If the Subordinated Debentures are distributed to the Holders of
the Trust Securities, the Company will use its best efforts to have the
Subordinated Debentures listed on the New York Stock Exchange ("NYSE") or on
such other exchange as the Preferred Securities then are listed. See
"Description of the Preferred Securities -- Special Event Redemption or
Distribution."
The Subordinated Debentures are unsecured and rank subordinate and junior in
right of payment to all Senior Indebtedness of the Company. The terms of the
Subordinated Debentures place no limitation on the amount of Senior Indebtedness
that may be incurred by the Company. As of June 30, 1998, the Company had
approximately $764,940,000 of principal amount of indebtedness for borrowed
money and capital lease obligations constituting Senior Indebtedness. See
"Description of the Subordinated Debentures -- Subordination."
2
<PAGE>
In the event of the liquidation of Atlantic Capital, the Holders of the Trust
Securities will be entitled to receive either (i) Subordinated Debentures in an
aggregate principal amount of $25 per Trust Security or (ii) a liquidation
amount of $25 per Trust Security, plus accrued and unpaid Distributions thereon
to the date of payment, subject to certain limitations. See Description of the
"Preferred Securities -- Liquidation Distribution upon Termination."
The Preferred Securities will be represented by a global certificate
registered in the name of The Depository Trust Company ("DTC") or its nominee.
Beneficial interests in the Preferred Securities will be shown on, and transfers
thereof will be effected only through, records maintained by participants in
DTC. Except as described herein, Preferred Securities in certificated form will
not be issued in exchange for the global certificate. See "Description of the
Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust
Company."
3
<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 Atlantic
Capital, 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.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE PREFERRED SECURITIES
OFFERED HEREBY. SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT PREFERRED
SECURITIES AND BID FOR, AND PURCHASE, THE PREFERRED SECURITIES IN THE OPEN
MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
--------------------------
TABLE OF CONTENTS
Page
----
Available Information...................................................... 5
Incorporation of Certain Documents by Reference............................ 5
Summary Information........................................................ 6
Selected Financial Information of Atlantic City Electric Company........... 7
Risk Factors............................................................... 9
The Company................................................................ 12
Atlantic Capital........................................................... 12
Use of Proceeds............................................................ 12
Accounting Treatment....................................................... 12
Description of the Preferred Securities.................................... 13
Description of the Guarantee............................................... 22
Description of the Subordinated Debentures................................. 24
Certain United States Federal Income Tax Consequences...................... 32
Validity of the Securities................................................. 36
Underwriting............................................................... 37
Experts.................................................................... 38
4
<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. Additionally, such
material may be accessed at the Commission's website (http://www.sec.gov).
Certain securities of the Company are listed on the NYSE, and reports and other
information concerning the Company may be inspected and copied at the office of
the NYSE.
This Prospectus constitutes a part of a Registration Statement filed by the
Company and Atlantic Capital with the Commission under the Securities Act of
1933, as amended (the "Securities Act"). This Prospectus omits certain of the
information contained in the Registration Statement in accordance with the rules
and regulations of the Commission. Reference is hereby made to the Registration
Statement and the related exhibits for further information with respect to the
Company, Atlantic Capital and the Preferred Securities. Statements contained
herein concerning the provisions of any document are not necessarily complete
and, in each instance, reference is made to the copy of such document filed as
an exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
No separate financial statements of Atlantic Capital 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 Atlantic Capital has no independent operations, but
exists for the sole purpose of issuing the Trust Securities and holding as trust
assets the Subordinated Debentures.
It is anticipated that Atlantic Capital will not be subject to the
reporting requirements under the 1934 Act.
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, 1997;
2. The Company's Quarterly Report on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 1998;
3. The Company's Current Reports on Form 8-K dated February 27, 1998,
March 3, 1998 and March 5, 1998.
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: Stephanie M. Scola, Manager of Capital Markets,
Atlantic City Electric Company, King Street, P.O. Box 231, Wilmington, Delaware
19899, telephone number (302) 429-3931.
5
<PAGE>
SUMMARY INFORMATION
The following is a summary of certain information contained herein and
should be read in conjunction with such information contained elsewhere in this
Prospectus and is subject to and qualified by reference to such information.
Capitalized terms used herein have the respective meanings ascribed to them
elsewhere in this Prospectus.
General
The Preferred Securities represent undivided beneficial ownership interests
in the assets of Atlantic Capital and will have a preference under certain
circumstances with respect to Distributions and amounts payable on liquidation,
redemption or otherwise over the Common Securities. The sole assets of Atlantic
Capital will be the Subordinated Debentures. The Subordinated Debentures are
unsecured subordinated debt securities issued under an Indenture (the
"Indenture") between the Company and The Bank of New York, as trustee (the
"Debenture Trustee").
Distributions
Holders of the Preferred Securities will be entitled to receive cumulative
cash Distributions accruing from the date of original issuance and payable
quarterly in arrears on the last day of March, June, September and December of
each year, commencing December 31, 1998, at the per annum rate set forth on the
cover page of this prospectus to the persons in whose names the Preferred
Securities are registered at the close of business on the relevant record dates.
Atlantic Capital will hold Subordinated Debentures in an aggregate
principal amount equal to the liquidation amount of the Trust Securities.
Atlantic Capital will use interest payments on the Subordinated Debentures to
make Distributions on the Preferred Securities. The Subordinated Debentures are
unsecured and rank subordinate and junior in right of payment to all Senior
Indebtedness of the Company.
Option to Extend Interest Payment Period
The Company has the right to defer payments of interest on the Subordinated
Debentures by extending the interest payment period thereon for Extension
Periods of up to 20 consecutive quarters with respect to each deferral period;
provided, however, that no Extension Period may extend beyond the maturity of
the Subordinated Debentures. If interest payments on the Subordinated
Debentures are deferred, Distributions on the Preferred Securities also will be
deferred and the Company will not be permitted, 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 and, as a result, Distributions
on the Preferred Securities will accumulate at the per annum rate set forth on
the cover page of this Prospectus (to the extent permitted by applicable law,
compounded quarterly), and Holders of Preferred Securities will be required to
accrue interest income for United States federal income tax purposes in the form
of OID 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 subject to the requirements set forth
above.
Redemption
The Preferred Securities are subject to mandatory redemption upon repayment
of the Subordinated Debentures at maturity or upon their earlier redemption.
The Subordinated Debentures are redeemable, at the option of the Company, in
whole or in part, on or after ________________, 2003, or, in whole but not in
part, upon the occurrence of a Special Event and in certain other circumstances.
See "Description of the Preferred Securities -- Redemption and -- Special Event
Redemption or Distribution" and "Description of the Subordinated Debentures --
Optional Redemption."
No sinking fund will be established for the benefit of the Preferred
Securities.
6
<PAGE>
Special Event Redemption or Distribution
Upon the occurrence and during the continuation of a Special Event, the
Company has the option to (i) redeem the Subordinated Debentures, in whole but
not in part, and therefore cause a mandatory redemption of all of the Trust
Securities at the Redemption Price within 90 days following the occurrence of
such Special Event or (ii) cause the termination of Atlantic Capital, subject,
in the case of a Tax Event (as defined under "Description of the Preferred
Securities -- Special Event Redemption or Distribution"), to receipt of a No
Recognition Opinion (as defined under "Description of the Preferred Securities -
- - Special Event Redemption or Distribution") and in connection therewith, after
the satisfaction of all amounts due to creditors of Atlantic Capital, if any,
cause the Subordinated Debentures to be distributed to the Holders of the Trust
Securities on a pro rata basis. If the Subordinated Debentures are distributed
to the Holders of the Preferred Securities, the Company will use its best
efforts to have the Subordinated Debentures listed on the NYSE or on such other
exchange as the Preferred Securities are then listed. See "Description of the
Preferred Securities -- Special Event Redemption or Distribution."
The Guarantee
The payment of Distributions and payments on the liquidation of Atlantic
Capital or the redemption of Preferred Securities are guaranteed by the Company
to the extent that Atlantic Capital has sufficient funds available therefor.
See "Description of the Guarantee."
Listing
Application has been made to list the Preferred Securities on the NYSE.
Trading of the Preferred Securities on the NYSE is expected to commence within a
30-day period after the date of this Prospectus.
Use of Proceeds
The proceeds to be received by Atlantic Capital 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 purchase
from Conectiv shares of preferred stock tendered in connection with Conectiv's
Offer to Purchase commenced September 10, 1998. To the extent the proceeds are
not immediately so used, they may be invested temporarily in short-term
interest-bearing obligations. See "Use of Proceeds."
7
<PAGE>
SELECTED FINANCIAL INFORMATION OF ATLANTIC CITY ELECTRIC COMPANY
(Thousands, except per share amounts, ratios and percentages)
Presented below is selected audited consolidated financial information for
the Company for the years ended December 31, 1993 through 1997 as well as
unaudited information for the twelve months ended June 30, 1998. The
consolidated financial information is not necessarily indicative of the results
for any future period and is qualified in its entirety by the detailed
information available in the Company's reports as described under "Incorporation
of Certain Documents by Reference."
<TABLE>
<CAPTION>
Twelve Months Year Ended December 31,
Ended --------------------------------------------------------
June 30, 1998 1997 1996 1995 1994 1993
----------------- ----------- ----------- ---------- --------- -----------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues.................................... $1,078,825 $1,084,890 $989,647 $954,783 $913,226 $865,799
Net Income(1)......................................... 45,276 85,747 75,017 98,752 93,174 109,026
Ratio of Earnings to Fixed Charges(1)................. 2.00 2.83 2.58 3.19 3.07 3.37
Ratio of Earnings to Fixed Charges and Preferred
Dividends(2)........................................ 1.84 2.58 2.16 2.43 2.26 2.47
</TABLE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company as of June 30, 1998 and as adjusted to give effect to the consummation
of the offering of the Preferred Securities offered hereby. The following data
should be read in conjunction with the Company's reports filed with the
Commission under the Exchange Act. See "Incorporation of Certain Documents by
Reference."
<TABLE>
<CAPTION>
June 30, 1998
-------------------------------------------------
(Unaudited)
Actual As Adjusted
-------------------------------------------------
Outstanding Ratio Outstanding Ratio
--------------- ------- --------------- ---------
<S> <C> <C> <C> <C>
Long-Term Debt(3).............. $ 849,402 49.6% $ 849,402 48.8%
Cumulative Preferred Stock -
Subject to Mandatory
Redemption................... 23,950 1.4 23,950 1.4
Not Subject to Mandatory
Redemption................... 30,000 1.8 30,000(4) 1.7(4)
Cumulative Quarterly
Preferred Securities......... 70,000 4.1 100,000 5.7
Common Equity................. 738,513 43.1 738,513 42.4
---------- ----- ---------- -----
Total Capitalization.......... $1,711,865 100.0% $1,741,865 100.0%
========== ===== ========== =====
- ------------------------------------------------------------------------------
</TABLE>
(1) Net income for the twelve months ended June 30, 1998 was decreased by $44.6
million ($70.1 million before taxes) due to charges for employee separation
programs, termination of certain employee benefit plans, and other Merger-
related costs.
(2) For the twelve months ended June 30, 1998, excluding $70.1 million of pre-
tax charges for employee separation programs termination of certain employee
benefit plans, and other Merger-related costs, the ratio of earnings to
fixed charges is 2.96 and the ratio of earnings to fixed charges and
preferred dividends is 2.73.
(3) Includes current portion.
(4) Does not reflect shares which may be retired pursuant to Conectiv's Offer
to Purchase. See "Use of Proceeds."
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RISK FACTORS
Prospective purchasers of Preferred Securities should review carefully the
information contained elsewhere herein and should particularly consider the
following risk factors with respect to the Preferred Securities:
Subordination of the Guarantee and the Subordinated Debentures
The Company's obligations under the Guarantee and the Subordinated
Debentures are unsecured and rank subordinate and junior in right of payment to
Senior Indebtedness of the Company, except any liabilities that may be made pari
passu expressly by their terms. See "Description of the Guarantee -- Status of
the Guarantee" and "Description of the Subordinated Debentures --
Subordination." As of June 30, 1998, Senior Indebtedness of the Company
aggregated approximately $764,940,000. There are no terms of the Preferred
Securities, the Guarantee or the Subordinated Debentures that limit the
Company's ability to incur additional indebtedness, including indebtedness that
would rank senior to the Guarantee and the Subordinated Debentures.
The ability of Atlantic Capital to pay amounts due on the Preferred
Securities is solely dependent upon the Company making payments on the
Subordinated Debentures as and when required.
Option to Extend Interest Payment Period; Tax Consequences
The Company has the right to defer payments of interest on the Subordinated
Debentures by extending the interest payment period thereon for Extension
Periods of up to 20 consecutive quarters with respect to each deferral period;
provided that no Extension Period may extend beyond the maturity of the
Subordinated Debentures. Prior to the end of an Extension Period, the Company
may, and at the end of such Extension Period the Company shall, pay all interest
then accrued and unpaid (together with interest thereon at the stated rate borne
thereby, compounded quarterly to the extent permitted by applicable law). Upon
the termination of any Extension Period and the payment of all amounts then due,
including interest on deferred interest payments, the Company may select a new
Extension Period, subject to the above requirements. If interest payments on
the Subordinated Debentures are deferred, Distributions on the Preferred
Securities also will be deferred and the Company will not be permitted, subject
to certain exceptions set forth herein, to (i) declare or pay dividends or
distributions on (other than dividends or distributions paid in shares of Common
Stock of the Company) or redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock, or (ii) make any payment of principal
of, interest or premium, if any, on, or repay, repurchase or redeem any
indebtedness that is pari passu with the Subordinated Debentures (including
other Debt Securities) or make any guarantee payment with respect to such
indebtedness. During an Extension Period, interest on the Subordinated
Debentures will continue to accrue and, as a result, Distributions on the
Preferred Securities will accumulate at the per annum rate set forth on the
cover page of this Prospectus (to the extent permitted by applicable law,
compounded quarterly). See "Description of the Preferred Securities --
Distributions" and "Description of the Subordinated Debentures -- Option to
Extend Interest Payment Period."
Should an Extension Period occur, a Holder of Preferred Securities will be
required to accrue interest (in the form of original issue discount ("OID")) in
income in respect of its pro rata share of the Subordinated Debentures held by
Atlantic Capital 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 Atlantic Capital 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
Consequences -- Interest Income and Original Issue Discount."
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures. However, should the Company elect to exercise such
right in the future, the market price of the Preferred Securities is likely to
be adversely affected. A Holder that disposes of its Preferred Securities
during an Extension Period, therefore, might not receive the same return on its
investment as a Holder that continues to hold its Preferred Securities. In
addition, as a result of the existence of the Company's right to defer interest
payments, the market price of the Preferred Securities (which represent an
undivided beneficial
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ownership interest in the Subordinated Debentures) may be more volatile than
other securities that do not have such rights.
Special Event Redemption or Distribution; Adverse Effect of Possible Tax
Law Changes
Upon the occurrence and during the continuation of a Special Event, the
Company has the option to (i) redeem the Subordinated Debentures, in whole but
not in part, and therefore cause a mandatory redemption of all of the Trust
Securities at the Redemption Price within 90 days following the occurrence of
such Special Event or (ii) cause the termination of Atlantic Capital and, in
connection therewith, after satisfaction of all amounts due to creditors of
Atlantic Capital, if any, cause Subordinated Debentures to be distributed to the
Holders of Trust Securities within 90 days following the occurrence of such
Special Event.
Recently, a petition was filed in the United States Tax Court as a result
of a challenge by the Internal Revenue Service ("IRS") of the petitioner's
treatment as indebtedness of a loan issued in circumstances with similarities to
the issuance of the Subordinated Debentures. If this matter is in fact
litigated and the Tax Court were to sustain the IRS's position on this matter,
such judicial decision could give rise to a Tax Event, which would permit the
Company to cause a redemption of the Preferred Securities as described more
fully under "Description of the Preferred Securities--Special Event Redemption
or Distribution".
Rights Under the Guarantee; Limitation as to Funds Available to Atlantic
Capital
The Guarantee guarantees to the Holders of the Preferred Securities to the
extent not paid by Atlantic Capital, the payment (but not the collection) of (i)
any accrued and unpaid Distributions required to be paid on the Preferred
Securities, to the extent Atlantic Capital has sufficient funds available
therefor, (ii) the Redemption Price with respect to Preferred Securities called
for redemption by Atlantic Capital, 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
Atlantic Capital (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 Atlantic remaining available
for distribution to Holders of the Preferred Securities in liquidation of
Atlantic Capital. If the Company were to default on its obligations under the
Subordinated Debentures, Atlantic Capital would lack available funds for the
payment of Distributions or amounts payable on redemption of the Preferred
Securities or otherwise, and in such event Holders of the Preferred Securities
would not be able to rely upon the Guarantee for payment of such amounts. See
"Description of the Guarantee" and "Description of the Subordinated
Debentures -- Subordination" herein.
Limited Voting Rights
Holders of Preferred Securities generally will have limited voting rights
relating only to the modification of the Preferred Securities and the exercise
of remedies upon the occurrence of an Event of Default. Holders of Preferred
Securities will not be entitled to vote to appoint, remove or replace the
Property Trustee or the Delaware Trustee, which voting rights are vested
exclusively in the Holder of the Common Securities, except upon the occurrence
of certain events described herein. The Administrative Trustees (as defined
under "Atlantic Capital") and the Company may amend the Trust Agreement to
ensure that Atlantic Capital will be classified for United States federal income
tax purposes as a grantor trust without the consent of Holders, even if such
action adversely affects the interests of Holders. See "Description of the
Preferred Securities -- Voting Rights," "-- Amendments," "-- Removal of Property
Trustee" and "-- Co-Trustees and Separate Property Trustees."
Trading Characteristics of Preferred Securities
Application has been made to list the Preferred Securities on the NYSE. If
approved for listing, the Preferred Securities may trade at a price that does
not fully reflect the value of accrued but unpaid interest with respect to the
underlying Subordinated Debentures.
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Market Prices
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 upon dissolution or liquidation of Atlantic Capital.
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 Atlantic Capital, 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. As a result of the
existence of the Company's right to extend interest payment periods, the market
price of the Preferred Securities may be more volatile than the market prices of
other securities on which the interest is not subject to such deferral. See
"Description of the Preferred Securities--Special Event Redemption or
Distribution" and "Description of the Subordinated Debentures."
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THE COMPANY
The Company was incorporated in New Jersey on April 28, 1924. 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 operating utility primarily engaged in the generation,
transmission, distribution and sale of electric power to approximately 480,000
customers in the southern part of New Jersey. All of the common stock of the
Company is owned by Conectiv, a registered holding company under the Holding
Company Act.
ATLANTIC CAPITAL
Atlantic Capital is a statutory business trust created under Delaware law
pursuant to (i) a trust agreement (the "Original Trust Agreement") executed by
the Company, as depositor for Atlantic Capital, The Bank of New York, as
Property Trustee, The Bank of New York (Delaware) as Delaware Trustee, and an
Administrative Trustee, who is an employee of the Company (together with such
other Administrative Trustees from time to time appointed by the Company, the
"Administrative Trustees") and (ii) the filing of a certificate of trust (the
"Certificate of Trust") with the Delaware Secretary of State on September 10,
1998. Such Original Trust Agreement will be amended and restated in its entirety
(as so amended and restated, the "Trust Agreement") substantially in the form
filed as an exhibit to the Registration Statement of which this Prospectus forms
a part. The Trust Agreement will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Atlantic Capital
exists for the exclusive purposes of (i) issuing Trust Securities representing
undivided beneficial ownership interests in the assets of Atlantic Capital (ii)
holding the Subordinated Debentures as trust assets and (iii) engaging in only
those other activities necessary or incidental thereto. All of the Common
Securities, which will represent at least 3% of the total capital of Atlantic
Capital, will be owned by the Company. The Common Securities will rank pari
passu, and payments will be made thereon pro rata, with the Preferred
Securities, except as described under "Description of the Preferred
Securities -- Subordination of the Common Securities." Atlantic Capital has a
term of approximately 45 years, but may terminate earlier as provided in the
Trust Agreement. Atlantic Capital's business and affairs will be conducted by
the Administrative Trustees. The office of the Delaware Trustee is White Clay
Center, Newark, Delaware 19711. The principal place of business of Atlantic
Capital is c/o Atlantic City Electric Company, 800 King Street, P.O. Box 231,
Wilmington, Delaware 19899.
USE OF PROCEEDS
The proceeds to be received by Atlantic Capital from the sale of the
Preferred Securities will be used to purchase Subordinated Debentures of the
Company. The Company expects to use the proceeds from the sale of the
Subordinated Debentures to purchase from Conectiv the shares of its Preferred
Stock tendered in connection with Conectiv's Offer to Purchase commenced
September 10, 1998 (the "Offer to Purchase"). If 100% of such shares of
Preferred Stock are tendered in connection with the Offer to Purchase, the
funding requirement with respect to such tender would be $6,283,200 for the 4%
Preferred Stock ($100 par value), $6,012,000 for the 4.10% Preferred Stock ($100
par value), $1,329,000 for the 4.35% Preferred Stock ($100 par value),
$3,189,600 for the 4.35% 2nd Series Preferred Stock ($100 par value), $4,837,500
for the 4.75% Preferred Stock ($100 par value) and $5,000,000 for the 5%
Preferred Stock ($100 par value). The Company expects that less than 100% of
such shares will be tendered in connection with the Offer to Purchase. To the
extent the proceeds are not immediately so used, they may be invested
temporarily in short-term interest-bearing obligations.
ACCOUNTING TREATMENT
For financial reporting purposes, Atlantic Capital will be treated as a
subsidiary of the Company and, accordingly, the accounts of Atlantic Capital
will be included in the consolidated financial statements of the Company. The
Preferred Securities will be included in the consolidated balance sheets of the
Company and appropriate disclosures about the Preferred Securities, the
Guarantee and the Subordinated Debentures will be included in the notes to the
consolidated financial statements of the Company. For financial reporting
purposes,
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dividend distributions on the Preferred Securities will be recorded in the
consolidated statements of income of the Company.
DESCRIPTION OF THE PREFERRED SECURITIES
The following summaries of certain provisions of the Preferred Securities
and the Trust Agreement do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, the provisions of the Trust
Agreement, including the definitions therein of certain terms, and the Trust
Indenture Act. Wherever particular sections or defined terms of the Trust
Agreement are referred to, such sections or defined terms are incorporated
herein by reference. The Trust Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
General
The Preferred Securities and the Common Securities will be created pursuant
to the terms of the Trust Agreement. The Preferred Securities represent
undivided beneficial ownership interests in the assets of Atlantic Capital and
will have a preference under certain circumstances with respect to Distributions
and amounts payable on liquidation, redemption or otherwise over the Common
Securities. The Common Securities will rank pari passu, and payments will be
made thereon pro rata, with the Preferred Securities, except as described under
"-- Subordination of Common Securities." (Section 4.03). The Subordinated
Debentures will be owned by Atlantic Capital 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 and the
Trust Agreement, constitute a full and unconditional guarantee of the Preferred
Securities by the Company.
Distributions
The Distributions payable on the Preferred Securities will be fixed at the
rate per annum of the stated liquidation amount thereof set forth on the cover
page of this Prospectus. The term "Distributions" as used herein includes any
additional Distributions 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 on the Preferred Securities will be cumulative, will accrue
from and including the date of initial issuance thereof, and will be payable
quarterly in arrears, on March 31, June 30, September 30 and December 31 of each
year, commencing December 31, 1998, except as otherwise described below. Such
Distributions will accrue to, and including, the first Distribution payment date
(as defined below), and for each subsequent Distribution payment date will
accrue from, and excluding, the last Distribution payment date through which
Distributions have been paid or duly provided for. In the event that any date
on which Distributions are otherwise payable on the Preferred Securities is not
a Business Day, payment of the Distribution payable on such date will be made on
the next succeeding Business Day, except that, if such Business Day is in the
next succeeding calendar year, payment of such Distribution shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date (each date on which Distributions are otherwise payable
in accordance with the foregoing, a "Distribution payment date"). (Section
4.01(a)). "Business Day" is used herein to mean any day other than (i) a
Saturday or a Sunday, (ii) a day on which banking institutions in The City of
New York are authorized or required by law or executive order to remain closed
and (iii) a day on which the Corporate Trust Office of the Property Trustee or
the Debenture Trustee is closed for business. (Section 1.01)
The Company has the right under the Indenture to defer interest payments on
the Subordinated Debentures at any time or from time to time by extending the
interest payment period thereon for Extension Periods up to 20 consecutive
quarters but not extending beyond the maturity of the Subordinated Debentures,
with the consequence that quarterly Distributions on the Preferred Securities
would be deferred (but interest on the Subordinated Debentures would continue to
accrue and, as a result, Distributions on the Preferred Securities will
accumulate at
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the rate per annum set forth on the cover page of this Prospectus, compounded
quarterly) by Atlantic Capital during any such Extension Period. (Section
4.01(b)). In the event that the Company exercises this right, during the
Extension Period the Company may not (i) declare or pay dividends or
distributions (other than dividends or distributions in Common Stock of the
Company) on, or redeem, purchase, acquire, or make a liquidation payment with
respect to any of its capital stock, or (ii) make any payment of principal of,
interest or premium, if any, on, or repay, repurchase or redeem any indebtedness
that is pari passu with the Subordinated Debentures (including other Debt
Securities) or make any guarantee payment with respect to such indebtedness
(other than payments made pursuant to any Guarantee). See "Description of the
Subordinated Debentures -- Option to Extend Interest Payment Period."
Distributions on the Preferred Securities will be payable to the Holders
thereof as they appear on the register of Atlantic Capital on the relevant
record dates, each of which, will be 15 days 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." (Section 4.01(d)).
Redemption
Upon the repayment of the Subordinated Debentures, whether at maturity or
upon earlier redemption as provided in the Indenture, the proceeds from such
repayment shall be applied by the Property Trustee to redeem a Like Amount (as
defined herein) of Trust Securities, upon not less than 30 nor more than 60
days' notice, at the Redemption Price. (Section 4.02). See "Description of the
Subordinated Debentures -- Optional Redemption."
Special Event Redemption or Distribution
Upon the occurrence and during the continuation of a Tax Event or an
Investment Company Event (each, as defined below, a "Special Event"), the
Company has the option to (i) redeem the Subordinated Debentures in whole, but
not in part, and therefore cause a mandatory redemption of all of the Trust
Securities at the Redemption Price within 90 days following the occurrence of
such Special Event, or (ii) cause the termination of Atlantic Capital and in
connection therewith, after satisfaction of all amounts due to creditors of
Atlantic Capital, if any, cause the Subordinated Debentures to be distributed to
the Holders of the Trust Securities within 90 days following the occurrence of
such Special Event; provided that in the case of the occurrence of a Tax Event,
as a condition to any such termination and distribution, the Administrative
Trustees shall have received an opinion of nationally recognized independent tax
counsel experienced in such matters, which opinion may rely on any then
applicable published revenue rulings of the Internal Revenue Service, to the
effect that the Holders of the Preferred Securities will not recognize any gain
or loss for United States federal income tax purposes as a result of the
termination of the Trust and the distribution of the Subordinated Debentures (a
"No Recognition Opinion"). See "Certain United States Federal Income Tax
Consequences -- Distribution of Subordinated Debentures or Cash upon Liquidation
of Atlantic Capital." 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, under the Indenture, the Company, as
borrower, will be obligated to pay any taxes, duties, assessments or other
governmental charges (other than United States withholding taxes) to which
Atlantic Capital has become subject.
"Like Amount" means, as the context requires, (i) with respect to a
redemption of Trust Securities, Trust Securities having a liquidation amount
equal to the principal amount of Subordinated Debentures to be contemporaneously
redeemed and (ii) with respect to a distribution of Subordinated Debentures to
Holders of Trust Securities in connection with a liquidation of Atlantic
Capital, Subordinated Debentures having a principal amount equal to the
liquidation amount of the Trust Securities with respect to which such
Subordinated Debentures are to be distributed. (Section 1.01)
"Tax Event" means the receipt by Atlantic Capital 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, or as a result of any administrative pronouncement
or action or judicial decision
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interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement, action or decision is announced on or after
the date of 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)
Atlantic Capital is, or will be, subject to United States federal income tax
with respect to income received or accrued on the Subordinated Debentures, (ii)
interest payable by the Company on the Subordinated Debentures, is not, or will
not be, fully deductible by the Company for United States federal income tax
purposes, or (iii) Atlantic Capital is, or will be, subject to more than a de
minimis amount of other taxes, duties or other governmental charges. (Section
1.01)
"Investment Company Event" means the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority to the
effect that Atlantic Capital is or will be considered an "investment company"
that is required to be registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), which change in law becomes effective on or after the
date of original issuance of the Preferred Securities. (Section 1.01).
On the date fixed for the distribution of Subordinated Debentures upon
termination of Atlantic Capital (i) the Trust Securities no longer will be
deemed to be outstanding and (ii) all rights of the Holders thereof will cease,
except the right to receive Subordinated Debentures upon surrender of the
certificates representing their Trust Securities. (Section 9.04).
If the Subordinated Debentures are distributed to the Holders of Preferred
Securities, the Company will use its best efforts to list the Subordinated
Debentures on the NYSE or on such other exchange on which the Preferred
Securities then are listed.
Redemption Procedures
Preferred Securities redeemed on each Redemption Date (as defined below)
shall be redeemed at the Redemption Price with the proceeds from the
contemporaneous redemption of Subordinated Debentures. Redemptions of the
Preferred Securities shall be made and the Redemption Price shall be deemed
payable on each date selected for redemption (the "Redemption Date") only if
Atlantic Capital has funds immediately available for the payment of such
Redemption Price. (Section 4.02(c)). See also "-- Subordination of Common
Securities."
If Atlantic Capital shall give a notice of redemption in respect of
Preferred Securities, then, on or before the Redemption Date, the Property
Trustee will deposit irrevocably with the paying agent for such Preferred
Securities funds sufficient to pay the applicable Redemption Price and will give
such paying agent irrevocable instructions to pay the Redemption Price to the
Holders thereof upon surrender of their certificates evidencing such Preferred
Securities. Notwithstanding the foregoing, Distributions payable on or prior to
the Redemption Date for any Preferred Securities called for redemption shall be
payable to the Holders of such Preferred Securities on the relevant record dates
for the related Distribution payment dates. If notice of redemption shall have
been given and funds deposited as required, then on the Redemption Date, all
rights of Holders of such Preferred Securities so called for redemption will
cease, except the right of the Holders of such Preferred Securities to receive
the Redemption Price, but without interest thereon, and such Preferred
Securities will cease to be outstanding. In the event that any date fixed for
redemption of Preferred Securities is not a Business Day, then payment of the
amount payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay). In the event that payment of the Redemption Price in respect of
Preferred Securities called for redemption is not paid either by Atlantic
Capital or by the Company pursuant to the Guarantee, Distributions on such
Preferred Securities will continue to accrue at the then applicable rate, from
the original Redemption Date to the date of payment. (Section 4.02(d)).
If less than all the Trust Securities are to be redeemed on a Redemption
Date, then the aggregate liquidation amount of such securities to be redeemed
shall be allocated on a pro rata basis to the Common Securities and the
Preferred Securities based upon the relative liquidation amounts of such
classes. The particular Preferred Securities to be redeemed shall be selected
on a pro rata basis not more than 60 days prior to the Redemption Date by the
Property Trustee from the outstanding Preferred Securities not previously called
for redemption which may provide for the selection for redemption of portions
equal to $25 or integral multiples thereof of the liquidation amount of
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Preferred Securities of a denomination greater than $25. The Property Trustee
shall notify the Registrar promptly in writing of the Preferred Securities
selected for redemption and, in the case of any Preferred Securities selected
for partial redemption, the liquidation amount thereof to be redeemed. For all
purposes of the Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Preferred Securities shall relate, in
the case of any Preferred Securities redeemed or to be redeemed only in part, to
the portion of the liquidation amount of Preferred Securities that has been or
is to be redeemed. (Section 4.02(e)).
Subordination of Common Securities
Payment of Distributions on, and the Redemption Price of, the Trust
Securities, shall be made pro rata based on the liquidation amount of the Trust
Securities; provided that if on any Distribution payment date or Redemption Date
any Event of Default resulting from an Event of Default under the Indenture (a
"Debenture Event of Default") shall have occurred and be continuing, no payment
of any Distribution on, or Redemption Price of, any Common Security, and no
other payment on account of the redemption, liquidation or other acquisition of
Common Securities, shall be made unless payment in full in cash of all accrued
and unpaid Distributions on all Preferred Securities for all distribution
periods terminating on or prior thereto, or in the case of payment of the
Redemption Price, the full amount of such Redemption Price on all Preferred
Securities, shall have been made or provided for. (Section 4.03(a)).
In the case of an Event of Default resulting from a Debenture Event of
Default under the Indenture, the Company as Holder of the Common Securities will
be deemed to have waived any such Event of Default until the effect of all such
Events of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated. Until all such Events of Default have been so
cured, waived or otherwise eliminated, the Property Trustee shall act solely on
behalf of the Holders of the Preferred Securities, and only Holders of Preferred
Securities will have the right to direct the Property Trustee to act. (Section
4.03(b)).
Liquidation Distribution upon Termination
Pursuant to the Trust Agreement, Atlantic Capital shall terminate and shall
be liquidated by the Property Trustee on December 31, 2043 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 Atlantic Capital upon the occurrence of a Special
Event and, in the case of a Tax Event, receipt by the Administrative Trustees of
a No Recognition Opinion, and (iv) the entrance by a court of competent
jurisdiction of an order for judicial termination of Atlantic Capital. (Sections
9.01 and 9.02).
On December 31, 2043 or if an early termination occurs as described in
clause (i), (iii) or (iv) above, Atlantic Capital 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 Atlantic
Capital available for distribution to Holders after adequate provision, 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
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"). If such Liquidation Distribution can be
paid only in part because Atlantic Capital has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by Atlantic Capital on the Trust Securities shall be paid on a pro rata
basis, except that if a Debenture Event of Default has occurred and is
continuing, or if a Debenture Event of Default has not occurred solely by reason
of a requirement that time lapse or notice be given, the Liquidation
Distribution with respect to the Preferred Securities shall be paid in full
prior to making any Liquidation Distribution with respect to the Common
Securities. (Sections 9.04(a) and (e)).
Events of Default; Notice
Any one of the following events constitutes an Event of Default under the
Trust Agreement:
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(i) the occurrence of a Debenture Event of Default (see
"Description of the Subordinated Debentures -- Events of Default"); or
(ii) default by Atlantic Capital or the Property Trustee 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 Atlantic Capital or the Property Trustee in
the payment of any Redemption Price of any Trust Security when it becomes
due and payable; or
(iv) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in the Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is specifically dealt with in clause (ii) or (iii)
above), and continuation of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to the
Property Trustee by the Holders of Preferred Securities having at least 25%
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 Atlantic Capital or the Property Trustee if a
successor Property Trustee has not been appointed within 90 days thereof.
(Section 1.01).
Within five Business Days after the occurrence of any Event of Default, the
Property Trustee shall transmit to the Holders of Trust Securities, the
Administrative Trustees and the Company notice of such Event of Default known to
the Property Trustee, unless such Event of Default shall have been cured or
waived. (Section 8.02(a)).
The Company and the Administrative Trustees are required to file annually
with the Property Trustee such documents, reports, compliance certificates and
information as may be required by Section 314 of the Trust Indenture Act,
including a certificate as to whether or not they are in compliance with all of
the conditions and covenants applicable to them under the Trust Agreement
(Section 8.15).
Voting Rights
Holders of Trust Securities shall be entitled to one vote for each $25 in
liquidation amount represented by their Trust Securities in respect of any
matter as to which such Holders of Trust Securities are entitled to vote.
Except as described below and under "-- Amendments," and under "Description of
the Guarantee -- Amendments and Assignment" and as otherwise required by law and
the Trust Agreement, the Holders of the Preferred Securities will have no voting
rights. (Section 6.01(a)). In the event that the Company elects to defer
payments of interest on the Subordinated Debentures as described under "--
Distributions," the Holders of the Preferred Securities do not have the right to
appoint a special representative or trustee or otherwise act to protect their
interests.
So long as any Subordinated Debentures are held by the Property Trustee,
the Property Trustee the Delaware Trustee and the Administrative Trustees
(collectively, the "Trustees" and individually, a "Trustee") shall not (i)
direct the time, method and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or executing any trust or power conferred on
the Debenture Trustee with respect to the Subordinated Debentures, (ii) waive
any past default which is waivable under Section 813 of the Indenture, (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Subordinated Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the Subordinated
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of Preferred Securities having at
least 66 2/3% of the liquidation amount of the outstanding Preferred Securities;
provided that where a consent under the Indenture would require the consent of
each Holder of Subordinated Debentures affected thereby, no such consent shall
be given by the Trustees without the prior 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. 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
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under the Subordinated Debentures or the Trust Agreement, to the fullest extent
permitted by law, without first instituting any legal proceeding against the
Property Trustee or any other person or entity. (Section 6.01(a) and (b)). The
Property Trustee shall notify all Holders of the Preferred Securities of any
notice of Event of Default received from the Debenture Trustee. Notwithstanding
the foregoing, a Holder of Preferred Securities may institute a proceeding for
enforcement of payment to such Holder directly of principal of or interest on
the Subordinated Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder on or after the
due dates specified in the Subordinated Debentures.
Amendments
The Trust Agreement may be amended from time to time by a majority of the
Administrative Trustees, the Property Trustee, the Delaware Trustee and the
Company, without the consent of any Holders of Trust Securities, (i) to cure any
ambiguity, correct or supplement any provision therein which may be inconsistent
with any other provision therein, or to make any other provisions with respect
to matters or questions arising under the Trust Agreement, which shall not be
inconsistent with the other provisions of the Trust Agreement, provided that any
such amendment shall not adversely affect in any material respect the interests
of any Holder of Trust Securities, (ii) to modify, eliminate or add to any
provisions of the Trust Agreement to such extent as shall be necessary to ensure
that Atlantic Capital 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 Atlantic Capital'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 10.02(a)).
Except as provided below, any provision of the Trust Agreement may be
amended by a majority of the Administrative Trustees, the Property Trustee, the
Delaware 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
Atlantic Capital's status as a grantor trust for United States federal income
tax purposes or affect Atlantic Capital's exemption from status of an
"investment company" under the 1940 Act. (Section 10.02(b)).
Without the consent of each affected Holder of Trust Securities, the Trust
Agreement may not be amended to (i) change the amount or timing of any
Distributions with respect to the Trust Securities or otherwise adversely affect
the amount of any Distributions required to be made in respect of the Trust
Securities as of a specified date, (ii) restrict the right of a Holder of Trust
Securities to institute suit for the enforcement of any such payment on or after
such date or (iii) change the requirement that each affected Holder consent to
amendments in respect of clauses (i) or (ii) above. (Section 10.02(c)).
Removal of Property Trustee
Unless an Event of Default under the Indenture shall have occurred and be
continuing, a 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 and the Delaware 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 a Trustee and no appointment of a successor trustee
shall be effective until the acceptance of appointment by the successor trustee
in accordance with the provisions of the Trust Agreement. (Sections 8.10 and
8.11).
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
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of the Trust Property (as defined in the Trust Agreement) may at the time be
located, the Company and the Property Trustee shall have power to appoint, and
upon the written request of the Property Trustee, the Company shall for such
purpose join with the Property Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint one
or more persons approved by the Property Trustee either to act as co-trustee,
jointly with the Property Trustee, of all or any part of such Trust Property, or
to act as separate trustee of any such property, in either case with such powers
as may be provided in the instrument of appointment, and to vest in such person
or persons in such capacity, any property, title, right or power deemed
necessary or desirable, subject to the provisions of the Trust Agreement. If
the Company does not join in such appointment within 15 days after the receipt
by it of a request so to do, or in case an Event of Default under the Indenture
has occurred and is continuing, the Property Trustee alone shall have power to
make such appointment. (Section 8.09(a)).
Mergers, Consolidations, Amalgamations or Replacements
Atlantic Capital 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 as
described below. Atlantic Capital may, at the request of the Company, with the
consent of the Administrative Trustees and without the consent of the holders of
the Preferred Securities, 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 that (i) such successor entity either (a) expressly assumes all of the
obligations of Atlantic Capital 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 Company expressly appoints a trustee of such successor
entity possessing substantially the same powers and duties as the Property
Trustee as the holder of the Subordinated 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 the Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
purpose identical to that of Atlantic Capital, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer, or lease, the
Company has received an opinion from independent counsel to Atlantic Capital
experienced in such matters to the effect that (a) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Preferred
Securities (including any Successor Securities) in any material respect and (b)
following such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither Atlantic Capital nor such successor entity will be
required to register as an investment company under the Investment Company Act
and (viii) the Company 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, Atlantic Capital shall not, except with the
consent of holders of 100% in aggregate liquidation amount of the outstanding
Preferred Securities, consolidate, amalgamate, merge with or into, be replaced
by or convey, transfer or lease its properties and assets substantially as an
entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause
Atlantic Capital or the successor entity to be classified as other than a
grantor trust for United States federal income tax purposes. (Section 9.05).
Book-Entry Only Issuance -- The Depository Trust Company
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.
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DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the 1934 Act. DTC holds
securities that its participants ("Participants") deposit with DTC. DTC also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the DTC system also is available to others,
such as securities brokers and dealers, banks and trust companies that clear
transactions through or maintain a direct or indirect custodial relationship
with a Direct Participant ("Indirect Participants"). The rules applicable to
DTC and its Direct Participants and Indirect Participants are on file with the
Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security (the "Beneficial Owner") is in turn to be recorded on
the Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchases, but Beneficial Owners are expected to
receive written confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Participants through which the
Beneficial Owners purchased Preferred Securities. Transfers of ownership
interests in the Preferred Securities are to be accomplished by entries made on
the books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in
the Preferred Securities, except in the event that use of the book-entry system
for the Preferred Securities is discontinued.
To facilitate subsequent transfers, all the Preferred Securities deposited
by Direct Participants with DTC are registered in the name of DTC's nominee,
Cede & Co. The deposit of Preferred Securities with DTC and their registration
in the name of Cede & Co. will effect no change in beneficial ownership. DTC
has no knowledge of the actual Beneficial Owners of the Preferred Securities.
DTC's records reflect only the identity of the Direct Participants to whose
accounts such Preferred Securities are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping account
of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements that may be in effect from
time to time.
Redemption notices shall be sent to Cede & Co. as the registered Holder of
Preferred Securities. The Preferred Securities to be redeemed shall be selected
by DTC on a pro rata basis in accordance with DTC's customary procedures.
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 Atlantic Capital 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 Atlantic Capital 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 Atlantic Capital.
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,
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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, Atlantic Capital 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 Atlantic Capital, 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
Atlantic Capital 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 Atlantic Capital believe to
be reliable, but neither the Company nor Atlantic Capital takes responsibility
for the accuracy thereof.
Form, Exchange, and Transfer
The following provisions shall apply to the Preferred Securities only in
the event that the Preferred Securities are no longer held in book-entry only
form.
Preferred Securities will be issuable only in fully registered form, each
having a liquidation amount of $25 and any integral multiple thereof. Preferred
Securities will be exchangeable for other Preferred Securities, of any
authorized denomination and of like tenor and aggregate liquidation amount.
Preferred Securities may be presented for exchange as provided above or for
registration of transfer (duly endorsed or accompanied by a duly executed
instrument of transfer) at the office of the Transfer Agent designated for such
purpose. Initially, The Bank of New York will act as Registrar and Transfer
Agent for the Preferred Securities. (Section 5.03(b)).
No service charge will be made for any registration of transfer or exchange
of Preferred Securities, but Atlantic Capital may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. (Section 5.03(d)). Such transfer or exchange will be effected upon
the Transfer Agent being satisfied with the documents of title and identity of
the person making the request. The Administrative Trustees may at any time
designate additional Transfer Agents or rescind the designation of any Transfer
Agent or approve a change in the office through which any Transfer Agent acts.
Atlantic Capital will not be required to (i) issue, register the transfer
of, or exchange any Preferred Securities during a period beginning at the
opening of business 15 calendar days before the day of mailing of a notice of
redemption of any Preferred Securities called for redemption and ending at the
close of business on the day of such mailing or (ii) register the transfer of or
exchange any Preferred Securities so selected for redemption, in whole or in
part, except the unredeemed portion of any such Preferred Securities being
redeemed in part. (Section 5.03(c)).
Concerning the Property Trustee
The Company maintains deposit accounts and conducts other banking
transactions with the Property Trustee in the ordinary course of their
businesses. In addition, the Property Trustee acts as indenture trustee under
the Mortgage and Deed of Trust dated as of January 15, 1937 pursuant to which
the Company's First Mortgage Bonds are issued, under the Junior Subordinated
Indenture dated as of October 1, 1996 pursuant to which the Company's 8.25%
Junior Subordinated Deferrable Interest Debentures were issued and under the
Indenture dated as of March 1,
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1997 pursuant to which the Company's Unsecured Medium Term Notes are issued.
The Property Trustee also acts as the Guarantee Trustee and the Debenture
Trustee.
Governing Law
The Preferred Securities will be governed by and construed in accordance
with the internal laws of the State of Delaware.
Miscellaneous
Application has been made to list the Preferred Securities on the NYSE.
The Administrative Trustees are authorized and directed to conduct the
affairs of Atlantic Capital and to operate Atlantic Capital so that Atlantic
Capital will not be deemed to be an "investment company" required to be
registered under the 1940 Act or taxed as a corporation for United States
federal income tax purposes and so that the Subordinated Debentures will be
treated as indebtedness of the Company for United States federal income tax
purposes. In this connection, the Administrative Trustees and the Company are
authorized to take any action, not inconsistent with applicable law, the
Certificate of Trust or the Trust Agreement, that the Administrative Trustees
and the Company determine in their discretion to be necessary or desirable for
such purposes, as long as such action does not materially adversely affect the
interests of the Holders of the Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
DESCRIPTION OF THE GUARANTEE
The following summary of certain provisions of the Guarantee does not
purport to be complete and is subject in all respects to the provisions of, and
is qualified in its entirety by reference to, the Guarantee, including the
definitions therein of certain terms, and the Trust Indenture Act. Whenever
particular Sections or defined terms of the Guarantee are referred to, such
Sections or defined terms are incorporated herein by reference. The Guarantee
is filed as an exhibit to the Registration Statement of which this Prospectus
forms a part.
General
The Guarantee will be qualified as an indenture under the Trust Indenture
Act. The Bank of New York will act as indenture trustee under the Guarantee for
the purpose of compliance with the Trust Indenture Act (the "Guarantee Trustee")
and will hold the Guarantee for the benefit of the Holders of the Preferred
Securities.
The Company will agree fully and unconditionally to the extent set forth
herein, to pay the Guarantee Payments (as defined below) in full to the Holders
of the Preferred Securities (except to the extent paid by or on behalf of
Atlantic Capital), 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 Atlantic Capital (the "Guarantee Payments"), will be subject to the Guarantee
(without duplication): (i) any accumulated and unpaid Distributions required to
be paid on the Preferred Securities, but only to the extent the Property Trustee
has available in the payment account sufficient funds to make such payment, (ii)
the Redemption Price with respect to any Preferred Securities called for
redemption by Atlantic Capital, but only to the extent the Property Trustee has
available in the payment account sufficient funds to make such payment and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of
Atlantic Capital, the lesser of (a) the aggregate of the liquidation amount and
all accumulated and unpaid Distributions on the Preferred Securities to the date
of payment and (b) the amount of assets of Atlantic Capital remaining available
for distribution to Holders of Preferred Securities in liquidation of Atlantic
Capital. The Company's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Company to the Holders of
Preferred Securities or by causing Atlantic Capital to pay such amounts to such
Holders. (Section 5.01).
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The Guarantee will be a guarantee with respect to the Preferred Securities
issued by Atlantic Capital 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 Atlantic Capital 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 Atlantic Capital, Atlantic
Capital will not have funds available to pay Distributions on the Preferred
Securities. The Guarantee will rank subordinate and junior in right of payment
to Senior Indebtedness of the Company (except those made pari passu by their
terms). See "Status of the Guarantee." The 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 Guarantee,
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
Trust Securities having a majority of the liquidation amount of the Trust
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 exercising of any trust or power conferred upon the Guarantee
Trustee under the Guarantee. Any Holder of Trust Securities may institute a
legal proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against Atlantic Capital,
the Guarantee Trustee or any other person or entity. (Section 5.04).
The Company, as Guarantor, will be required to provide to the Guarantee
Trustee an annual 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 Atlantic Capital. The Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any
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Holder of Preferred Securities must restore payment of any sums paid under the
Preferred Securities or the Guarantee. (Section 7.01).
Status of the Guarantee
The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all Senior Indebtedness
of the Company to the same extent as the Subordinated Debentures. (Section
6.01). The Trust Agreement provides that each Holder of Preferred Securities by
acceptance thereof agrees to the subordination provisions and other terms of the
Guarantee.
The Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity).
Governing Law
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
DESCRIPTION OF THE SUBORDINATED DEBENTURES
The following summary of the Subordinated Debentures and certain provisions
of the Indenture does not purport to be complete and is qualified in its
entirety by reference to the Indenture, including the definition therein of
certain terms and the Trust Indenture Act. Whenever particular sections or
defined terms in the Indenture are referred to herein, such sections or defined
terms are incorporated herein by reference. The Indenture is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
General
The Indenture provides for the issuance of subordinated debentures
(including the Subordinated Debentures), notes or other evidence of indebtedness
by the Company (each a "Debt Security") in an unlimited amount from time to
time. The Subordinated Debentures constitute a separate series under the
Indenture.
The Subordinated Debentures will be limited in aggregate principal amount
to the sum of the aggregate liquidation amount of the Trust Securities. The
Subordinated Debentures are unsecured, subordinated obligations of the Company
which rank junior to all of the Company's Senior Indebtedness. The Subordinated
Debentures will bear interest at the same rate, payable at the same times, as
the Distributions payable on the Trust Securities, and will have a maturity and
redemption provisions correlative to those of the Trust Securities.
The entire outstanding principal amount of the Subordinated Debentures will
become due and payable, together with any accrued and unpaid interest thereon,
on ____________, 2028. 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 Atlantic Capital, such Subordinated Debentures
will be issued in fully-registered certificated form in denominations of $25 and
integral multiples thereof and may be transferred or exchanged at the offices
described below.
Payments of principal and interest on Subordinated Debentures will be
payable, the transfer of Subordinated Debentures will be registrable, and
Subordinated Debentures will be exchangeable for Subordinated Debentures of
other denominations of a like aggregate principal amount, at the corporate trust
office of the Debenture Trustee in New York, 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 and that the payment in full of
principal with respect to
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any Subordinated Debenture will be made only upon surrender of such Subordinated
Debenture to the Debenture Trustee.
Optional Redemption
On or after ________________, 2003, the Company will have the option, at
any time and from time to time, to redeem the Subordinated Debentures, in whole
or in part, at a redemption price equal to 100% of the principal amount of the
Subordinated Debentures being redeemed, together with any accrued but unpaid
interest to the Redemption Date.
If a Special Event shall occur and be continuing, the Company shall have
the option to redeem the Subordinated Debentures, in whole but not in part, at a
redemption price equal to 100% of the principal amount of Subordinated
Debentures then outstanding plus any accrued and unpaid interest 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
Atlantic Capital pursuant to an order for the dissolution, termination or
liquidation of Atlantic Capital entered by a court of competent jurisdiction.
For so long as Atlantic Capital is the Holder of all the outstanding
Subordinated Debentures, the proceeds of any such redemption will be used by
Atlantic Capital to redeem Trust Securities in accordance with their terms. The
Company may not redeem less than all the Subordinated Debentures unless all
accrued and unpaid interest has been paid in full on all outstanding
Subordinated Debentures for all quarterly interest periods terminating on or
prior to the date of redemption.
Any optional redemption of Subordinated Debentures shall be made upon not
less than 30 nor more than 60 days' notice from the Debenture Trustee to the
Holders of Subordinated Debentures, as provided in the Indenture.
Interest
The Subordinated Debentures shall bear interest at the rate per annum set
forth on the cover page of this Prospectus. Such interest is payable quarterly
in arrears on March 31, June 30, September 30 and December 31 of each year,
commencing December 31, 1998.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months and for any period shorter than a full
month, on the basis of the actual number of days elapsed (Section 310). In the
event that any date on which interest is payable on the Subordinated Debentures
is not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day which is a Business Day, except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on the date the payment was originally payable (Section 113).
Option to Extend Interest Payment Period
The Company has the right under the Indenture to extend the interest
payment period from time to time on the Subordinated Debentures for an Extension
Period of up to 20 consecutive quarters during which period interest will be
compounded quarterly, provided that no such Extension Period shall extend beyond
the stated maturity of the Subordinated Debentures. At the end of an Extension
Period, the Company must pay all interest then accrued and unpaid (together with
interest thereon at the rate specified for the Subordinated Debentures
compounded quarterly, to the extent permitted by applicable law). However,
during any such Extension Period, the Company shall not (i) declare or pay any
dividend or distribution (other than a dividend or distribution in Common Stock
of the Company) on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock or (ii) make any payment of principal
of, interest or premium, if any, on, or repay, repurchase or redeem any
indebtedness that is pari passu with the Subordinated Debentures (including
other Debt Securities), or make any guarantee payments with respect to such
indebtedness. Prior to the termination of any such Extension Period, the Company
may further extend the interest payment period provided,
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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 Atlantic
Capital 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 Atlantic Capital to
send notice of such election to the Holders of Preferred Securities.
Payment of Expenses
In the Indenture the Company, as issuer of Subordinated Debentures, has
agreed to pay all debts and obligations (other than with respect to the Trust
Securities) and all costs, liabilities and expenses of Atlantic Capital
(including, but not limited to, all costs, liabilities and expenses relating to
the organization of Atlantic Capital, the fees and expenses of the Property
Trustee, the Delaware Trustee and the Administrative Trustees and all costs,
liabilities and expenses relating to the operation of Atlantic Capital (other
than with respect to payments due to the holders of the securities of a Trust
pursuant to the terms of such securities)) and to pay any and all taxes, duties,
assessments or other governmental charges of whatever nature (other than United
States withholding taxes) imposed by the United States or any other taxing
authority, so that the net amounts received and retained by Atlantic Capital
after paying such fees, costs, expenses, liabilities, debts and obligations will
be equal to the amounts Atlantic Capital would have received and retained had no
such fees, costs, expenses, liabilities, debts and obligations been incurred by
or imposed on Atlantic Capital. The foregoing obligations of the Company are for
the benefit of, and shall be enforceable by, any person to whom such fees,
costs, expenses, liabilities, debts and obligations are owed (each a "Creditor")
whether or not such Creditor has received notice thereof. Any such Creditor may
enforce such obligations of the Company directly against the Company, and the
Company irrevocably waives any right or remedy to require that any such Creditor
take any action against Atlantic Capital or any other person before proceeding
against the Company. The Company shall execute such additional agreements as may
be necessary to give full effect to the foregoing. (Section 312).
Defeasance
The principal amount of any series of Debt Securities issued under the
Indenture will be deemed to have been paid for purposes of the Indenture and the
entire indebtedness of the Company in respect thereof will be deemed to have
been satisfied and discharged, if there shall have been irrevocably deposited
with the Debenture Trustee or any paying agent, in trust: (i) money in an
amount which will be sufficient, or (ii) in the case of a deposit made prior to
the maturity of the Subordinated Debentures, Government Obligations (as defined
below), which do not contain provisions permitting the redemption or other
prepayment thereof at the option of the issuer thereof, the principal of and the
interest on which when due, without any regard to reinvestment thereof, will
provide moneys which, together with the money, if any, deposited with or held by
the Debenture Trustee, will be sufficient, or (iii) a combination of (i) and
(ii) which will be sufficient, to pay when due the principal of and premium, if
any, and interest, if any, due and to become due on the Debt Securities of such
series that are outstanding; provided that if such deposit shall have been made
prior to the maturity of such Debt Securities, the Company shall have delivered
to the Debenture Trustee, among other things, an opinion of counsel to the
effect that the holders of such Debt Securities will not recognize income, gain
or loss for federal income tax purposes as a result of the satisfaction and
discharge of the Company's indebtedness in respect of such Debt Securities, and
such holders will be subject to federal income taxation on the same amounts and
in the same manner and at the same times as if such satisfaction and discharge
had not occurred. For this purpose, "Government Obligations" include direct
obligations of, or obligations unconditionally guaranteed by, the United States
of America entitled to the benefit of the full faith and credit thereof and
certificates, depositary receipts or other instruments which evidence a direct
ownership interest in such obligations or in any specific interest or principal
payments due in respect thereof. (Section 701).
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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 and $72,164,950 principal amount of 8.25% Junior
Subordinated Deferrable Interest Debentures of the Company issued under its
Junior Subordinated Indenture dated as of October 1, 1996 with The Bank of New
York, Trustee), 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 (other than trade accounts payable in the ordinary course of
business), and in each case, amendments, renewals, extensions, modifications and
refundings of any such indebtedness or obligations, whether existing as of the
date of the Indenture or subsequently incurred by the Company unless, in the
case of any particular indebtedness, renewal, extension or refunding, the
instrument creating or evidencing the same or the assumption or guarantee of the
same expressly provides that such indebtedness, renewal, extension or refunding
is not superior in right of payment to or is pari passu with the Subordinated
Debentures; provided that the Company's obligations under any Guarantee shall
not be deemed to be Senior Indebtedness. (Section 101).
Consolidation, Merger, and Sale of Assets
Under the terms of the Indenture, the Company may not consolidate with or
merge into any other corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any entity, unless (i) the corporation
formed by such consolidation or into which the Company is merged or the entity
which acquires by conveyance or transfer, or which leases, the property and
assets of the Company substantially as an entirety shall be a entity organized
and validly existing under the laws of any domestic jurisdiction and such entity
expressly assumes the Company's obligations on all Debt Securities and under the
Indenture, (ii) immediately after giving effect to the transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing, and (iii) the
Company shall have delivered to the Debenture Trustee certificates and opinions
required by the Indenture. (Section 1101).
Events of Default
Each of the following will constitute an Event of Default under the
Indenture with respect to the Debt Securities of any series: (i) failure to pay
any interest on the Debt Securities of such series within 30 days after the same
becomes due and payable, provided that deferral of payment during an Extension
Period will not constitute an Event of Default; (ii) failure to pay principal or
premium, if any, on the Debt Securities of such series when due and payable;
(iii) failure to perform, or breach of, any other covenant or warranty of the
Company in the Indenture (other than a covenant or warranty of the Company in
the Indenture solely for the benefit of one or more series of Debt
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Securities other than such series) for 60 days after written notice to the
Company by the Debenture Trustee, or to the Company and the Debenture Trustee by
the Holders of at least 10% in principal amount of the Debt Securities of such
series outstanding under the Indenture as provided in the Indenture; (iv) the
entry by a court having jurisdiction in the premises of (a) a decree or order
for relief in respect of the Company in an involuntary case or proceeding under
any applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or (b) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition by one or more persons
other than the Company seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official for the Company or for any substantial
part of its property, or ordering the winding up or liquidation of its affairs,
and any such decree or order for relief or any such other decree or order shall
have remained unstayed and in effect for a period of 90 consecutive days; and
(v) the commencement by the Company of a voluntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree or order for relief in
respect of the Company in a case or other similar proceeding or to the
commencement of any bankruptcy or insolvency case or proceeding against it under
any applicable federal or state law or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable federal or
state law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Company or of any
substantial part of its property, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the authorization of such action by
the Company's board of directors. (Section 801).
An Event of Default with respect to the Debt Securities of a particular
series may not necessarily constitute an Event of Default with respect to Debt
Securities of any other series issued under the Indenture.
If an Event of Default due to the default in payment of principal of or
interest on any series of Debt Securities or due to the default in the
performance or breach of any other covenant or warranty of the Company
applicable to the Debt Securities of such series but not applicable to all
series occurs and is continuing, then either the Debenture Trustee or the
Holders of 25% in principal amount of the outstanding Debt Securities of such
series may declare the principal of all of the Debt Securities of such series
and interest accrued thereon to be due and payable immediately (subject to the
subordination provisions of the Indenture). If an Event of Default due to the
default in the performance of any other covenants or agreements in the Indenture
applicable to all outstanding Debt Securities or due to certain events of
bankruptcy, insolvency or reorganization of the Company has occurred and is
continuing, either the Debenture Trustee or the Holders of not less than 25% in
principal amount of all outstanding Debt Securities, considered as one class,
and not the Holders of the Debt Securities of any one of such series may make
such declaration of acceleration (subject to the subordination provisions of the
Indenture).
If, in the event of an Event of Default, the Debenture Trustee fails, or
the Holders of not less than 25% of the aggregate principal amount of the then
outstanding Debt Securities of such series fail, to declare the principal due
and payable immediately, 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;
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(b) the principal of and premium, if any, on any Debt
Securities of such series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
prescribed therefor in such Debt Securities;
(c) interest upon overdue interest at the rate or rates
prescribed therefor in such Debt Securities, to the extent that payment of
such interest is lawful; and
(d) all amounts due to the Debenture Trustee under the
Indenture; and
(ii) any other Event or Events of Default with respect to Debt
Securities of such series, other than the nonpayment of the principal of the
Debt Securities of such series which has become due solely by such declaration
of acceleration, have been cured or waived as provided in the Indenture.
(Section 802).
Subject to the provisions of the Indenture relating to the duties of the
Debenture Trustee in case an Event of Default shall occur and be continuing, the
Debenture Trustee will be under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any of the Holders of
the Subordinated Debentures, unless such Holders shall have offered to the
Debenture Trustee reasonable indemnity. (Section 903). If an Event of Default
has occurred and is continuing in respect of a series of Debt Securities,
subject to such provisions for the indemnification of the Debenture Trustee, the
Holders of a majority in principal amount of the outstanding Debt Securities of
such series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
exercising any trust or power conferred on the Debenture Trustee, with respect
to the Debt Securities of such series; provided that if an Event of Default
occurs and is continuing with respect to more than one series of Debt
Securities, the Holders of a majority of the aggregate principal amount of the
outstanding Debt Securities of all such series, considered as one class, will
have the right to make such direction, and not the Holders of the Debt
Securities of any one of such series; and provided, further, that such direction
will not be in conflict with any rule of law or with the Indenture. (Section
812).
No Holder of Debt Securities of any series will have any right to institute
any proceeding with respect to the Indenture, or for the appointment of a
receiver or a trustee, or for any other remedy thereunder, unless (i) such
Holder has previously given to the Debenture Trustee written notice of a
continuing Event of Default with respect to the Debt Securities of such series,
(ii) the Holders of not less than a majority in aggregate principal amount of
the outstanding Debt Securities of all series in respect of which an Event of
Default shall have occurred and be continuing, considered as one class, have
made written request to the Debenture Trustee, and such Holder or Holders have
offered reasonable indemnity to the Debenture Trustee to institute such
proceeding in respect of such Event of Default in its own name as trustee and
(iii) the Debenture Trustee has failed to institute any proceeding, and has not
received from the Holders of a majority of the aggregate principal amount of the
outstanding Debt Securities of such series a direction inconsistent with such
request, within 60 days after such notice, request and offer. (Section 807).
However, such limitations do not apply to a suit instituted by a Holder of a
Debt Security for the enforcement of payment of the principal of or any premium
or interest on such Debt Security on or after the applicable due date specified
in such Debt Security. (Section 808).
The Company will be required to furnish to the Debenture Trustee annually a
statement by an appropriate officer as to such officer's knowledge of the
Company's compliance with all conditions and covenants under the Indenture, such
compliance to be determined without regard to any period of grace or requirement
of notice under the Indenture. (Section 606).
Enforcement of Certain Rights by Holders of Preferred Securities
If an Event of Default has occurred and is continuing, then the Holders of
Preferred Securities would rely on the enforcement by the Property Trustee or
the Debenture Trustee, acting for the benefit of the Property Trustee, of its
rights as a holder of the Subordinated Debentures against the Company.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
principal of or interest on the Subordinated Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption, on the
Redemption Date), then a Holder of Preferred Securities may directly institute
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a proceeding against the Company, without first proceeding against Atlantic
Capital or the Property Trustee, for enforcement of payment to such Holder of
the principal of or interest on the Subordinated Debentures having a principal
amount equal to the aggregate liquidation amount of the Preferred Securities of
such Holder after the respective due dates specified in the Subordinated
Debentures. In connection with such an enforcement proceeding, the Company will
be subrogated to the rights of such Holder of Preferred Securities with respect
to payments on the Preferred Securities to the extent of any payment made by the
Company to such Holder of Preferred Securities in such proceeding.
The Holders of the Preferred Securities would not be able to exercise
directly against the Company any rights other than those set forth in the
preceding paragraph available to the holders of the Subordinated Debentures
unless the Property Trustee or the Debenture Trustee, acting for the benefit of
the Property Trustee, fails to do so for 60 days. In such event, to the fullest
extent permitted by law, the holders of at least 25% of the aggregate
liquidation amount of the outstanding Preferred Securities would have the right
to directly institute proceedings for enforcement of such rights.
Modification and Waiver
Without the consent of any Holder of Debt Securities, the Company and the
Debenture Trustee may enter into one or more supplemental indentures for any of
the following purposes: (i) to evidence the assumption by any permitted
successor to the Company of the covenants of the Company in the Indenture and in
the Debt Securities; or (ii) to add one or more covenants of the Company or
other provisions for the benefit of the Holders of outstanding Debt Securities
or to surrender any right or power conferred upon the Company by the Indenture;
or (iii) to add any additional Events of Default with respect to outstanding
Debt Securities; or (iv) to change or eliminate any provision of the Indenture
or to add any new provision to the Indenture, provided that if such change,
elimination or addition will affect adversely the interests of the Holders of
Debt Securities of any series in any material respect, such change, elimination
or addition will become effective with respect to such series only (a) when the
consent of the Holders of Debt Securities of such series has been obtained in
accordance with the Indenture, or (b) when no Debt Securities of such series
remain outstanding under the Indenture; or (v) to provide collateral security
for all but not part of the Debt Securities; (vi) to establish the form or terms
of Debt Securities of any other series as permitted by the Indenture; or (vii)
to provide for the authentication and delivery of bearer securities and coupons
appertaining thereto representing interest, if any, thereon and for the
procedures for the registration, exchange and replacement thereof and for the
giving of notice to, and the solicitation of the vote or consent of, the Holders
thereof, and for any and all other matters incidental thereto; or (viii) to
evidence and provide for the acceptance of appointment of a successor Debenture
Trustee under the Indenture with respect to the Debt Securities of one or more
series and to add to or change any of the provisions of the Indenture as shall
be necessary to provide for or to facilitate the administration of the trusts
under the Indenture by more than one trustee; or (ix) to provide for the
procedures required to permit the utilization of a noncertificated system of
registration for the Debt Securities of all or any series; or (x) to change any
place where (a) the principal of and premium, if any, and interest, if any, on
all or any series of Debt Securities shall be payable, (b) all or any series of
Debt Securities may be surrendered for registration of transfer or exchange and
(c) notices and demands to or upon the Company in respect of Debt Securities and
the Indenture may be served; or (xi) to cure any ambiguity or inconsistency or
to add or change any other provisions with respect to matters and questions
arising under the Indenture, provided such changes or additions shall not
adversely affect the interests of the Holders of Debt Securities of any series
in any material respect. (Section 1201).
The Holders of at least a majority of the aggregate principal amount of the
outstanding Debt Securities of all series may waive compliance by the Company
with certain restrictive provisions of the Indenture. (Section 607). The
Holders of not less than a majority in principal amount of the outstanding Debt
Securities of any series may waive any past default under the Indenture with
respect to such series, except a default in the payment of principal, premium,
or interest and certain covenants and provisions of the Indenture that cannot be
modified or be amended without the consent of the Holder of each outstanding
Debt Security of such series affected. (Section 813).
Without limiting the generality of the foregoing, if the Trust Indenture
Act is amended after the date of the Indenture in such a way as to require
changes to the Indenture or the incorporation therein of additional provisions
or so as to permit changes to, or the elimination of, provisions which, at the
date of the Indenture or at any time
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thereafter, were required by the Trust Indenture Act to be contained in the
Indenture, the Indenture will be deemed to have been amended so as to conform to
such amendment of the Trust Indenture Act or to effect such changes, additions
or elimination, and the Company and the Debenture Trustee may, without the
consent of any Holders, enter into one or more supplemental indentures to
evidence or effect such amendment. (Section 1201).
Except as provided above, the consent of the Holders of not less than a
majority of the aggregate principal amount of the outstanding Debt Securities of
all series, considered as one class, is required for the purpose of adding any
provisions to, or changing in any manner, or eliminating any of the provisions
of, the Indenture or modifying in any manner the rights of the Holders of such
Debt Securities under the Indenture pursuant to one or more supplemental
indentures; provided that if less than all of the series of outstanding Debt
Securities are affected directly by a proposed supplemental indenture, then the
consent only of the Holders of a majority of the aggregate principal amount of
outstanding Debt Securities of all series so directly affected, considered as
one class, will be required; and provided further, that no such amendment or
modification may (i) change the stated maturity of the principal of, or any
installment of principal of or interest on, any Debt Security, or reduce the
principal amount thereof or the rate of interest thereon (or the amount of any
installment of interest thereon) or change the method of calculating such rate
or reduce any premium payable upon the redemption thereof, or change the coin or
currency (or other property) in which any Debt Security or any premium or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the stated maturity of any Debt
Security (or, in the case of redemption, on or after the Redemption Date)
without, in any such case, the consent of the Holder of such Debt Security, (ii)
reduce the percentage in principal amount of the outstanding Debt Security of
any series, (or, if applicable, in liquidation amount of Preferred Securities)
the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any waiver of
compliance with any provision of the Indenture or any default thereunder and its
consequences, or reduce the requirements for quorum or voting, without, in any
such case, the consent of the Holder of each outstanding Debt Security of such
series, or (iii) modify certain of the provisions of the Indenture relating to
supplemental indentures, waivers of certain covenants and waivers of past
defaults with respect to the Debt Security of any series, without the consent of
the Holder of each outstanding Debt Security affected thereby. A supplemental
indenture that changes or eliminates any covenant or other provision of the
Indenture which has expressly been included solely for the benefit of one or
more particular series of Debt Securities, or modifies the rights of the Holders
of Debt Securities of such series with respect to such covenant or other
provision, will be deemed not to affect the rights under the Indenture of the
Holders of the Debt Securities of any other series. (Section 1202).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver under the
Indenture, or whether a quorum is present at the meeting of the Holders of Debt
Securities, Debt Securities owned by the Company or any other obligor upon the
Debt Securities or any affiliate of the Company or of such other obligor (unless
the Company, such affiliate or such obligor owns all Debt Securities outstanding
under the Indenture, determined without regard to this provision) shall be
disregarded and deemed not to be outstanding. (Section 101).
If the Company shall solicit from Holders any request, demand,
authorization, direction, notice, consent, election, waiver or other act, the
Company may, at its option, fix in advance a record date for the determination
of Holders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other such act, but the Company shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of the outstanding Debt
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the outstanding Debt Securities shall be computed as of the record date.
Any request, demand, authorization, direction, notice, consent, election, waiver
or other Act of a Holder shall bind every future Holder of the same Debt
Security and the Holder of every Debt Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Debenture Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Debt Security. (Section 104).
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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 with respect to the Debt
Securities of any series by the Holders of a majority of the principal amount of
the outstanding Debt Securities of such series. No resignation or removal of
the Debenture Trustee and no appointment of a successor trustee will become
effective until the acceptance of appointment by a successor trustee in
accordance with the requirements of the Indenture. So long as no Event of
Default or event which, after notice or lapse of time, or both, would become an
Event of Default has occurred and is continuing and except with respect to a
Debenture Trustee appointed by the Holders, if the Company has delivered to the
Debenture Trustee a resolution of its board of directors appointing a successor
trustee and such successor has accepted such appointment in accordance with the
terms of the Indenture, the Debenture Trustee will be deemed to have resigned
and the successor will be deemed to have been appointed as trustee in accordance
with the Indenture. (Section 910).
Governing Law
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York.
Concerning the Debenture Trustee
The Debenture Trustee under the Indenture is The Bank of New York. In
addition, The Bank of New York 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 the material United States federal income
tax consequences that may be relevant to the purchase, ownership and disposition
of the Preferred Securities and where noted constitutes the opinion of Simpson
Thacher & Bartlett, special United States federal income tax counsel to the
Company and Atlantic Capital ("Tax Counsel"). Unless otherwise stated, this
summary deals only with Preferred Securities held as capital assets by United
States Persons (defined below) who purchase the Preferred Securities upon
original issuance at their original offering price. As used herein, a "United
States Person" means (i) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, (iii) an estate
the income of which is subject to United States federal income taxation
regardless of its source, or (iv) any trust if a court within the United States
is able to exercise primary supervision over the administration of such trust
and one or more United States Persons have the authority to control all the
substantial decisions of such trust. The tax treatment of a holder may vary
depending on his, her or its particular situation. This summary does not address
all the tax consequences that may be relevant to a particular holder or to
holders who may be subject to special tax treatment, such as banks, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, tax-exempt investors, persons holding Preferred
Securities as part of a hedging, conversion or constructive sale transaction or
a straddle or foreign investors. In addition, this summary does not include any
description of any alternative minimum tax consequences or the tax laws of any
state, local or foreign government that may be applicable to a holder of
Preferred Securities. This summary is based on the Internal Revenue Code of
1986, as amended (the "Code"), the Treasury regulations promulgated thereunder
and administrative and judicial interpretations thereof, as of the date hereof,
all of which are subject to change, possibly on a retroactive basis.
The authorities on which this summary is based are subject to various
interpretations and the opinions of Tax Counsel are not binding on the Internal
Revenue Service ("IRS") or the courts, either of which could take a contrary
position. Moreover, no rulings have been or will be sought by the Company from
the IRS with respect to the transactions described herein. Accordingly, there
can be no assurance that the IRS will not challenge the opinions expressed
herein or that a court would not sustain such a challenge. Nevertheless, Tax
Counsel has advised that it is of the view that, if challenged, the opinions
expressed herein would be sustained by a court with jurisdiction in a properly
presented case.
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HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE PREFERRED
SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN, AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR
OTHER TAX LAWS. FOR A DISCUSSION OF THE POSSIBLE REDEMPTION OF THE PREFERRED
SECURITIES UPON THE OCCURRENCE OF CERTAIN TAX EVENTS SEE "DESCRIPTION OF THE
PREFERRED SECURITIES SPECIAL EVENT REDEMPTION OR DISTRIBUTION."
Classification of Atlantic Capital
In connection with the issuance of the Preferred Securities, Tax Counsel is
of the opinion that under current law and assuming full compliance with the
terms of the Trust Agreement and other documents, and based upon certain facts
and assumptions contained in such opinion, Atlantic Capital will be classified
as a grantor trust for United States federal income tax purposes and not as an
association taxable as a corporation. Accordingly, for United States federal
income tax purposes, each beneficial owner (a "holder") of Preferred Securities
generally will be treated as owning an undivided beneficial interest in the
Subordinated Debentures and, thus, will be required to include in its gross
income its pro rata share of the interest income or original issue discount that
is paid or accrued on the Subordinated Debentures. See " Interest Income and
Original Issue Discount."
Classification of the Subordinated Debentures
The Company, Atlantic Capital and the holders of the Preferred Securities
(by acceptance of a beneficial interest in a Preferred Security) will agree to
treat the Subordinated Debentures as indebtedness for all United States tax
purposes. Recently, a petition was filed in the United States Tax Court as a
result of a challenge by the IRS of the petitioner's treatment as indebtedness
of a loan issued in circumstances with similarities to the issuance of the
Subordinated Debentures. Nevertheless, in connection with the issuance of the
Subordinated Debentures, Tax Counsel is of the opinion that under current law,
and based on certain representations, facts and assumptions set forth in such
opinion, the Subordinated Debentures will be classified as indebtedness for
United States federal income tax purposes.
Interest Income and Original Issue Discount
It is anticipated that the Subordinated Debentures will not be issued with
an issue price that is less than their stated redemption price at maturity. In
such case, under applicable Treasury regulations, the Subordinated Debentures
will not be considered to have been issued with OID within the meaning of
section 1273(a) of the Code. Accordingly, except as set forth below, stated
interest on the Subordinated Debentures generally will be taxable to a holder as
ordinary income at the time it is paid or accrued in accordance with such
holder's regular method of tax accounting.
If, however, the Company exercises its right to defer payments of interest
on the Subordinated Debentures, the Subordinated Debentures will become OID
instruments at such time and all holders will be required to accrue the stated
interest on the Subordinated Debentures on a daily economic accrual basis (using
the constant-yield-to-maturity method of accrual described in section 1272 of
the Code) during the Extension Period even though the Company will not pay such
interest until the end of the Extension Period, and even though some holders may
use the cash method of tax accounting. Moreover, thereafter the Subordinated
Debentures will be taxed as OID instruments for as long as they remain
outstanding. Thus, even after the end of the Extension Period, all holders would
be required to continue to include the stated interest (and any "de minimis
OID") on the Subordinated Debentures (and any "de minimis OID") in income on a
daily economic accrual basis, regardless of their method of tax accounting and
in advance of receipt of the cash attributable to such interest income. Under
the OID economic accrual rules, a holder would accrue an amount of interest
income each year that approximates the stated interest payments called for under
the terms of the Subordinated Debentures, and actual cash payments of interest
on the Subordinated Debentures would not be reported separately as taxable
income. Any amount of OID included in a holder's gross income (whether or not
during an Extension Period) with respect to a Preferred Security will increase
33
<PAGE>
such holder's tax basis in such Preferred Security, and the amount of
distributions received by a holder in respect of such accrued OID will reduce
the tax basis of such Preferred Security.
The Treasury regulations described above have not yet been addressed in any
rulings or other interpretations by the IRS, and it is possible that the IRS
could take a contrary position. For example, if the IRS were to assert
successfully that the stated interest on the Subordinated Debentures was OID
regardless of whether the Company exercises its option to defer payments of
interest on such Subordinated Debentures, all holders of Preferred Securities
would be required to include such stated interest in income on a daily economic
accrual basis as described above.
Corporate holders of Preferred Securities will not be entitled to a
dividends-received deduction with respect to any income recognized by such
holders with respect to the Preferred Securities.
Distribution of Subordinated Debentures or Cash upon Liquidation of
Atlantic Capital
As described under the caption "Description of the Preferred Securities"
Subordinated Debentures may be distributed to holders in exchange for the
Preferred Securities and in liquidation of Atlantic Capital. Provided Atlantic
Capital is classified as a grantor trust, such a distribution would generally be
non-taxable, and would result in the holder receiving directly its pro rata
share of the Subordinated Debentures previously held indirectly through Atlantic
Capital, with a holding period and aggregate tax basis equal to the holding
period and aggregate tax basis such holder had in its Preferred Securities
before such distribution. If, however, a Tax Event occurs which results in
Atlantic Capital being treated as an association taxable as a corporation, the
distribution would constitute a taxable event to holders of Preferred Securities
and the Company could, at its option, redeem the Subordinated Debentures and
distribute the resulting cash in liquidation of Atlantic Capital.
A holder would accrue interest in respect of the Subordinated Debentures
received from Atlantic Capital in the manner described above under " Interest
Income and Original Issue Discount."
Under certain circumstances described herein (see "Description of Preferred
Securities"), the Subordinated Debentures may be redeemed for cash, with the
proceeds of such redemption distributed to holders in redemption of their
Preferred Securities. Such a redemption would constitute a taxable disposition
of the redeemed Preferred Securities for United States federal income tax
purposes, and a holder would recognize gain or loss as if it sold such redeemed
Preferred Securities for cash. See " Sales of Preferred Securities."
Sales of Preferred Securities
A holder that sells Preferred Securities will recognize gain or loss equal
to the difference between the amount realized by the holder on the sale or
redemption of the Preferred Securities (except for an amount equal to any
accrued but unpaid interest on such holder's allocable share of the Subordinated
Debentures that such holder has not included in income previously, which will be
taxable as such) and the holder's adjusted tax basis in the Preferred Securities
sold or redeemed. Such gain or loss generally will be a capital gain or loss and
generally will be a long-term capital gain or loss if the Preferred Securities
have been held for more than one year. Capital gains of individuals derived with
respect to capital assets held for more than one year are eligible for reduced
rates of taxation. Holders should consult their own tax advisors regarding the
capital gains rates applicable to them. Subject to certain limited exceptions,
capital losses cannot be applied to offset ordinary income for United States
federal income tax purposes.
Non-United States Holders
As used herein, the term "Non-United States Holder" means any person that
is not a United States Person. As discussed above, the Preferred Securities will
be treated as evidence of an indirect beneficial ownership interest in the
Subordinated Debentures. See " Classification of Atlantic Capital." Thus, under
present United States federal income tax law, and subject to the discussion
below concerning backup withholding:
34
<PAGE>
(a) no withholding of United States federal income tax will be required
with respect to the payment by the Company or any paying agent of principal
or interest (which for purposes of this discussion includes any OID) on the
Preferred Securities (or the Subordinated Debentures) to a Non-United
States Holder, provided (i) that the beneficial owner of the Preferred
Securities ("Beneficial Owner") does not actually or constructively own 10%
or more of the total combined voting power of all classes of stock of the
Company entitled to vote within the meaning of section 871(h)(3) of the
Code and the regulations thereunder, (ii) the Beneficial Owner is not a
controlled foreign corporation that is related to the Company through stock
ownership, (iii) the Beneficial Owner is not a bank whose receipt of
interest on the Subordinated Debentures is described in section
881(c)(3)(A) of the Code and (iv) the Beneficial Owner satisfies the
statement requirement (described generally below) set forth in section
871(h) and section 881(c) of the Code and the regulations thereunder; and
(b) no withholding of United States federal income tax will be required
with respect to any gain realized by a Non-United States Holder upon the
sale or other disposition of the Preferred Securities (or the Subordinated
Debentures).
To satisfy the requirement referred to in (a)(iv) above, the Beneficial
Owner, or a financial institution holding the Preferred Securities on behalf of
such owner, must provide, in accordance with specified procedures, to Atlantic
Capital or its paying agent, a statement to the effect that the Beneficial Owner
is not a United States Person. These requirements will be met if (1) the
Beneficial Owner provides his name and address, and certifies, under penalties
of perjury, that it is not a United States Person (which certification may be
made on an IRS Form W-8 (or successor form)) or (2) a financial institution
holding the Preferred Securities on behalf of the Beneficial Owner certifies,
under penalties of perjury, that such statement has been received by it and
furnishes a paying agent with a copy thereof. Under final Treasury regulations
("Final Regulations"), the statement requirement referred to in (a)(iv) above
may also be satisfied with other documentary evidence for interest paid after
December 31, 1999 with respect to an offshore account or through certain foreign
intermediaries.
If a Non-United States Holder cannot satisfy the requirements of the
"portfolio interest" exception described in (a) above, payments of premium, if
any, and interest (including any OID) made to such Non-United States Holder will
be subject to a 30% United States withholding tax unless the Beneficial Owner
provides the Company or its paying agent, as the case may be, with a properly
executed (1) IRS Form 1001 (or successor form) claiming an exemption from, or a
reduction of, such withholding tax under the benefit of an applicable tax treaty
or (2) IRS Form 4224 (or successor form) stating that interest paid on the
Preferred Securities (or the Subordinated Debentures) is not subject to such
withholding tax because it is effectively connected with the Beneficial Owner's
conduct of a trade or business in the United States. Under the Final
Regulations, Non-United States Holders will generally be required to provide IRS
Form W-8 in lieu of IRS Form 1001 and IRS Form 4224, although alternative
documentation may be applicable in certain situations.
If a Non-United States Holder is engaged in a trade or business in the
United States and interest on the Preferred Securities (or Subordinated
Debentures) is effectively connected with the conduct of such trade or business,
the Non-United States Holder, although exempt from the withholding tax discussed
above, will be subject to United States federal income tax on such interest on a
net income basis in the same manner as if it were a United States Person. In
addition, if such Non-United States Holder is a foreign corporation, it may be
subject to a branch profits tax equal to 30% (or lesser rate under an applicable
tax treaty) of its effectively connected earnings and profits for the taxable
year, subject to adjustments. For this purpose, such interest would be included
in such foreign corporation's earnings and profits.
Any gain realized upon the sale or other disposition of the Preferred
Securities (or the Subordinated Debentures) generally will not be subject to
United States federal income tax unless (i) such gain is effectively connected
with a trade or business in the United States of the Non-United States Holder,
(ii) in the case of a Non-United States Holder who is an individual, such
individual is present in the United States for 183 days or more in the taxable
year of such sale, exchange or retirement, and certain other conditions are met,
or (iii) in the case of any gain representing accrued interest on the
Subordinated Debentures, the requirements described above are not satisfied.
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Information Reporting and Backup Withholding
Income on the Preferred Securities held of record by United States Persons
(other than corporations and other exempt holders) will be reported annually to
such holders and to the IRS. Such income will be reported to holders on Forms
1099, which should be mailed to the holders of record prior by January 31
following each calendar year.
"Backup withholding" at a rate of 31% generally will apply to payments of
interest to non-exempt United States Persons unless the holder furnishes its
taxpayer identification number in the manner prescribed in applicable Treasury
regulations, certifies that such number is correct, certifies as to no loss of
exemption from backup withholding and meets certain other conditions.
In general, no information reporting or backup withholding will be required
with respect to payments made by Atlantic Capital or any paying agent to Non-
United States Holders if a statement described in (a)(iv) under "Non-United
States Holders" has been received and the payor does not have actual knowledge
that the beneficial owner is a United States Person.
In addition, backup withholding and information reporting may apply to the
proceeds from disposition of Preferred Securities (or Subordinated Debentures)
within the United States or conducted through certain United States related
financial intermediaries unless the statement described in (a)(iv) under "Non-
United States Holders" has been received (and the payor does not have actual
knowledge that the beneficial owner is a United States Person) or the holder
otherwise establishes an exemption.
Any amounts withheld from a holder of the Preferred Securities under the
backup withholding rules generally will be allowed as a refund or a credit
against such holder's United States federal income tax liability, provided the
required information is furnished to the IRS.
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
Atlantic Capital are being passed upon by Richards, Layton & Finger, Special
Delaware counsel for the Company and Atlantic Capital. The validity of the
Guarantee and the Subordinated Debentures will be passed upon for the Company by
Simpson Thacher & Bartlett, Counsel for the Company, and for the Underwriters by
Thelen Reid & Priest LLP. Simpson Thacher & Bartlett and Thelen Reid & Priest
LLP may rely as to matters of all laws, other than New York and federal laws,
upon the opinion of Pamela D. Joseph, Counsel for the Company. From
time to time, Thelen Reid & Priest LLP has represented the Company with respect
to matters unrelated to the Preferred Securities.
R. Franklin Balotti, a director for the Company, is a member of the law
firm of Richards, Layton & Finger, the Special Delaware counsel. However, Mr.
Balotti is not directly involved with the transactions described herein, other
than in his role as a director for the Company.
Certain matters relating to United States federal income tax considerations
will be passed upon for the Company and Atlantic Capital by Simpson Thacher &
Bartlett.
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, Legg Mason Wood Walker, Inc.and Wheat First
Union are acting as representatives (the "Representatives") has severally agreed
to purchase, and Atlantic Capital has agreed to sell to each of the
Underwriters, severally, the respective number of Preferred Securities set
opposite its name below:
36
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Number of
Underwriters Preferred Securities
------------ --------------------
Morgan Stanley & Co. Incorporated..
Legg Mason Wood Walker, Inc........
Wheat First Union..................
-----------
Total...........................
===========
The Underwriting Agreement provides that the several obligations of the
Underwriters to pay for and accept delivery of the Preferred Securities are
subject to the approval of certain legal matters by their counsel and to certain
other conditions. In the Underwriting Agreement, the several Underwriters have
agreed, subject to the terms and conditions set forth therein, to purchase all
the Preferred Securities offered hereby if any of the Preferred Securities are
purchased. In the event of default by an Underwriter, the Underwriting
Agreement provides that, in certain circumstances, the purchase commitments of
the nondefaulting Underwriters may be increased or Underwriting Agreement may be
terminated.
The Underwriters initially propose to offer all or part of the Preferred
Securities directly to the public at the price to public set forth on the cover
page of this Prospectus, and all or part to certain dealers at a price that
represents a concession not in excess of $ per Preferred Security. The
Underwriters may allow, and such dealers may reallow, a concession not in excess
of $ per Preferred Security to certain other dealers. After the initial
offering of the Preferred Securities, the offering price and other selling terms
may from time to time be varied by the Representatives.
Because the proceeds of the sale of the Preferred Securities will
ultimately be used to purchase the Subordinated Debentures, the Underwriting
Agreement provides that the Company will pay to the Underwriters as compensation
for their services, $ per Preferred Security (or $ in the aggregate);
provided that such compensation will be $ per Preferred Security sold to
certain institutions.
Prior to this offering, there has been no public market for the Preferred
Securities. Application has been made to list the Preferred Securities on the
NYSE. Listing is contingent upon meeting the requirements of the NYSE,
including those relating to distribution. In order to meet one such
requirement, the Underwriters have undertaken to sell lots of 100 or more
Preferred Securities to a minimum of 400 beneficial holders. Trading of the
Preferred Securities on the NYSE is expected to commence within a 30-day period
after the date of this Prospectus. The Underwriters have advised Atlantic
Capital 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.
The Company and Atlantic Capital have agreed that, during a period of
thirty days from the date of this Prospectus, neither will offer, sell, contract
to sell or otherwise dispose of any securities of the Company or Atlantic
Capital that are substantially similar to the Preferred Securities, or that are
convertible into or exchangeable for, or otherwise represent a right to receive,
any such securities, except in this offering or with the prior written consent
of the Underwriters.
Atlantic Capital and the Company have agreed to indemnify the Underwriters
against or contribute to payments that the Underwriters may be required to make
in respect of, certain liabilities, including liabilities under the 1933 Act.
In connection with the offering of the Preferred Securities, the
Underwriters and any selling group members and their respective affiliates may
engage in transactions that stabilize, maintain or otherwise affect the market
price of the Preferred Securities. Specifically, the Underwriters may overallot
by selling more Preferred Securities than they are committed to purchase from
Atlantic Capital. In such a case, to cover all or part of the short position,
the Underwriters may purchase Preferred Securities in the open market following
completion of the initial offering of
37
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the Preferred Securities. The Underwriters also may engage in stabilizing
transactions in which they bid for, and purchase, Preferred Securities at a
level above that which might otherwise prevail in the open market. Neither the
Company nor any Underwriter makes any representation or prediction as to the
direction or magnitude of any offer that the transactions described above may
have on the price of the Preferred Securities. The Underwriters are not
required to engage in any of the foregoing transactions and, if commenced, such
transactions may be discontinued at anytime without notice.
Certain of the Underwriters or their affiliates have provided from time to
time, and expect to provide in the future, investment or financial services to
the Company and its affiliates, for which such Underwriters or their affiliates
have received or will receive customary fees and commissions.
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, 1997, have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
38
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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.
Filing fee - Securities and Exchange Commission................... $ 8,850
Filing fee - New York Stock Exchange.............................. 17,700
Trustees' Fees, including counsel................................. 25,000
Company Counsel Fees.............................................. 145,000
Auditors' fees.................................................... 30,000
Rating agencies' fees............................................. 35,000
Printing, including Registration Statements prospectuses, 30,000
exhibits, etc....................................................
Blue Sky fees and expenses........................................ 50,000
Miscellaneous..................................................... 15,000
--------
Total expenses.................................................... $356,550
========
Item 15. Indemnification of Directors and Officers.
Directors and officers of the Company are entitled to be indemnified
against expenses and liabilities incurred by them under certain circumstances
pursuant to the By-Laws of the Company and pursuant to the New Jersey Business
Corporation Act.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Act"), may be permitted to officers, directors and
controlling persons of the Company pursuant to the By-Laws of the Company or the
New Jersey statutes or otherwise, the Company understands that it is the opinion
of the Securities and Exchange Commission that such indemnification is against
public policy as expressed in the Act and, therefore, unenforceable. In the
event that a claim for such indemnification (other than for the payment by the
Company of expenses incurred or paid by a director or officer or controlling
persons in the successful defense of any action, suit or proceeding) is asserted
against the Company by a director or officer or controlling persons with respect
to liabilities under the Act, in connection with the securities offered pursuant
to this Registration Statement, the Company will, unless in the opinion of
counsel for the Company the matter has theretofore been settled by a controlling
precedent, submit to a court of appropriate jurisdiction the question whether or
not such indemnification by it is against public policy as expressed in the Act
and, therefore, unenforceable and will be governed by the final adjudication of
such issue.
The Company has insurance policies under which its directors and officers
are insured against certain liabilities that may be incurred by them in their
capacities as such.
II-1
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Item 16. Exhibits
Exhibit
Number Description of Exhibits
- ------- -----------------------
1 - Form of Underwriting Agreement relating to the Preferred Securities.
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 Officer's Certificate establishing Subordinated Debentures
(including the form of Subordinated Debentures as Exhibit A).
4-F - Form of Preferred Securities (Exhibit C to Exhibit 4-B).
5-A - Opinion of Simpson Thacher & Bartlett, relating to the legality of
the Subordinated Debentures.
5-B - Opinion and Consent of Richards, Layton & Finger, Special Delaware
Counsel to the Company and Atlantic Capital.
8 - Opinion of Simpson Thacher & Bartlett, as to certain United States
federal income tax matters.
12-A - Computation of Ratio of Earnings to Fixed
Charges of the Company (filed with Form 10-Q for the
quarter ended June 30, 1998).*
12-B - Computation of Ratio of Earnings to Fixed Charges and Preferred
Dividends of the Company (filed with Form 10-Q for the quarter ended
June 30, 1998).*
23-A - Consent of Deloitte & Touche LLP
23-B - Consents of Simpson Thacher & Bartlett and Richards, Layton & Finger
are included in their respective opinions filed as Exhibits 5-A, 5-B
and 8, respectively.
25-A - Statement of Eligibility and Qualification on Form T-1 of The Bank
of New York relating to Amended and Restated Trust Agreement.
25-B - Statement of Eligibility and Qualification on Form T-1 of The Bank
of New York relating to Indenture.
25-C - Statement of Eligibility and Qualification on Form T-1 of The Bank
of New York relating to Guarantee Agreement.
- -----------------------
* Incorporated by reference pursuant to Rule 411.
II-2
<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-3
<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 September 15, 1998.
ATLANTIC CITY ELECTRIC COMPANY
(Registrant)
By /s/ Barbara S. Graham
--------------------------------------
(Barbara S. Graham, Senior Vice
President and Chief Financial Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ Howard E. Cosgrove Chairman of the Board, September 15, 1998
- ------------------------ Chief Executive Officer
(Howard E. Cosgrove) and Director
/s/ Barbara S. Graham Senior Vice President, September 15, 1998
- ------------------------ Chief Financial Officer
(Barbara S. Graham) and Director
/s/ James P. Lavin Controller and September 15, 1998
- ------------------------ Chief Accounting Officer
(James P. Lavin)
II-4
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Barry R. Elson Director September 15, 1998
- ---------------------------------
(Barry R. Elson)
/s/ Meredith I. Harlacher, Jr. Director September 15, 1998
- ---------------------------------
(Meredith I. Harlacher, Jr.)
/s/ Thomas S. Shaw Director September 15, 1998
- ---------------------------------
(Thomas S. Shaw)
II-5
<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 September 15, 1998.
Atlantic Capital II
By: Atlantic City Electric Company, as Depositor
By: /s/ Barbara S. Graham
--------------------------------------------------
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
- ------- -----------------------
1 - Form of Underwriting Agreement relating to the Preferred
Securities.
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 Officer's Certificate establishing Subordinated Debentures
(including the form of Subordinated Debentures as Exhibit A).
4-F - Form of Preferred Securities (Exhibit C to Exhibit 4-B).
5-A - Opinion of Simpson Thacher & Bartlett, relating to the legality of
the Subordinated Debentures.
5-B - Opinion and Consent of Richards, Layton & Finger, Special Delaware
Counsel to the Company and Atlantic Capital.
8 - Opinion of Simpson Thacher & Bartlett, as to certain United States
federal income tax matters.
12-A - Computation of Ratio of Earnings to Fixed Charges of the Company
(filed with Form 10-Q for the quarter ended June 30, 1998).*
12-B - Computation of Ratio of Earnings to Fixed Charges and Preferred
Dividends of the Company (filed with Form 10-Q for the quarter
ended June 30, 1998).*
23-A - Consent of Deloitte & Touche LLP.
23-B - Consents of Simpson Thacher & Bartlett and Richards, Layton &
Finger are included in their respective opinions filed as Exhibits
5-A, 5-B and 8, respectively.
25-A - Statement of Eligibility and Qualification on Form T-1 of The Bank
of New York relating to Amended and Restated Trust Agreement.
25-B - Statement of Eligibility and Qualification on Form T-1 of The Bank
of New York relating to Indenture.
25-C - Statement of Eligibility and Qualification on Form T-1 of The Bank
of New York relating to Guarantee Agreement.
- -----------------------
* Incorporated by reference pursuant to Rule 411.
II-7
<PAGE>
Exhibit 1
ATLANTIC CAPITAL II
Cumulative Trust Preferred Capital Securities
(Liquidation Amount $25.00 per Preferred Security)
UNDERWRITING AGREEMENT
----------------------
October , 1998
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Ladies and Gentlemen:
The undersigned, Atlantic Capital II (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 Atlantic City Electric Company, a New Jersey 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 Representative represents that it has been authorized by the Under
writers 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, subject to the terms and conditions stated
herein, that the Trust issue and sell to the Underwriters the Cumulative 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 The
Bank of
<PAGE>
New York, 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 The Bank of New York, 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 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 (hereinafter
defined), 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 Representative. 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 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 incorporated therein after the
date hereof and prior to the termination of the offering of the Securities
by the Underwriters.
2
<PAGE>
(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 information which are required to be included therein by the
Act and the Rules and Regulations and will conform, in all material
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 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
3
<PAGE>
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 New Jersey, with all
corporate authority, 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 Pennsylvania, being the only
jurisdiction 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.
(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 or the Company is a party
or by which either 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 or the Company 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
and the Guarantee as described in the Prospectus; has taken all corporate
action necessary therefor; and has obtained every 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 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
or any material adverse change, or development involving a prospective
4
<PAGE>
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; (3) no material loss or damage (whether or not insured) to the
property of the Company has been sustained; and (4) no legal or
governmental proceeding, domestic or foreign, materially affecting the
Trust or the Company, 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 financial condition of the Company and the results of its 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) Deloitte & Touche LLP, 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 Trust or the Company is a party or of which
any property of either 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, or
might materially adversely affect the properties or assets of the Trust or
the Company; 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
5
<PAGE>
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 (i) is 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) has received all permits, licenses or other approvals required
of them under applicable Environmental Laws to conduct their respective
businesses and (iii) is 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.
(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, 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.
3. Sale, Purchase, and Delivery of Securities; Substitution of
-----------------------------------------------------------
Underwriters. On the basis of the representations, 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
6
<PAGE>
immediately available funds to the Representative, for the accounts of the
several Underwriters, an amount per Security set forth in Schedule I hereto 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 severally
(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 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
7
<PAGE>
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 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).
8
<PAGE>
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 Thelen 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 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 issuance 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 supplementation 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
9
<PAGE>
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 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 In vestment 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
10
<PAGE>
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) 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
11
<PAGE>
occurred the effective 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 [ ], 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.
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 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 additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to
the reasonable satisfaction of Thelen Reid & Priest LLP, counsel for the
several Underwriters; no amendment to the Registration Statement or
Prospectus shall have been filed hereafter to which the Representative or
Thelen Reid & Priest LLP, counsel
12
<PAGE>
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 New Jersey Board of Public Utilities 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 order 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, such order shall not
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; and 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, 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,
all or any of which, in the 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 Thelen Reid & Priest LLP,
counsel for the Underwriters, 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 Thelen Reid & Priest LLP, and the
Trust and the Company shall have furnished to Thelen 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 opinions of (a) Peter F. Clark, General Counsel of the Company,
(b) Simpson, Thacher
13
<PAGE>
& Bartlett, Counsel for the Company, and (c) Richards, Layton & Finger,
P.A., Special Delaware Counsel for the Company and the Trust, each dated as
of such date, in substantially the forms attached hereto as Exhibits A, B
and C hereto.
(e) On the Closing Date, the Representative shall have received the
favorable opinion of Thelen Reid & Priest LLP, counsel for the several
Underwriters, dated as of such date, satisfactory in form, scope and
substance to the 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, Thelen 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(d) hereto, and as to matters governed by New
Jersey law upon the opinion of [ ].
(f) On the Closing Date, the Representative shall have received the
letter of PricewaterhouseCoopers 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.
(g) On the Closing Date, the Representative shall have received the
letter of Deloitte & Touche LLP, dated as of such date, to the effect set
forth in Schedule IV 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
14
<PAGE>
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 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 Thelen 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 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
15
<PAGE>
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 investigation 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
Prospectus, 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
16
<PAGE>
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 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
17
<PAGE>
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 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.
18
<PAGE>
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 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 New York, 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 New York, without
regard to choice of laws principles.
19
<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,
ATLANTIC CAPITAL II
By
-----------------------------------
Title: Administrative Trustee
ATLANTIC CITY ELECTRIC COMPANY
By
-----------------------------------
Title: Senior Vice President, Treasurer
and Chief Financial Officer
ACCEPTED as of the date first
above written, as Underwriters
and as Representatives of the
other Underwriters named in
Schedule II.
MORGAN STANLEY & CO. INCORPORATED
WHEAT FIRST UNION
LEGG MASON WOOD WALKER, INC.
By: MORGAN STANLEY & CO.
INCORPORATED
By:
-----------------------------
Title: Principal
20
<PAGE>
SCHEDULE I
----------
Underwriting Agreement dated October , 1998
Registration Statement No. 333-________ and 333-________
Representatives and Address:
MORGAN STANLEY & CO. INCORPORATED
WHEAT FIRST UNION
LEGG MASON WOOD WALKER, INC.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Securities:
Designation: Cumulative Trust Preferred Capital Securities
(Liquidation Amount $25.00 per Preferred Security)
Amount of Securities: $____________
Amount of Common Securities: $____________
Purchase Price per Preferred Security: $__________
Public Offering Price per Preferred Security: $__________
Underwriters' Compensation per
Preferred Security: $_______ ($______ per Preferred Security
sold to certain institutions)
Closing Date, Time and Location:
October , 1998
9:00 a.m.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
21
<PAGE>
SCHEDULE II
-----------
Underwriter Number of Securities
----------- --------------------
MORGAN STANLEY & CO. INCORPORATED ....................
WHEAT FIRST UNION ....................................
LEGG MASON WOOD WALKER, INC. .........................
---------------
Total .............................................
===============
22
<PAGE>
SCHEDULE III
------------
(i) They are independent public accountants with the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) 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 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
(iii) 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
<PAGE>
-2-
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>
SCHEDULE IV
-----------
(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 financial statements of the Company
("Company") 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) They have compared the dollar amounts (or percentages derived
from such dollar amounts), ratios and other financial information as agreed upon
contained in the Company's latest Annual Report on Form 10-K 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 4-A
TRUST AGREEMENT OF ATLANTIC CAPITAL II
This TRUST AGREEMENT of Atlantic Capital II (the "Trust"), dated as of
September 10, 1998, among (i) Atlantic City Electric Company, a New Jersey
corporation (the "Depositor"), (ii) The Bank of New York (Delaware), a Delaware
banking corporation, not in its individual capacity but solely as trustee of the
Trust, (iii) Louis M. Walters, an individual employed by the Depositor, not in
his individual capacity but solely as administrative trustee of the Trust and
(iv) The Bank of New York, a New York banking corporation, not in its individual
capacity but solely as 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 "Atlantic Capital II", 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 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
<PAGE>
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 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 The Bank of New York (Delaware) in its capacity as a
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 Louis
M. Walters, as administrative trustee, solely in his capacity as a Trustee of
the Trust, hereby constitutes and appoints Louis M. Walters and Stephanie M.
Scola, each of them, as its or his 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 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).
-2-
<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.
ATLANTIC CITY ELECTRIC COMPANY,
----------------------------
as Depositor Louis M. Walters, not in his
individual capacity but solely
as Administrative Trustee
By:
-----------------------------------
Name:
Title:
THE BANK OF NEW YORK (DELAWARE)
not in its individual
capacity but solely as Trustee
By:
-----------------------------------
Name:
Title:
THE BANK OF NEW YORK
not in its individual
capacity but solely as Trustee
By:
----------------------------------
Name:
Title:
-3-
<PAGE>
Exhibit 4-B
================================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
among
ATLANTIC CITY ELECTRIC COMPANY, as Depositor
and
THE BANK OF NEW YORK,
as Property Trustee,
and THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
Louis M. Walters
and
Stephanie M. Scola, as Trustees
and the several Holders
Dated as of October 1, 1998
ATLANTIC CAPITAL II
================================================================================
<PAGE>
Atlantic Capital II
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
- --------------- -----------------
Section 310(a)(1) ....................................... 8.07
(a)(2) ....................................... 8.07
(a)(3) ....................................... 8.09
(a)(4) ....................................... Not Applicable
(b) ....................................... 8.08
Section 311(a) ....................................... 8.13
(b) ....................................... 8.13
Section 312(a) ....................................... 5.07
(b) ....................................... 5.07
(c) ....................................... 5.07
Section 313(a) ....................................... 8.14(a)
(a)(4) ....................................... 8.14(b)
(b) ....................................... 8.14(b)
(c) ....................................... 8.14(a)
(d) ....................................... 8.14(a), 8.14(b)
Section 314(a) ....................................... 8.15
(a)(4) ....................................... Not Applicable
(c) ....................................... 8.16
(d) ....................................... Not Applicable
(e) ....................................... 1.01
Section 315(a) ....................................... 8.01
(b) ....................................... 8.02
(c) ....................................... 8.01(a)
(d) ....................................... 8.01, 8.03
(e) ....................................... Not Applicable
Section 316(a) ....................................... Not Applicable
(a)(1)(A) ....................................... Not Applicable
(a)(1)(B) ....................................... Not Applicable
(a)(2) ....................................... Not Applicable
(b) ....................................... Not Applicable
(c) ....................................... Not Applicable
Section 317(a)(1) ....................................... Not Applicable
(a)(2) ....................................... Not Applicable
(b) ....................................... 5.09
Section 318(a) ....................................... 10.09
- -----------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Trust Agreement.
<PAGE>
TABLE OF CONTENTS
-----------------
ARTICLE I.
Defined Terms
Section 1.01. Definitions................................................... 1
ARTICLE II.
Establishment of the Trust; Issuance of
Trust Securities; Rights of Securityholders
Section 2.01. Name.......................................................... 10
Section 2.02. Office of the Delaware Trustee; Principal Place of Business .. 10
Section 2.03. Initial Contribution of Trust Property; Initial Ownership;
Organizational Expenses ............................................. 10
Section 2.04. Issuance of the Preferred Securities ......................... 10
Section 2.05. Subscription and Purchase of Debentures; Issuance of the
Common Securities ................................................... 10
Section 2.06. Declaration of Trust; Appointment of Additional
Administrative Trustees ............................................. 11
Section 2.07. Authorization to Enter into Certain Transactions ............. 11
Section 2.08. Assets of Trust .............................................. 14
Section 2.09. Title to Trust Property ...................................... 14
Section 2.10. Rights of Securityholders .................................... 15
ARTICLE III.
Payment Account
Section 3.01. Payment Account .............................................. 15
ARTICLE IV.
Distributions; Redemption
Section 4.01. Distributions ................................................ 15
Section 4.02. Redemption ................................................... 16
Section 4.03. Subordination of Common Securities ........................... 18
Section 4.04. Payment Procedures ........................................... 18
Section 4.05. Tax Returns and Reports ...................................... 18
Section 4.06. Payments under Subordinated Indenture ........................ 18
ARTICLE V.
Trust Securities Certificates
Section 5.01. The Trust Securities Certificates ............................ 19
Section 5.02. Ownership of Common Securities by Depositor .................. 19
Section 5.03. Registration of Transfer and Exchange of Preferred
Securities Certificates ............................................. 19
i
<PAGE>
Page
----
Section 5.04. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates ........................................................ 20
Section 5.05. Cancellation by Registrar. ................................... 21
Section 5.06. Persons Deemed Securityholders ............................... 21
Section 5.07. Lists of Holders. ............................................ 21
Section 5.08. Maintenance of Office or Agency .............................. 21
Section 5.09. Appointment of Paying Agent .................................. 21
Section 5.10. Book-Entry System ............................................ 22
ARTICLE VI.
Acts of Securityholders; Meetings; Voting
Section 6.01. Limitations on Voting Rights ................................. 23
Section 6.02. Notice of Meetings ........................................... 23
Section 6.03. Meetings of Holders of Preferred Securities .................. 24
Section 6.04. Voting Rights ................................................ 24
Section 6.05. Proxies, etc. ................................................ 24
Section 6.06. Securityholder Action by Written Consent ..................... 24
Section 6.07. Record Date for Voting ....................................... 24
Section 6.08. Acts of Securityholders ...................................... 25
Section 6.09. Inspection of Records ........................................ 26
ARTICLE VII.
Representations and Warranties
of the Property Trustee and the Delaware Trustee
Section 7.01. Property Trustee ............................................. 26
Section 7.02. Delaware Trustee ............................................. 26
ARTICLE VIII.
The Trustees
Section 8.01. Certain Duties and Responsibilities .......................... 27
Section 8.02. Certain Notices .............................................. 29
Section 8.03. Certain Rights of Property Trustee ........................... 29
Section 8.04. Not Responsible for Recitals or Issuance of Securities ....... 32
Section 8.05. May Hold Securities .......................................... 32
Section 8.06. Compensation; Fees; Indemnity. ............................... 32
Section 8.07. Certain Trustees Required; Eligibility ....................... 33
Section 8.08. Conflicting Interests. ....................................... 33
Section 8.09. Co-Trustees and Separate Trustee ............................. 34
Section 8.10. Resignation and Removal; Appointment of Successor ............ 35
Section 8.11. Acceptance of Appointment by Successor ....................... 36
Section 8.12. Merger, Conversion, Consolidation or Succession to Business .. 37
Section 8.13. Preferential Collection of Claims Against Depositor or Trust . 37
Section 8.14. Reports by Property Trustee .................................. 37
ii
<PAGE>
Page
----
Section 8.15. Reports to the Property Trustee .............................. 38
Section 8.16. Evidence of Compliance With Conditions Precedent ............. 38
Section 8.17. Number of Trustees. .......................................... 38
Section 8.18. Delegation of Power. ......................................... 38
Section 8.19. Fiduciary Duty ............................................... 38
ARTICLE IX.
Termination and Liquidation
Section 9.01. Termination Upon Expiration Date ............................. 40
Section 9.02. Early Termination ............................................ 40
Section 9.03. Termination .................................................. 40
Section 9.04. Liquidation .................................................. 40
Section 9.05. Mergers, Consolidations, Amalgamations or Replacements of
the Trust ........................................................... 42
ARTICLE X.
Miscellaneous Provisions
Section 10.01. Limitation of Rights of Securityholders ..................... 43
Section 10.02. Amendment ................................................... 43
Section 10.03. Separability ................................................ 44
Section 10.04. Governing Law ............................................... 45
Section 10.05. Successors .................................................. 45
Section 10.06. Headings .................................................... 45
Section 10.07. Notice and Demand ........................................... 45
Section 10.08. Agreement Not to Petition ................................... 45
Section 10.09. Conflict with Trust Indenture Act ........................... 46
iii
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of October 1, 1998, among
(i) Atlantic City Electric Company, a New Jersey corporation (the "Depositor"),
(ii) The Bank of New York, a New York banking corporation duly organized and
existing under the laws of New York, as trustee (the "Property Trustee"), (iii)
The Bank of New York (Delaware), a Delaware banking corporation duly organized
and existing under the laws of Delaware, as Delaware trustee (the "Delaware
Trustee"), and (iv) Louis M. Walters and Stephanie M. Scola, each an individual,
as trustee, and each of whose address is c/o Atlantic City Electric Company, 800
King Street, Wilmington, Delaware 19899 (each, an "Administrative Trustee" and,
collectively, the "Administrative Trustees") (the Property Trustee, the Delaware
Trustee and the Administrative Trustees being hereinafter referred to
collectively as the "Trustees") and the several Holders, as hereinafter defined.
W I T N E S W E T H:
- - - - - - - - - -
WHEREAS, the Depositor, the Delaware Trustee, the Property Trustee and
Louis M. Walters, 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 September 10, 1998
(the "Original Trust Agreement"), and by the execution by the Delaware Trustee,
the Property Trustee and Louis M. Walters, as Administrative Trustee and filing
with the Secretary of State of the State of Delaware of the Certificate of
Trust, dated , 1998 (the "Certificate of Trust"), a copy of which is
attached as Exhibit A; and
WHEREAS, the Depositor, the Delaware Trustee and Louis M. Walters, as
Administrative Trustee, desire to amend and restate the Original Trust Agreement
in its entirety as set forth herein to provide for, among other things, (i) the
acquisition by the Trust from the Depositor of all of the right, title and
interest in the Debentures, (ii) the issuance of the Common Securities by the
Trust to the Depositor, (iii) the issuance of the Preferred Securities by the
Trust and (iv) the appointment of additional Administrative Trustees of the
Trust;
NOW THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, each party, for the benefit of the other parties and for
the benefit of the Securityholders, hereby amends and restates the Original
Trust Agreement in its entirety and agrees as follows:
ARTICLE I.
Defined Terms
Section 1.01. Definitions. For all purposes of this Trust Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
<PAGE>
(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.
"Administrative Trustee" means each of the individuals identified as
an "Administrative Trustee" in the preamble to this Trust Agreement, solely in
their capacities as Administrative Trustees of the Trust created hereunder and
not in their individual capacities, or any successor trustee appointed as herein
provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bankruptcy Event" means, with respect to any Person:
(i) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization,
arrangement, adjudication or composition of or in respect of such Person
under Federal bankruptcy law or any other applicable Federal or State law,
or appointing a receiver, 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
-2-
<PAGE>
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 10.08.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors or a duly authorized committee thereof and
to be in full force and effect on the date of such certification, and delivered
to the appropriate Trustee.
"Business Day" means a day other than (a) a Saturday or a Sunday, (b)
a day on which banks in New York, New York are authorized or obligated by law or
executive order to remain closed and (c) a day on which either the Corporate
Trust Office or the Debenture Trustee's principal corporate trust office is
closed for business.
"Certificate of Trust" has the meaning specified in the preamble to
this Trust Agreement.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Closing Date" means the date of delivery of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Security" means an undivided beneficial ownership 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 New York, New York, which at the date hereof is
101 Barclay Street - 21 West, New York, New York 10286.
"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.
-3-
<PAGE>
"Debenture Event of Default" means an "Event of Default" as defined in
the Subordinated Indenture.
"Debenture Issuer" means Atlantic City Electric Company, a New Jersey
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 $30,927,850 aggregate principal amount of the
Debenture Issuer's % Junior Subordinated Debentures, Series I, Due ,
issued pursuant to the Subordinated Indenture.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
-- ---
to time.
"Delaware Trustee" means the banking corporation identified as the
"Delaware Trustee" in the preamble to this Trust Agreement solely in its
capacity as Delaware Trustee of the Trust and not in its individual capacity, or
its successor in interest in such capacity, or any successor trustee appointed
as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.01(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
"Early Termination Event" has the meaning specified in Section 9.02.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of a Debenture Event of Default; or
(ii) default by the Trust or the Property Trustee 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 or the Property Trustee in the
payment of any Redemption Price when it becomes due and payable; or
-4-
<PAGE>
(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 25% 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 or the Property Trustee if a successor Property Trustee has not been
appointed within 90 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expiration Date" means December 31, 2043.
"Guarantee" means the Guarantee Agreement executed and delivered by
the Depositor and The Bank of New York, a New York banking corporation, as
trustee, contemporaneously with the execution and delivery of this Trust
Agreement, for the benefit of the Holders of the Preferred Securities, as
amended from time to time.
"Holder" has the meaning specified in the definition of
"Securityholder."
"Indemnified Person" means any Trustee, any Affiliate of any
Trustee, any officer, director, shareholder, member, partner, employee,
representative or agent of any Trustee, or any employee or agent of the Trust or
its Affiliates.
"Investment Company Act" means the Investment Company Act of 1940,
as amended.
"Investment Company Event" means the occurrence of a change in law
or regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority to
the effect that the Trust is or will be considered an "investment company" that
is required to be registered under the Investment Company Act, which change in
law becomes effective on or after the date of original issuance of the Preferred
Securities.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed
of trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.
"Like Amount" means, as the context requires, (i) Trust
Securities having a Liquidation Amount equal to the principal amount of
Debentures at any time to be repaid, whether at stated maturity or upon maturity
by earlier acceleration, redemption or otherwise and (ii) Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities with
respect to which such Debentures are to be distributed.
-5-
<PAGE>
"Liquidation Amount" means the stated amount of $25 per Trust
Security.
"Liquidation Date" means the date on which Debentures are to be
distributed to Securityholders in connection with a termination and liquidation
of the Trust pursuant to Section 9.04(a).
"Liquidation Distribution" has the meaning specified in Section
9.04(e).
"No Recognition Opinion" means an opinion of nationally recognized
independent tax counsel experienced in such matters, which opinion may rely on
any then applicable published revenue rulings of the Internal Revenue Service,
to the effect that the Holders of the Preferred Securities will not recognize
any gain or loss for United States federal income tax purposes as a result of
the termination of the Trust and distribution of the Debentures.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board, the President, a Vice President, the Treasurer or an Assistant
Treasurer of the Depositor, and delivered to the appropriate Trustee. Any
Officer's Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that the officer signing the Officer's Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the Officer's
Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, but not an
employee of the Trust, the Property Trustee or the Depositor, and who shall be
reasonably acceptable to the Property Trustee. Any Opinion of Counsel delivered
with respect to compliance with a condition or covenant provided for in this
Trust Agreement shall include statements comparable to the statements referred
to in the definition of "Officers' Certificate" herein.
"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:
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(i) Preferred Securities theretofore canceled by the
Administrative Trustees or delivered to the Administrative Trustees for
cancellation;
(ii) Preferred Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Property
Trustee or any Paying Agent for the Holders of such Preferred Securities;
provided, however, that, if such Preferred Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this Trust
Agreement; and
(iii) Preferred Securities in exchange for or in lieu of which
other Preferred Securities have been delivered pursuant to this Trust
Agreement, including pursuant to Sections 5.03 or 5.04;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities which such Trustee knows to be so owned shall
be so disregarded and (b) the foregoing shall not apply at any time when all of
the outstanding Preferred Securities are owned by the Depositor, one or more of
the Trustees and/or any such Affiliate. Preferred Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustees the pledgee's
right so to act with respect to such Preferred Securities and that the pledgee
is not the Depositor or any Affiliate of the Depositor.
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.09 and initially shall be The Bank of New York.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee at The Bank of New York, or
such other banking institution as the Depositor shall select, for the benefit of
the Securityholders in which all amounts paid in respect of the Debentures will
be held and from which the Paying Agent, pursuant to Section 5.09, shall make
payments to the Securityholders in accordance with Sections 4.01 and 4.02.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial ownership
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.
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"Preferred Securities Certificate" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as Exhibit
C.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor trustee appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided, however, that each Debenture Redemption Date and Maturity
(as defined in the Subordinated Indenture) of the Debentures shall be a
Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Redemption Date of
any Trust Security, the Liquidation Amount of such Trust Security, plus
accumulated and unpaid Distributions thereon to the Redemption Date.
"Registrar" shall mean the registrar for the Preferred Securities
appointed by the Trust and shall be initially The Bank of New York.
"Responsible Officer," when used with respect to the Property
Trustee means an officer of the Property Trustee assigned by the Property
Trustee to administer its corporate trust matters.
"Securities Depository" shall be The Depository Trust Company, or a
successor thereto.
"Securities Register" shall mean the Securities Register described
in Section 5.03.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Business Trust Act.
"Special Event" means either a Tax Event or an Investment Company
Event.
"Subordinated Indenture" means the Indenture, dated as of October
1, 1998, between the Depositor and the Debenture Trustee, as amended or
supplemented from time to time.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein or as a result of any administrative
pronouncement or action or judicial decision interpreting or
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applying such laws or regulations, which amendment or change is effective or
which pronouncement, action or decision is announced on or after the date of
issuance of the Preferred Securities under this Trust Agreement, there is more
than an insubstantial risk that at such time or within 90 days of the date
thereof (i) the Trust is, or will be, subject to United States federal income
tax with respect to income received or accrued on the Debentures, (ii) interest
payable by the Depositor on the Debentures is not, or will not be, fully
deductible by the Depositor for United States federal income tax purposes, or
(iii) the Trust is, or will be, subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
"Transfer Agent" shall mean one or more transfer agents for the
Preferred Securities appointed by the Administrative Trustees on behalf of the
Trust and shall be initially The Bank of New York.
"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, 1998, among the Trust, the Depositor and the underwriters named therein.
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ARTICLE II.
Establishment of the Trust; Issuance of
Trust Securities; Rights of Securityholders
Section 2.01. Name. The Trust created hereby shall be known as
"Atlantic Capital II" 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 Delaware Trustee; Principal Place of
Business. The office of the Delaware Trustee in the State of Delaware is c/o
The Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware
19711, or at such other address in Delaware as the Delaware Trustee may
designate by written notice to the Securityholders and the Depositor. The
principal place of business of the Trust is c/o Atlantic City Electric Company,
800 King Street, Wilmington, Delaware 19899.
Section 2.03. Initial Contribution of Trust Property; Initial
Ownership; Organizational Expenses. The Property Trustee acknowledges receipt
in trust from the Depositor in connection with the Original Trust Agreement of
the sum of $10, which constituted the initial Trust Property. Upon the creation
of the Trust by such contribution and until the issuance of the Trust
Securities, and at any time during which no Trust Securities are outstanding,
the Depositor shall be the sole beneficial owner of the Trust. Pursuant to the
Subordinated Indenture, the Debenture Issuer, as borrower, shall pay
organizational expenses of the Trust as they arise or shall, upon request of any
Trustee, promptly reimburse such Trustee for any such expenses paid by such
Trustee. The Depositor shall make no claim upon the Trust Property for the
payment of such expenses.
Section 2.04. Issuance of the Preferred Securities. The Depositor
and an Administrative Trustee, on behalf of the Trust, executed and delivered
the Underwriting Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, one of the Administrative Trustees, on behalf of the Trust
in accordance with Section 5.01, executed manually and delivered a Preferred
Securities Certificate, registered in the name of the nominee of the Securities
Depository, evidencing 1,200,000 Preferred Securities having an aggregate
Liquidation Amount of $30,000,000, against receipt of the purchase price of such
Preferred Securities of $30,000,000, 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, one of the Administrative Trustees, on behalf of the
Trust, shall execute and deliver to the Depositor a Common Securities
Certificate, registered in the name of the Depositor, evidencing 37,114 Common
Securities having an aggregate Liquidation Amount of $927,850, against receipt
of the purchase price of such Common Securities of $927,850. 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, in an
aggregate principal amount of $30,927,850, and, in satisfaction of the purchase
price for such
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Debentures, the Property Trustee, on behalf of the Trust, shall deliver to the
Depositor the sum of $30,927,850, representing the proceeds from the sale of the
Trust Securities.
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 or incidental thereto. The Depositor hereby appoints the
Trustees as trustees of the Trust, to have all the rights, powers and duties to
the extent set forth herein. The Property Trustee hereby declares that it will
hold the Trust Property in trust upon and subject to the conditions set forth
herein for the benefit of the Securityholders. The Trustees shall have all
rights, powers and duties set forth herein and in accordance with applicable law
with respect to accomplishing the purposes of the Trust.
Section 2.07. Authorization to Enter into Certain Transactions. (a)
The Trustees shall conduct the affairs of the Trust in accordance with the terms
of this Trust Agreement. Subject to the limitations set forth in paragraph (b)
of this Section 2.07 and Article VIII and in accordance with the following
provisions (i) and (ii), the Trustees shall have the authority to enter into all
transactions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, the Administrative Trustees,
acting singly or jointly, shall have the power, duty and authority to act
on behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) without the consent of any Person, the causing of the
Trust to enter into and to execute, deliver and perform on behalf of
the Trust such agreements or other documents as may be necessary or
desirable in connection with the consummation of the Underwriting
Agreement;
(C) the collection of interest, principal and any other
payments made in respect of the Debentures in the Payment Account;
(D) 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;
(E) 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
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preparation and filing of all periodic and other reports and other
documents pursuant to the foregoing;
(F) the appointment of a Paying Agent, a Transfer Agent
and a Registrar in accordance with this Trust Agreement;
(G) the registration of transfers of the Trust Securities
in accordance with this Trust Agreement; and
(H) the taking of any action incidental to the foregoing
as the Administrative Trustees may from time to time determine is
necessary or advisable to protect and conserve the Trust Property for
the benefit of the Securityholders (without consideration of the
effect of any such action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect to the
following ministerial matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the deposit of interest, principal and any other
payments made in respect of the Debentures in the Payment Account;
(D) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities in accordance with
the terms of this Trust Agreement;
(E) the sending of notices of default and other
information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with the terms of this Trust Agreement;
(F) the distribution of the Trust Property in accordance
with the terms of this Trust Agreement;
(G) to the extent 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).
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Subject to this Section 2.07(a)(ii), the Property Trustee shall have none of the
duties, liabilities, powers or authority of the Administrative Trustees set
forth in Section 2.07(a)(i) or the Depositor set forth in Section 2.07(c). The
Property Trustee shall have the power and authority to exercise all of the
rights, powers and privileges of a holder of Debentures under the Subordinated
Indenture and, if an Event of Default occurs and is continuing, the Property
Trustee may, for the benefit of Holders of the Trust Securities, in its
discretion proceed to protect and enforce its rights as holder of the Debentures
subject to the rights of the Holders pursuant to the terms of this Trust
Agreement.
(b) The Trust (or the Trustees acting on behalf of the Trust) shall
not undertake any business, activities or transaction except as expressly
provided herein or contemplated hereby. In particular, the Trustees shall not
(i) acquire any investments or engage in any activities not authorized by this
Trust Agreement, (ii) sell, assign, transfer, exchange, pledge, set-off or
otherwise dispose of any of the Trust Property or interests therein, including
to Securityholders, except as expressly provided herein, (iii) take any action
that would cause the Trust to fail or cease to qualify as a "grantor trust" for
United States federal income tax purposes, (iv) incur any indebtedness for
borrowed money or (v) take or consent to any action that would result in the
placement of a Lien on any of the Trust Property. The Trustees shall defend all
claims and demands of all Persons at any time claiming any Lien on any of the
Trust Property adverse to the interest of the Trust or the Securityholders in
their capacity as Securityholders.
(c) In connection with the issuance of the Preferred Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) to prepare for filing by the Trust with the Commission and
to execute a registration statement on Form S-3 in relation to the
Preferred Securities, including any amendments thereto;
(ii) to determine the states in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which must
be taken by or on behalf of the Trust, and advise the Trustees of actions
they must take on behalf of the Trust, and prepare for execution and filing
any documents to be executed and filed by the Trust or on behalf of the
Trust, as the Depositor deems necessary or advisable in order to comply
with the applicable laws of any such states;
(iii) to prepare for filing by the Trust an application to the
New York Stock Exchange, any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities and to file or cause the Administrative Trustees to file
thereafter with such exchange such notifications and documents as may be
necessary from time to time to maintain such listing;
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(iv) to prepare for filing by the Trust with the Commission and
to execute a registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12(b) of the
Exchange Act, including any amendments thereto;
(v) to execute and deliver on behalf of the Trust the
Underwriting Agreement and such other agreements as may be necessary or
desirable in connection with the consummation thereof;
(vi) to select the investment banker or bankers to act as
underwriters with respect to the offer and sale by the Trust of Preferred
Securities and negotiate the terms of an Underwriting Agreement and pricing
agreement providing for such offer; and
(vii) to take any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust will not be deemed to be an
"investment company" required to be registered under the Investment Company Act
of 1940, as amended, or classified other than as a "grantor trust" for United
States federal income tax purposes and so that the Debentures will be treated as
indebtedness of the Depositor for United States federal income tax purposes. In
this connection, subject to the provisions of Section 10.03, the Depositor and
the Administrative Trustees are authorized to take any action, not inconsistent
with applicable law or this Trust Agreement, that each of the Depositor and the
Administrative Trustees determines in its discretion to be necessary or
desirable for such purposes, as long as such action does not materially and
adversely affect the interests of the Holders of the Preferred Securities.
(e) Anything in this Trust Agreement to the contrary
notwithstanding, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties, liabilities or
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 that the Trust have at least one trustee that
has its principal place of business in the State of Delaware. The duties of the
Delaware Trustee shall be limited to (a) accepting legal process served on the
Trust in the State of Delaware and (b) the execution of any certificates
required to be filed with the Delaware Secretary of State which the Delaware
Trustee is required to execute under Section 3811 of the Delaware Business Trust
Act.
Section 2.08. Assets of Trust. The assets of the Trust shall consist
of the Trust Property.
Section 2.09. Title to Trust Property. Legal title to all Trust
Property shall be vested at all times in the Property Trustee (in its capacity
as such) and shall be held and
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administered by the Property Trustee for the benefit of the Securityholders in
accordance with this Trust Agreement.
Section 2.10. Rights of Securityholders. The legal title to the
Trust Property is vested exclusively in the Property Trustee (in its capacity as
such) in accordance with Section 2.09, and the Securityholders shall not have
any right or title therein other than an undivided beneficial ownership 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. By acceptance of a beneficial interest in the Trust
Securities, Securityholders agree to treat the Debentures as indebtedness for
all United States tax purposes. The Preferred Securities shall have no
preemptive or similar rights and when issued and delivered to Securityholders
against payment of the purchase price therefor will be fully paid and
nonassessable interests in the Trust.
ARTICLE III.
Payment Account
Section 3.01. Payment Account. (a) On or prior to the Closing Date,
the Property Trustee shall establish the Payment Account. The Property Trustee
and the Paying Agent appointed by the Administrative Trustees shall have
exclusive control with respect to the Payment Account for the purpose of making
deposits in and withdrawals from the Payment Account in accordance with this
Trust Agreement. All monies and other property deposited or held from time to
time in the Payment Account shall be held by the Property Trustee in the Payment
Account for the exclusive benefit of the Holders of Trust Securities and for
distribution as herein provided.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV.
Distributions; Redemption
Section 4.01. Distributions. (a) Distributions on the Trust
Securities shall be cumulative, and will accumulate whether or not there are
funds of the Trust available for the payment of Distributions. Distributions
shall accumulate from the Closing Date, and, except in the event that the
Depositor exercises its right to extend the interest payment period for the
Debentures pursuant to Section 311 of the Subordinated Indenture, shall be
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, commencing on December 31, 1998. If any date on which
Distributions are otherwise payable on the
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Trust Securities is not a Business Day, then the payment of such Distribution
shall be made on the next succeeding day that is a Business Day except that, if
such Business Day is in the next succeeding calendar year, payment of such
distribution shall be made on the immediately preceding Business Day, in each
case, with the same force and effect as if made on such date (each date on which
distributions are payable in accordance with this Section 4.01(a) a
"Distribution Date").
(b) Distributions payable on the Trust Securities shall be fixed at a
rate of % per annum of the Liquidation Amount of the Trust Securities. The
amount of Distributions payable on December 31, 1998 will be computed on the
basis of days in a 360-day year. 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
additional Distributions on the Trust Securities shall accumulate by 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.
(c) Distributions on the Trust Securities shall be made and shall be
deemed payable on each Distribution Date only to the extent that the Trust has
funds immediately available in the Payment Account for the payment of such
Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record date, which
shall be 15 days prior to such Distribution Date.
Section 4.02. Redemption. (a) On each Debenture Redemption Date and
at Maturity for the Debentures, the Property Trustee will be required to redeem
a Like Amount of Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to
be redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed;
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(v) that on the Redemption Date the Redemption Price will
become due and payable upon each such Trust Security to be redeemed and
that Distributions thereon will cease to accrue on and after said date;
(vi) the place or places where such Trust Securities are to be
surrendered for payment of the Redemption Price; and
(vii) such other matters as the Property Trustee shall deem
desirable or appropriate.
(c) The Trust Securities redeemed on each Redemption Date shall
be redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be deemed payable on each Redemption Date only if the
Trust has funds immediately available in the Payment Account for such payment.
(d) If the Property Trustee gives a notice of redemption in
respect of any Preferred Securities, then, by 12:00 noon, New York time, on the
Redemption Date, subject to Section 4.02(c), the Property Trustee shall
irrevocably deposit with the Paying Agent funds sufficient to pay the applicable
Redemption Price and will give the Paying Agent irrevocable instructions to pay
the Redemption Price to the Holders thereof upon surrender of their Trust
Securities Certificates. Notwithstanding the foregoing, Distributions payable on
or prior to the Redemption Date for any Trust Securities called for redemption
shall be payable to the Holders of such Trust Securities as they appear on the
Securities Register for the Trust Securities on the relevant record dates for
the related Distribution Dates. If notice of redemption shall have been given
and funds deposited as required, then on the Redemption Date all rights of
Securityholders holding Trust Securities so called for redemption will cease,
except the right of such Securityholders to receive the Redemption Price, and
such Trust Securities will cease to be outstanding. In the event that any
Redemption Date is not a Business Day, then payment of the Redemption Price
payable on such date shall be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay). In
the event that payment of the Redemption Price in respect of any Trust
Securities called for redemption is not paid either by the Trust or by the
Depositor pursuant to the Guarantee, Distributions on such Trust Securities will
continue to accrue, at the then applicable rate, from the Redemption Date
originally established to the date on which such Redemption Price shall actually
be paid.
(e) 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 pro rata to the Common Securities
and the Preferred Securities. The particular Preferred Securities to be
redeemed shall be selected pro rata not more than 60 days prior to the
Redemption Date by the Property Trustee from the Outstanding Preferred
Securities not previously called for redemption which may provide for the
selection for redemption of portions (equal to $25 or integral multiples
thereof) of the Liquidation Amount of Preferred Securities of a denomination
larger than $25. The Property Trustee shall promptly notify the Transfer Agent
and Registrar in writing of the Preferred Securities selected for redemption
and, in the case of any Preferred Securities selected for partial
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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 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 on all Outstanding Preferred Securities for all
distribution periods terminating on or prior thereto, or in the case of payment
of the Redemption Price, payment in full of such Redemption Price on all
Outstanding Preferred Securities, shall have been made or provided for.
(b) In the case of the occurrence of an Event of Default
resulting from a Debenture Event of Default, the Holder of Common Securities
will be deemed to have waived such Event of Default until the effect of all such
Events of Default with respect to the Preferred Securities shall have been
cured, waived or otherwise eliminated. Until all Events of Default with respect
to the Preferred Securities shall have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of
the Preferred Securities, and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee to act.
Section 4.04. Payment Procedures. Payments in respect of the
Preferred Securities shall be made by check mailed to the address of the Person
entitled thereto as such address shall appear on the Securities Register.
Payments in respect of the Common Securities shall be made in such manner as
shall be mutually agreed between the Administrative Trustees and the Holder of
the Common Securities.
Section 4.05. Tax Returns and Reports. The Administrative
Trustees shall prepare (or cause to be prepared), at the Depositor's expense and
direction, and file all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the Internal Revenue Service Form 1041 (or
any successor form) required to be filed in respect of the Trust in each taxable
year of the Trust and (b) prepare and furnish (or cause to be prepared and
furnished) to each Securityholder the related Internal Revenue Service Form
1099, or any successor form or the information required to be provided on such
form. The Administrative Trustees shall provide the Depositor and the Property
Trustee with a copy of all such returns, reports and schedules promptly after
such filing or furnishing. The Trustees shall comply with United States federal
withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Securityholders under the Trust
Securities.
Section 4.06. Payments under Subordinated Indenture. Any amount
payable hereunder to any Holder of Preferred Securities shall be reduced by the
amount of
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any corresponding payment such Holder has directly received pursuant to Section
808 of the Subordinated Indenture. Notwithstanding the provisions hereunder to
the contrary, Securityholders acknowledge that any Holder of Preferred
Securities that receives payment under Section 808 of the Subordinated Indenture
may receive amounts greater than the amount such Holder may be entitled to
receive pursuant to the other provisions of this Trust Agreement.
ARTICLE V.
Trust Securities Certificates
Section 5.01. The Trust Securities Certificates. The Trust
Securities Certificates shall be issued in denominations of $25 Liquidation
Amount and integral multiples thereof. Subject to Section 2.04 relating to the
original issuance of the Preferred Securities Certificate registered in the name
of the nominee of the Securities Depository, the Trust Securities Certificates
shall be executed on behalf of the Trust by manual or facsimile signature of at
least one Administrative Trustee and, if executed on behalf of the Trust by
facsimile signature, countersigned by a Transfer Agent or its agent. Trust
Securities Certificates bearing the signatures of individuals who were, at the
time when such signatures shall have been affixed, authorized to sign on behalf
of the Trust and, if executed on behalf of the Trust by facsimile signature and
countersigned by a Transfer Agent or its agent, shall be validly issued and
entitled to the benefits of this Trust Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
delivery of such Trust Securities Certificates or did not hold such offices at
the date of delivery of such Trust Securities Certificates. Trust Securities
Certificates may be typewritten, printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Administrative
Trustees, as evidenced by the execution thereof by the Administrative Trustees,
or any one of them.
Section 5.02. Ownership of Common Securities by Depositor. On the
Closing Date, the Depositor shall acquire, and thereafter retain, beneficial and
record ownership of the Common Securities. Any attempted transfer of the Common
Securities (other than a transfer in connection with a merger or consolidation
of the Depositor with or into another corporation pursuant to Section 1101 of
the Subordinated Indenture) shall be void. The Administrative Trustees shall
cause each Common Securities Certificate issued to the Depositor to contain a
legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE." A single Common
Securities Certificate representing the Common Securities shall be issued to the
Depositor in the form of a typewritten or definitive Common Securities
Certificate.
Section 5.03. Registration of Transfer and Exchange of Preferred
Securities Certificates. (a) The Registrar shall keep or cause to be kept, at
its principal corporate office, a Securities Register in which, subject to such
reasonable regulations as it may prescribe, the Registrar shall provide for the
registration of Preferred Securities Certificates and the registration of
transfers and exchanges of Preferred Securities Certificates as herein provided.
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(b) Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
5.08, the Administrative Trustees, or any one of them, shall execute on behalf
of the Trust by manual or facsimile signature and, if executed on behalf of the
Trust by facsimile signature, cause a Transfer Agent or its agent to countersign
and deliver, in the name of the designated transferee or transferees, one or
more new Preferred Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount. At the option of a Holder, Preferred Securities
Certificates may be exchanged for other Preferred Securities Certificates in
authorized denominations of the same class and of a like aggregate Liquidation
Amount upon surrender of the Preferred Securities Certificates to be exchanged
at the office or agency maintained pursuant to Section 5.08.
(c) Every Preferred Securities Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Administrative Trustees and a
Transfer Agent duly executed by the Holder or such Holder's attorney duly
authorized in writing. The Trust shall not be required to (i) issue, register
the transfer of, or exchange any Preferred Securities during a period beginning
at the opening of business 15 calendar days before the day of mailing of a
notice of redemption of any Preferred Securities called for redemption and
ending at the close of business on the day of such mailing or (ii) register the
transfer of or exchange any Preferred Securities so selected for redemption, in
whole or in part, except the unredeemed portion of any such Preferred Securities
being redeemed in part.
(d) No service charge shall be made for any registration of transfer
or exchange of Preferred Securities Certificates, but a Transfer Agent may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
Section 5.04. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. If (i) any mutilated Trust Securities Certificate shall be
surrendered to a Transfer Agent, or if a Transfer Agent shall receive evidence
to its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate and (ii) there shall be delivered to the Transfer Agent and the
Administrative Trustees such security or indemnity as may be required by them to
save each of them and the Depositor harmless, then in the absence of notice that
such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust, shall execute by manual or facsimile signature such Trust Securities
Certificate and, if execution on behalf of the Trust is by facsimile signature,
such Certificate shall be countersigned by a Transfer Agent; and the
Administrative Trustees, or any one of them, shall make available for delivery,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Trust Securities Certificate, a new Trust Securities Certificate of like class,
tenor and denomination. In connection with the issuance of any new Trust
Securities Certificate under this Section 5.04, the Administrative Trustees or
the Transfer Agent may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection therewith. Any
duplicate Trust Securities Certificate issued pursuant to this Section 5.04
shall constitute conclusive evidence of an ownership interest in the Trust, as
if originally issued,
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whether or not the lost, stolen or destroyed Trust Securities Certificate shall
be found at any time.
Section 5.05. Cancellation by Registrar. All Trust Securities
Certificates surrendered for payment, redemption, registration of transfer or
exchange shall, if surrendered to any Person other than the Registrar, be
delivered to the Registrar and, if not theretofore cancelled, shall promptly be
cancelled by the Registrar. No Trust Securities Certificates shall be issued in
lieu of or in exchange for any Trust Securities Certificates cancelled as
provided in this Section, except as expressly permitted by this Trust Agreement.
All cancelled Trust Securities Certificates held by the Registrar shall be
disposed of in accordance with customary practices.
Section 5.06. Persons Deemed Securityholders. Prior to due
presentation of a Preferred Securities Certificate for registration of transfer,
the Trustees and the Registrar shall be entitled to treat the Person in whose
name any Preferred Securities Certificate shall be registered in the Securities
Register as the Holder of such Preferred Securities Certificate for the purpose
of receiving Distributions and for all other purposes whatsoever, and neither
the Trustees nor the Registrar shall be bound by any notice to the contrary.
Section 5.07. Lists of Holders. Semiannually, not later than January
15 and July 15 in each year, commencing January 15, 1999, and at such other
times as the Property Trustee may request in writing, the Administrative
Trustees shall furnish or cause to be furnished to the Property Trustee
information as to the names and addresses of the Holders, and the Property
Trustee shall preserve such information and similar information received by it
in any other capacity and afford to the Holders access to information so
preserved by it, all to such extent, if any, and in such manner as shall be
required by the Trust Indenture Act; provided, however, that no such list need
be furnished so long as the Property Trustee shall be the Registrar.
Section 5.08. Maintenance of Office or Agency. The Administrative
Trustees shall or shall cause the Transfer Agent to maintain, in the Borough of
Manhattan, the City of New York, an office or offices or agency or agencies
where Preferred Securities Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustees or
the Transfer Agent in respect of the Trust Securities Certificates may be
served. The Administrative Trustees shall or shall cause the Transfer Agent to
give prompt written notice to the Property Trustee and to the Securityholders of
any change in any such office or agency.
Section 5.09. Appointment of Paying Agent. The Paying Agent shall
make Distributions to Securityholders from the Payment Account and shall report
the amounts of such Distributions to the Administrative Trustees and the
Property Trustee. Any Paying Agent shall have the revocable power to withdraw
funds from the Payment Account for the purpose of making the Distributions. The
Property Trustee shall be entitled to rely upon a certificate of the Paying
Agent stating in effect the amount of such funds so to be withdrawn and that
same are to be applied by the Paying Agent in accordance with this Section 5.09.
The Administrative Trustees or any one of them may revoke such power and remove
the Paying Agent if the Administrative Trustees or any one of them determines in
its sole
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discretion that the Paying Agent shall have failed to perform its obligations
under this Trust Agreement in any material respect. The Paying Agent may choose
any co-paying agent that is acceptable to the Administrative Trustees and the
Depositor. The Paying Agent shall be permitted to resign upon 30 days' written
notice to the Administrative Trustees and the Depositor. In the event of the
removal or resignation of the Paying Agent, the Administrative Trustees shall
appoint a successor that is reasonably acceptable to the Property Trustee and
the Depositor to act as Paying Agent (which shall be a bank, trust company or an
Affiliate of the Depositor). The Administrative Trustees shall cause such
successor Paying Agent or any additional Paying Agent appointed by the
Administrative Trustees to execute and deliver to the Trustees an instrument in
which such successor Paying Agent or additional Paying Agent shall agree with
the Trustees that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders entitled thereto
until such sums shall be paid to such Securityholders. The Paying Agent shall
return all unclaimed funds to the Property Trustee and upon resignation or
removal of a Paying Agent such Paying Agent also shall return all other funds in
its possession to the Property Trustee. The provisions of Sections 8.01 through
8.06 shall apply to the Paying Agent appointed hereunder, and the Paying Agent
shall be bound by the requirements with respect to paying agents of securities
issued pursuant to the Trust Indenture Act. Any reference in this Trust
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
Section 5.10. Book-Entry System. (a) The Administrative Trustees, at
the direction and expense of the Debenture Issuer, as borrower, may from time to
time appoint a Securities Depository or a successor thereto and enter into a
letter of representations or other agreement with such Securities Depository to
establish procedures with respect to the Preferred Securities. Any Securities
Depository shall be a Clearing Agency.
(b) The Depositor and the Trustees covenant and agree to meet the
requirements of a Securities Depository for the Preferred Securities with
respect to required notices and other provisions of the letter of
representations or agreement executed with respect to such Preferred Securities.
(c) Whenever the beneficial ownership of any Preferred Securities is
determined through the books of a Securities Depository, the requirements in
this Trust Agreement of holding, delivering or transferring, and making payments
in respect of, such Preferred Securities shall be deemed modified with respect
to such Preferred Securities to meet the requirements of the Securities
Depository with respect to actions of the Trustees, the Depositor and the Paying
Agent. Any provisions hereof permitting or requiring delivery of such Preferred
Securities shall, while such Preferred Securities are in a book-entry system, be
satisfied by the notation on the books of the Securities Depository in
accordance with applicable state law.
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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 10.02 and as otherwise required by law, no
Holder of Preferred Securities shall have any right to vote or in any manner
otherwise control the administration, operation and management of the Trust or
the obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association. If the Property Trustee fails to enforce its rights under the
Debentures or this Trust Agreement, a Holder of Preferred Securities may
institute a legal proceeding directly against the Depositor to enforce the
Property Trustee's rights under the Debentures or this Trust Agreement, to the
fullest extent permitted by law, without first instituting any legal proceeding
against the Property Trustee or any other person. Notwithstanding the
foregoing, a Holder of Preferred Securities may directly institute a proceeding
for enforcement of payment to such Holder directly of principal of or interest
on the Debentures having a principal amount equal to the aggregate Liquidation
Amount of the Preferred Securities of such Holder on or after the due dates
specified in the Debentures. In connection with any such proceeding, the
Depositor will be subrogated to the rights of any Holder of Preferred Securities
to the extent of any payment made by the Depositor to such Holder.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Section 813 of
the Subordinated Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the Subordinated
Indenture or the Debentures, where such consent shall be required, without, in
each case, obtaining the prior approval of the Holders of at least 66 2/3% of
the aggregate Liquidation Amount of the Outstanding Preferred Securities;
provided, however, that where a consent under the Subordinated Indenture would
require the consent of each holder of Debentures affected thereby, no such
consent shall be given by any Trustee without the prior written consent of each
holder of Preferred Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Preferred Securities, except
pursuant to a subsequent vote of the Preferred Securities.
Section 6.02. Notice of Meetings. Notice of all meetings of the
Holders of a Preferred Securities, stating the time, place and purpose of the
meeting, shall be given by the Administrative Trustees pursuant to Section 10.07
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.
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Section 6.03. Meetings of Holders of Preferred Securities. (a) No
annual meeting of Securityholders is required to be held. The Administrative
Trustees, however, shall call a meeting of Securityholders to vote on any matter
upon the written request of the Holders of at least 25% of the aggregate
Liquidation Amount of the Outstanding Preferred Securities and may, at any time
in their discretion, call a meeting of Holders of Preferred Securities to vote
on any matters as to which the Holders of Preferred Securities are entitled to
vote.
(b) Holders of at least 50% of the aggregate Liquidation Amount of the
Outstanding Preferred Securities, present in person or by proxy, shall
constitute a quorum at any meeting of Securityholders.
(c) If a quorum is present at a meeting, an affirmative vote by the
Holders of a majority of the aggregate Liquidation Amount of the Outstanding
Preferred Securities shall constitute the action of the Securityholders, unless
this Trust Agreement shall require a greater affirmative vote.
Section 6.04. Voting Rights. Securityholders shall be entitled to
one vote for each $25 of Liquidation Amount represented by their Trust
Securities in respect of any matter as to which such Securityholders are
entitled to vote.
Section 6.05. Proxies, etc. At any meeting of Securityholders, any
Securityholder entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons,
any one of them may vote at any meeting in person or by proxy in respect of such
Trust Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of
a Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger.
Section 6.06. Securityholder Action by Written Consent. Any action
which may be taken by Securityholders at a meeting may be taken without a
meeting if Holders of at least a majority of the aggregate Liquidation Amount of
the Outstanding Trust Securities entitled to vote in respect of such action (or
such larger proportion thereof as shall be required by any express provision of
this Trust Agreement) shall consent to the action in writing.
Section 6.07. Record Date for Voting. For the purposes of
determining the Securityholders who are entitled to notice of and to vote at any
meeting or by written consent, or for the purpose of any other action, the
Administrative Trustees may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Securityholders or other action, as the case
may be, as a record date for the determination of the identity of the
Securityholders of record for such purposes.
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Section 6.08. Acts of Securityholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Trust Agreement to be given, made or taken by Securityholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Securityholders in person or by an agent duly
appointed in writing; and, except as otherwise expressly provided herein, such
action shall become effective when such instrument or instruments are delivered
to the Administrative Trustees. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Securityholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Trust Agreement and (subject to Section
8.01) conclusive in favor of the Trustees, if made in the manner provided in
this Section 6.08.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgements of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee deems sufficient.
(c) The ownership of Preferred Securities shall be proved by the
Securities Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Trust Security shall bind every future
Holder of the same Trust Security and the Holder of every Trust Security issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustees or the Trust in reliance thereon, whether or not notation of such
action is made upon such Trust Security.
(e) Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any particular Trust
Security may do so with regard to all or any part of the Liquidation Amount of
such Trust Security or by one or more duly appointed agents each of which may do
so pursuant to such appointment with regard to all or any part of such
Liquidation Amount.
(f) If any dispute shall arise between or among the Securityholders
and the Administrative Trustees with respect to the authenticity, validity or
binding nature of any request, demand, authorization, direction, consent, waiver
or other Act of such Securityholder or Trustee under this Article VI, then the
determination of such matter by the Property Trustee shall be conclusive with
respect to such matter.
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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 New York;
(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 New York law governing the banking
or trust powers of the Property Trustee.
Section 7.02. Delaware Trustee. The Delaware Trustee hereby
represents and warrants for the benefit of the Depositor and the Securityholders
that:
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(i) the Delaware 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 Delaware 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 Delaware Trustee and constitutes the valid and legally
binding agreement of the Delaware 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 Delaware
Trustee of this Trust Agreement will not violate, conflict with or
constitute a breach of the Delaware Trustee's charter or by-laws; and
(v) neither the authorization, execution or delivery by the
Delaware Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Delaware 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 Delaware Trustee.
ARTICLE VIII.
The Trustees
Section 8.01. Certain Duties and Responsibilities. (a) The
Property Trustee, before the occurrence of any Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties 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. 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:
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(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 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 Trust Agreement.
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of at least a majority of the aggregate
Liquidation Amount of the Outstanding Preferred Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Trust Agreement;
(iv) no provision of this Trust Agreement shall require any of
the Trustees to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Trust Property shall
be to deal with such property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to the
protections, exculpations and limitations on liability afforded to the
Property Trustee under this Trust Agreement, the Trust Indenture Act, the
Delaware Business Trust Act and, to the extent applicable, Rule 3a-7 under
the Investment Company Act of 1940, as amended;
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(vi) the Property Trustee shall have no duty or liability for,
or with respect to the value, genuineness, existence or sufficiency of, the
Trust Property or the payment of any taxes or assessments levied thereon or
in connection therewith;
(vii) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Depositor. Money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Payment Account
established by the Property Trustee pursuant to this Trust Agreement and
except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the Depositor
with their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for the default or misconduct of the
Administrative Trustees or the Depositor.
(C) all payments made by the Property Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from the
income and proceeds from the Trust Property and only to the extent
that there shall be sufficient income or proceeds from the Trust
Property to enable the Property Trustee or Paying Agent to make
payments in accordance with the terms hereof. Each Securityholder, by
its acceptance of a Trust Security, agrees that it will look solely to
the income and proceeds from the Trust Property to the extent
available for distribution to it as herein provided and that the
Trustees are not personally liable to it for any amount distributable
in respect of any Trust Security or for any other liability in respect
of any Trust Security. This Section 8.01(c) does not limit the
liability of the Trustees expressly set forth elsewhere in this Trust
Agreement or, in the case of the Property Trustee, in the Trust
Indenture Act.
(D) Neither the Delaware Trustee nor any 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 actually known to the Property Trustee,
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:
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(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 be
entitled to deliver a notice to the Depositor requesting written
instructions of the Depositor as to the course of action to be taken. The
Property Trustee may, but shall be under no duty to, 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
in which event the Property Trustee shall have no liability except for its
own bad faith, negligence or wilful misconduct; provided, however, that if
the Property Trustee does not receive such instructions of the Depositor
within ten Business Days after it has delivered such notice, or such
reasonably shorter period of time set forth in such notice (which to the
extent practicable shall not be less than two Business Days), it may, but
shall be under no duty to, take or refrain from taking such action not
inconsistent with this Trust Agreement as it shall deem advisable and in
the best interests of the Securityholders, in which event the Property
Trustee shall have no liability except for its own bad faith, negligence or
willful misconduct;
(iii) whenever in the administration of this Trust Agreement
the Property Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, request and rely
upon an Officer's Certificate which, upon receipt of any such requests,
shall be promptly delivered by the Depositor or the Administrative
Trustees;
(iv) the Property Trustee may consult with counsel of its
selection and the advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon;
(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;
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(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, 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;
(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 tax form or 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
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(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 Liquidation Amount of the Trust Securities as would be entitled to
direct the Property Trustee under the terms of this Trust Agreement in
respect of such remedies, rights or actions, (B) may refrain from enforcing
such remedy or right or taking such other action until such instructions
are received, and (C) shall be protected in acting in accordance with such
instructions.
Section 8.04. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Depositor, and the Trustees
do not assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust or any
part thereof or as to the title of the Trust thereto or as to the security
afforded thereby or hereby, or as to the validity or genuineness of any
securities at any time pledged and deposited with any Trustees hereunder, nor as
to the validity or sufficiency of this Trust Agreement or the Trust Securities.
The Trustees shall not be accountable for the use or application by the Trust of
the proceeds of the sale of the Trust Securities in accordance with Section
2.05.
Section 8.05. May Hold Securities. Except as provided in the
definition of the term "Outstanding" in Article I, any Trustee or any agent of
any Trustee or the Trust, in its individual or any other capacity, may become
the owner or pledgee of Trust Securities and may otherwise deal with the Trust
with the same rights it would have if it were not a Trustee or such agent.
Section 8.06. Compensation; Fees; Indemnity. (a) Pursuant to the
Indenture, the Debenture Issuer, as borrower, agrees:
(i) to pay to the Trustees from time to time reasonable
compensation for all services rendered by the Trustees hereunder (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 the Delaware Trustee or any Administrative Trustee), bad faith or
willful misconduct on its part, arising out of or in connection with the
acceptance of the trusts created by, or the administration of, this
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Trust Agreement, including the reasonable costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
(b) As security for the performance of the obligations of the
Depositor Issuer 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) In addition to the rights provided to each Trustee to the
provisions of the immediately preceding paragraph of this Section 8.06, when a
Trustee incurs expenses or renders services in connection with an Event of
Default resulting from a Bankruptcy Event with respect to the Trust, 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.
(d) 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
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in Section 310(b) of the Trust Indenture Act. For purposes of Section 310(b)(1)
of the Trust Indenture Act and to the extent permitted thereby, the Property
Trustee, shall not be deemed to have a conflicting interest arising from its
capacity as indenture trustee under the Junior Subordinated Indenture dated
October 1, 1996 relating to the Depositor's 8.25% Junior Subordinated Deferrable
Interest Debentures, under the Amended and Restated Trust Agreement dated
October 1, 1996, under the Guarantee dated October 1, 1996 and under the
Guarantee.
Section 8.09. Co-Trustees and Separate Trustee. (a) Unless an Event
of Default shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust Property may at the time be located,
the Depositor and the Property Trustee shall have power to appoint, and upon the
written request of the Property Trustee, the Depositor shall for such purpose
join with the Property Trustee in the execution, delivery, and performance of
all instruments and agreements necessary or proper to appoint, one or more
Persons approved by the Property Trustee either to act as co-trustee, jointly
with the Property Trustee, of all or any part of such Trust Property, or to act
as separate trustee of any such property, in either case with such powers as may
be provided in the instrument of appointment, and to vest in such Person or
Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section 8.09.
If the Depositor does not join in such appointment within 15 days after the
receipt by it of a request so to do, or in case a Debenture Event of Default has
occurred and is continuing, the Property Trustee alone shall have power to make
such appointment.
(b) Should any written instrument from the Depositor be required by
any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right, or power, any
and all such instruments shall, on request, be executed, acknowledged, and
delivered by the Depositor.
(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms, namely:
(i) The Trust Securities shall be executed and delivered and
all rights, powers, duties, and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees designated for such
purpose hereunder, shall be exercised, solely by such Trustees.
(ii) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and
exercised or performed by the Property Trustee or by the Property Trustee
and such co-trustee or separate trustee jointly, as shall be provided in
the instrument appointing such co-trustee or separate trustee, except to
the extent that under any law of any jurisdiction in which any particular
act is to be performed, the Property Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties, and obligations shall be exercised and performed by such co-trustee
or separate trustee.
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(iii) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section 8.09, and, in case a Debenture Event of
Default has occurred and is continuing, the Property Trustee shall have
power to accept the resignation of, or remove, any such co-trustee or
separate trustee without the concurrence of the Depositor. Upon the written
request of the Property Trustee, the Depositor shall join with the Property
Trustee in the execution, delivery, and performance of all instruments and
agreements necessary or proper to effectuate such resignation or removal. A
successor to any co-trustee or separate trustee so resigned or removed may
be appointed in the manner provided in this Section 8.09.
(iv) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee, or any
other such trustee hereunder.
(v) The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Property Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
Section 8.10. Resignation and Removal; Appointment of Successor. (a)
No resignation or removal of any Trustee (as the case may be, the "Relevant
Trustee") and no appointment of a successor Relevant Trustee pursuant to this
Article shall become effective until the acceptance of appointment by the
successor Relevant Trustee in accordance with the requirements of Section 8.11.
(b) The Relevant Trustee may resign at any time by giving written
notice thereof to the Depositor and the Securityholders. If the instrument of
acceptance by a successor Relevant Trustee required by Section 8.11 shall not
have been delivered to the resigning Relevant Trustee within 30 days after the
giving of such notice of resignation, the resigning Relevant Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Relevant Trustee.
(c) Unless a Debenture Event of Default shall have occurred and be
continuing, any 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 Property Trustee or the Delaware Trustee, or both of them, 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 Relevant Trustee (in its individual capacity and on behalf of the
Trust).
(d) If the Relevant Trustee shall resign, be removed or become
incapable of continuing to act as the Relevant 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
Relevant Trustee, shall promptly appoint a successor Relevant Trustee, and the
retiring Relevant Trustee so succeeded shall comply with the
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requirements of Section 8.11. If the Relevant Trustee shall resign, be removed
or become incapable of continuing to act as the Relevant 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 the retiring Relevant Trustee, shall promptly appoint a successor Relevant
Trustee or Trustees, and the Relevant Trustee so succeeded shall comply with the
requirements of Section 8.11. If no successor Relevant 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 Relevant Trustee.
(e) A retiring Relevant Trustee shall give notice of each resignation
and each removal of such Relevant Trustee 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 Relevant 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 or a Delaware Trustee
who is a natural person 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 or Delaware Trustee, as the case may be, 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 who is a natural person 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).
(g) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any successor Property Trustee or Delaware Trustee.
Section 8.11. Acceptance of Appointment by Successor. (a) In case
of the appointment hereunder of a successor Relevant Trustee, the retiring
Relevant Trustee and each successor Trustee shall execute and deliver an
amendment hereto wherein each successor Relevant 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 Relevant
Trustee all the rights, powers, trusts and duties of the retiring Relevant
Trustee with respect to the Trust Securities and the Trust and (ii) shall add to
or change any of the provisions of this Trust Agreements as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Relevant Trustee, it being understood that nothing herein or in such
amendment shall constitute such Relevant Trustee co-trustees of the same trust
and that each such Relevant Trustee shall be trustee of a trust or trusts
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hereunder separate and apart from any trust or trusts hereunder administered by
any other such Relevant Trustee and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant
Trustee all Trust Property, all proceeds thereof and money held by such retiring
Relevant Trustee hereunder with respect to the Trust Securities.
(b) Upon request of any such successor Relevant Trustee, the retiring
Relevant Trustee shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Relevant Trustee all such
rights, powers and trusts referred to in the preceding paragraph.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance the successor Relevant 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 the Delaware 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 Relevant Trustee shall be a party, or
any Person succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided such Person shall be otherwise qualified and eligible under
this Article VIII, without the execution or filing of any paper, the giving of
any notice or the taking of 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 July 1 of each year, commencing July 1, 1999.
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Property Trustee with each
stock exchange upon which the Preferred Securities are listed, with the
Commission and with the Depositor. The Depositor will notify the Property
Trustee when any Preferred Securities shall have been listed on any stock
exchange.
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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 shall be given in the form of an Officer's
Certificate. Any opinion of counsel required to be given pursuant to Section
314(c)(2) of the Trust Indenture Act shall be given in the form of an Opinion of
Counsel.
Section 8.17. Number of Trustees. (a) The number of Trustees shall
be four, provided that the Depositor, by written instrument, may increase or
decrease the number of Administrative Trustees so long as there is at least one.
(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), the vacancy created
thereby 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
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Trust or to any other Covered Person, an Indemnified Person acting under this
Trust Agreement shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Trust Agreement; provided,
however, that an Indemnified Person shall be liable for any loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct, (subject, with respect to the Property Trustee, to Section
8.01). The provisions of this Trust Agreement, to the extent that they restrict
the duties and liabilities of an Indemnified Person otherwise existing at law or
in equity (other than the duties imposed on the Property Trustee under the Trust
Indenture Act), are agreed by the parties hereto to replace such other duties
and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein and subject to the
provisions of the Trust Indenture Act:
(i) whenever a conflict of interest exists or arises between
an Indemnified Person and the Trust or any Covered Person; or
(ii) whenever this Trust Agreement or any other agreement
contemplated herein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Securityholder,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or terms so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Trust Agreement or any other
agreement contemplated herein or of any duty or obligation of the Indemnified
Person at law or in equity or otherwise; and
(c) Unless otherwise expressly provided herein and subject to the
provisions of the Trust Indenture Act, whenever in this Trust Agreement an
Indemnified Person is permitted or required to make a decision
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it reasonably desires, including its own interests, and shall
have no duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and, to the extent
permitted by applicable law, shall not be subject to any other or different
standard imposed by this Trust Agreement or by applicable law.
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ARTICLE IX.
Termination and Liquidation
Section 9.01. Termination Upon Expiration Date. The Trust shall
automatically terminate on the Expiration Date and the Trust Property shall be
distributed in accordance with Section 9.04.
Section 9.02. Early Termination. Upon the first to occur of (such
first occurrence, an "Early Termination Event"):
(i) a Bankruptcy Event in respect of, or the dissolution or
liquidation of, the Depositor;
(ii) the redemption of all of the Preferred Securities;
(iii) the occurrence of a Special Event and the election by
the Depositor to terminate that Trust pursuant to Section 9.04(d);
(iv) the entrance by a court of competent jurisdiction of an
order for judicial termination of the Trust;
the Trust shall terminate and the Trustees shall take such action as is required
by Section 9.04.
Section 9.03. Termination. The respective obligations and
responsibilities of the Trust and the Trustees created hereby shall terminate
upon the latest to occur of the following: (i) the distribution by the Property
Trustee to Securityholders upon the liquidation of the Trust pursuant to Section
9.04, or upon the redemption of all of the Trust Securities pursuant to Section
4.02 or 9.04(d), of all amounts required to be distributed hereunder upon the
final payment of the Trust Securities; (ii) the payment of all amounts due to
creditors of the Trust; (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 and (iv) the filing
of a certificate of cancellation with the Delaware Secretary of State.
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:
-40-
<PAGE>
(i) state the Liquidation Date, which, in the case of an Early
Termination Event specified in clause (iii) of Section 9.02 shall be no
later than the 90th day following the occurrence of the Special Event;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for Debentures, or
in the case of a Section 9.04(e) liquidation, receive a Liquidation
Distribution, as the Administrative Trustees or the Property Trustee shall
deem appropriate.
(b) In order to effect the distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
outstanding Trust Securities Certificates.
(c) After the Liquidation Date, (i) the Trust Securities will no
longer be deemed to be Outstanding, (ii) certificates representing a Like Amount
of Debentures will be issued to Holders of Trust Securities Certificates, upon
surrender of such Trust Securities Certificates to the Property Trustee or its
agent for exchange, (iii) the Depositor shall use its best 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.
-41-
<PAGE>
(e) In the event that, notwithstanding the other provisions of this
Section 9.04, whether because of an order for termination entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders will be entitled
to receive out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of all amounts due to creditors of the
Trust, if any, as provided by applicable law, an amount equal to the Liquidation
Amount per Trust Security plus accumulated and unpaid Distributions thereon to
the date of payment (such amount being the "Liquidation Distribution"). If,
upon any such dissolution, winding up or termination, the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then, subject
to the next succeeding sentence, the amounts payable by the Trust on the Trust
Securities shall be paid on a pro rata basis (based upon Liquidation Amounts).
The Holder of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination pro rata
(determined as aforesaid) with Holders of Preferred Securities, except that, if
a Debenture Event of Default has occurred and is continuing or if a Debenture
Event of Default has not occurred solely by reason of a requirement that time
lapse or notice be given, the Liquidation Distribution with respect to the
Preferred Securities shall be paid in full prior to the making of any
Liquidation Distribution with respect to the Common Securities.
Section 9.05. Mergers, Consolidations, Amalgamations or Replacements
of the Trust. The Trust may not merge with or into, consolidate, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except pursuant
to this Section 9.05. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the Property Trustee or the
Holders of the Preferred Securities, the Trust may merge with or into,
consolidate, amalgamate, be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any state; provided, however, that (i) such successor entity
either (a) expressly assumes all of the obligations of the Trust with respect to
the Preferred Securities or (b) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Preferred Securities rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) the Depositor expressly
appoints a trustee of such successor entity possessing substantially the same
powers and duties as the Property Trustee as the holder of the Debentures, (iii)
the Successor Securities are listed or traded, or any Successor Securities will
be listed or traded upon notification of issuance, on any national securities
exchange or other organization on which the Preferred Securities are then
listed, if any, (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
purpose substantially identical to that of
-42-
<PAGE>
the Trust, (vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Depositor has received an Opinion of Counsel
to the effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor any successor entity will be required to register as an investment
company under the Investment Company Act and (viii) the Depositor owns all of
the Common Securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not,
except with the consent of Holders of 100% of the aggregate Liquidation Amount
of the Outstanding Preferred Securities, consolidate, amalgamate, merge with or
into, or be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to any other Person or permit any other Person to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
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. 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 10.02. Amendment. (a) This Trust Agreement may be amended
from time to time by the 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.
-43-
<PAGE>
(b) Except as provided in Sections 6.01(c) and 10.02(c), any
provision of this Trust Agreement may be amended by the 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 10.02(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 this Section 10.02(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 or which would cause
the Trust to be classified as other than a grantor trust for United States
federal income tax purposes.
(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 10.02 is authorized or permitted by, and conforms to, the terms
of this Section 10.02, has been duly authorized by and lawfully executed and
delivered on behalf of the other requisite parties, and that it is proper for
the Trustees under the provisions of this Section 10.02 to join in the execution
thereof.
-44-
<PAGE>
Section 10.03. 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 10.04. 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 10.05. 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 10.06. Headings. The Article and Section headings are for
convenience only and shall not affect the construction of this Trust Agreement.
Section 10.07. 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 Atlantic City Electric 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, the Delaware 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, to The Bank
of New York, 101 Barclay Street - 21 West, New York, New York 10286 marked
"Attention: Corporate Trust Department" (ii) with respect to the Delaware
Trustee, to The Bank of New York (Delaware), White Clay Center, Route 273,
Newark, Delaware 19711 and (iii) with respect to the Trust or the Administrative
Trustees, at the address above for notice to the Depositor, marked "Attention:
Administrative Trustees for Atlantic Capital II". Such notice, demand or other
communication to or upon the Trust or the Property Trustee shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing by
the Trust or the Property Trustee.
Section 10.08. 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,
-45-
<PAGE>
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 10.08, 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 10.08
shall survive the termination of this Trust Agreement.
Section 10.09. Conflict with Trust Indenture Act. (a) If any
provision hereof limits, qualifies or conflicts with another provision hereof
which is required or deemed to be included in this Trust Agreement by, or is
otherwise governed by, any of the provisions of the Trust Indenture Act, such
other provisions shall control; and if any provision hereof otherwise conflicts
with the Trust Indenture Act, the Trust Indenture Act shall control.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Trust Securities as equity
securities representing interests in the Trust.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON
BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST
SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND THE
SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE INDENTURE AND
SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS
THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
-46-
<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.
ATLANTIC CITY ELECTRIC COMPANY
By:
-------------------------------
Title: Senior Vice President and
Chief Financial Officer
THE BANK OF NEW YORK,
as Property Trustee
By:
-------------------------------
Title:
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:
-------------------------------
Title:
----------------------------------
Louis M. Walters, solely in his
capacity as Administrative Trustee
----------------------------------
Stephanie M. Scola, solely in her
capacity as Administrative Trustee
-47-
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
ATLANTIC CAPITAL II
THIS CERTIFICATE OF TRUST of Atlantic Capital II (the "Trust"), dated
as of , 1998, 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
Atlantic Capital II.
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:
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
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.
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee not in his (her) individual capacity
but solely as Trustee
By:
--------------------------- ------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Property 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
ATLANTIC CAPITAL II
Common Securities
(Liquidation Amount $25 per Common Security)
Atlantic Capital II, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that Atlantic City
Electric Company (the "Holder") is the registered owner of the number set forth
above of common securities of the Trust representing undivided beneficial
ownership interests in the assets of the Trust and designated as Common
Securities (Liquidation Amount $25 per Common Security) (the "Common
Securities"). In accordance with Section 5.02 of the Trust Agreement (as defined
below) the Common Securities are not transferable and any attempted transfer
hereof shall be void. The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth in, and this certificate and the Common Securities represented hereby are
issued and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Trust Agreement of the Trust dated as of October 1, 1998,
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 .
ATLANTIC CAPITAL II
By:
-----------------------------
not in his (her) individual
capacity, but solely as
Administrative Trustee
B-2
<PAGE>
[Clearing Agency Legend]
EXHIBIT C
Certificate Number Number of Preferred Securities
P- CUSIP NO.
Certificate Evidencing Preferred Securities
of
ATLANTIC CAPITAL II
% Cumulative Trust Preferred Capital Securities
(Liquidation Amount $25 per Preferred Security)
Atlantic Capital II, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that (the
"Holder") is the registered owner of the number set forth above of preferred
securities of the Trust representing undivided beneficial ownership 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 October 1, 1998, as the same may be amended from time to time (the "Trust
Agreement"). The holder of this certificate is entitled to the benefits and
agrees to the subordination provisions and other terms of the Guarantee
Agreement of Atlantic City Electric Company, a New Jersey corporation, and The
Bank of New York, as guarantee trustee, dated as of October 1, 1998 (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.
C-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:
ATLANTIC CAPITAL II
By:
---------------------------------
[ ]
not in his (her) individual
capacity, but solely as
Administrative Trustee
C-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)
C-3
<PAGE>
Exhibit 4-C
__________________________________________
ATLANTIC CITY ELECTRIC COMPANY
TO
THE BANK OF NEW YORK
TRUSTEE
_________
INDENTURE
(FOR UNSECURED SUBORDINATED DEBT SECURITIES
RELATING TO TRUST SECURITIES)
DATED AS OF OCTOBER 1, 1998
__________________________________________
<PAGE>
ATLANTIC CITY ELECTRIC COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF OCTOBER 1, 1998
<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)..................................................................... 1003
(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>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITAL OF THE COMPANY....................................................................... 1
ARTICLE ONE Definitions and Other Provisions of General Application......................... 1
SECTION 101. Definitions............................................................... 1
Act................................................................................ 2
Affiliate.......................................................................... 2
Authenticating Agent............................................................... 2
Authorized Officer................................................................. 2
Board of Directors................................................................. 2
Board Resolution................................................................... 2
Business Day....................................................................... 2
Commission......................................................................... 2
Company............................................................................ 3
Company Request" or "Company Order................................................. 3
Corporate Trust Office............................................................. 3
corporation........................................................................ 3
Creditor........................................................................... 3
Defaulted Interest................................................................. 3
Dollar" or " $..................................................................... 3
Event of Default................................................................... 3
Governmental Authority............................................................. 3
Government Obligations............................................................. 3
Guarantee.......................................................................... 3
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............................................................... 5
Property Trustee................................................................... 5
Redemption Date.................................................................... 5
Redemption Price................................................................... 5
Regular Record Date................................................................ 5
Responsible Officer................................................................ 5
Securities......................................................................... 5
Security Register" and "Security Registrar......................................... 5
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be part of
the Indenture.
-i-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Senior Indebtedness............................................................... 6
Special Record Date............................................................... 6
Stated Maturity................................................................... 6
Trust............................................................................. 6
Trust Agreement................................................................... 6
Trust Indenture Act............................................................... 6
Trustee........................................................................... 6
United States..................................................................... 6
SECTION 102. Compliance Certificates and Opinions..................................... 7
SECTION 103. Form of Documents Delivered to Trustee................................... 7
SECTION 104. Acts of Holders.......................................................... 8
SECTION 105. Notices, etc. to Trustee and Company..................................... 9
SECTION 106. Notice to Holders of Securities; Waiver.................................. 10
SECTION 107. Conflict with Trust Indenture Act........................................ 10
SECTION 108. Effect of Headings and Table of Contents................................. 11
SECTION 109. Successors and Assigns................................................... 11
SECTION 110. Separability Clause...................................................... 11
SECTION 111. Benefits of Indenture.................................................... 11
SECTION 112. Governing Law............................................................ 11
SECTION 113. Legal Holidays........................................................... 11
ARTICLE TWO Security Forms................................................................. 12
SECTION 201. Forms Generally.......................................................... 12
SECTION 202. Form of Trustee's Certificate of Authentication.......................... 12
ARTICLE THREE The Securities............................................................... 13
SECTION 301. Amount Unlimited; Issuable in Series..................................... 13
SECTION 302. Denominations............................................................ 15
SECTION 303. Execution, Authentication, Delivery and Dating........................... 16
SECTION 304. Temporary Securities..................................................... 17
SECTION 305. Registration, Registration of Transfer and Exchange...................... 18
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities......................... 19
SECTION 307. Payment of Interest; Interest Rights Preserved........................... 19
SECTION 308. Persons Deemed Owners.................................................... 20
SECTION 309. Cancellation by Security Registrar....................................... 21
SECTION 310. Computation of Interest.................................................. 21
SECTION 311. Extension of Interest Payment............................................ 21
SECTION 312. Payment of Expenses...................................................... 21
ARTICLE FOUR - Redemption of Securities..................................................... 22
SECTION 401. Applicability of Article................................................. 22
SECTION 402. Election to Redeem; Notice to Trustee.................................... 22
SECTION 403. Selection of Securities to Be Redeemed................................... 22
SECTION 404. Notice of Redemption..................................................... 23
SECTION 405. Securities Payable on Redemption Date.................................... 24
SECTION 406. Securities Redeemed in Part.............................................. 24
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be part of
the Indenture.
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ARTICLE FIVE - Sinking Funds................................................................ 24
SECTION 501. Applicability of Article.................................................. 24
SECTION 502. Satisfaction of Sinking Fund Payments with Securities..................... 25
SECTION 503. Redemption of Securities for Sinking Fund................................. 25
ARTICLE SIX - Covenants...................................................................... 26
SECTION 601. Payment of Principal, Premium and Interest................................ 26
SECTION 602. Maintenance of Office or Agency........................................... 26
SECTION 603. Money for Securities Payments to Be Held in Trust......................... 26
SECTION 604. Corporate Existence....................................................... 28
SECTION 605. Maintenance of Properties................................................. 28
SECTION 606. Annual Officer's Certificate as to Compliance............................. 28
SECTION 607. Waiver of Certain Covenants............................................... 28
SECTION 608. Restriction on Payment of Dividends....................................... 28
SECTION 609. Maintenance of Trust Existence............................................ 29
ARTICLE SEVEN - Satisfaction and Discharge.................................................. 29
SECTION 701. Defeasance................................................................ 29
SECTION 702. Satisfaction and Discharge of Indenture................................... 31
SECTION 703. Application of Trust Money................................................ 32
ARTICLE EIGHT - Events of Default; Remedies.................................................. 32
SECTION 801. Events of Default......................................................... 32
SECTION 802. Acceleration of Maturity; Rescission and Annulment........................ 33
SECTION 803. Collection of Indebtedness and Suits for Enforcement by Trustee........... 35
SECTION 804. Trustee May File Proofs of Claim.......................................... 35
SECTION 805. Trustee May Enforce Claims Without Possession of Securities............... 36
SECTION 806. Application of Money Collected............................................ 36
SECTION 807. Limitation on Suits....................................................... 36
SECTION 808. Unconditional Right of Holders to Receive Principal,
Premium and Interest..................................................... 37
SECTION 809. Restoration of Rights and Remedies........................................ 37
SECTION 810. Rights and Remedies Cumulative............................................ 37
SECTION 811. Delay or Omission Not Waiver.............................................. 38
SECTION 812. Control by Holders of Securities.......................................... 38
SECTION 813. Waiver of Past Defaults................................................... 38
SECTION 814. Undertaking for Costs..................................................... 39
SECTION 815. Waiver of Stay or Extension Laws.......................................... 39
ARTICLE NINE - The Trustee................................................................... 39
SECTION 901. Certain Duties and Responsibilities....................................... 39
SECTION 902. Notice of Defaults........................................................ 40
SECTION 903. Certain Rights of Trustee................................................. 40
SECTION 904. Not Responsible for Recitals or Issuance of Securities.................... 41
SECTION 905. May Hold Securities....................................................... 42
SECTION 906. Money Held in Trust....................................................... 42
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be part of
the Indenture.
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SECTION 907. Compensation and Reimbursement............................................. 42
SECTION 908. Disqualification; Conflicting Interests.................................... 43
SECTION 909. Corporate Trustee Required; Eligibility.................................... 43
SECTION 910. Resignation and Removal; Appointment of Successor.......................... 44
SECTION 911. Acceptance of Appointment by Successor..................................... 45
SECTION 912. Merger, Conversion, Consolidation or Succession to Business................ 46
SECTION 913. Preferential Collection of Claims Against Company.......................... 47
SECTION 914. Co-trustees and Separate Trustees.......................................... 47
SECTION 915. Appointment of Authenticating Agent........................................ 48
ARTICLE TEN - Holders' Lists and Reports by Trustee and Company............................... 50
SECTION 1001. Lists of Holders.......................................................... 50
SECTION 1002. Reports by Trustee........................................................ 50
SECTION 1003. Reports to the Trustee.................................................... 50
ARTICLE ELEVEN - Consolidation, Merger, Conveyance or Other Transfer.......................... 51
SECTION 1101. Company May Consolidate, etc., Only on Certain Terms...................... 51
SECTION 1102. Successor Corporation Substituted......................................... 51
ARTICLE TWELVE - Supplemental Indentures...................................................... 52
SECTION 1201. Supplemental Indentures Without Consent of Holders........................ 52
SECTION 1202. Supplemental Indentures With Consent of Holders........................... 53
SECTION 1203. Execution of Supplemental Indentures...................................... 55
SECTION 1204. Effect of Supplemental Indentures......................................... 55
SECTION 1205. Conformity With Trust Indenture Act....................................... 55
SECTION 1206. Reference in Securities to Supplemental Indentures........................ 55
SECTION 1207. Modification Without Supplemental Indenture............................... 55
ARTICLE THIRTEEN - Meetings of Holders; Action Without Meeting................................ 56
SECTION 1301. Purposes for Which Meetings May Be Called................................. 56
SECTION 1302. Call, Notice and Place of Meetings........................................ 56
SECTION 1303. Persons Entitled to Vote at Meetings...................................... 57
SECTION 1304. Quorum; Action............................................................ 57
SECTION 1305. Attendance at Meetings; Determination of Voting Rights;
Conduct and Adjournment of Meetings...................................... 58
SECTION 1306. Counting Votes and Recording Action of Meetings........................... 59
SECTION 1307. Action Without Meeting.................................................... 59
ARTICLE FOURTEEN - Immunity of Incorporators, Stockholders, Officers and Directors............ 59
SECTION 1401. Liability Solely Corporate................................................ 59
ARTICLE FIFTEEN - Subordination of Securities................................................. 60
SECTION 1501. Securities Subordinate to Senior Indebtedness............................. 60
SECTION 1502. Payment Over of Proceeds of Securities.................................... 60
SECTION 1503. Disputes with Holders of Certain Senior Indebtedness...................... 62
SECTION 1504. Subrogation............................................................... 62
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be part of
the Indenture.
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SECTION 1505. Obligation of the Company Unconditional................................... 63
SECTION 1506. Priority of Senior Indebtedness Upon Maturity............................. 63
SECTION 1507. Trustee as Holder of Senior Indebtedness.................................. 63
SECTION 1508. Notice to Trustee to Effectuate Subordination............................. 63
SECTION 1509. Modification, Extension, etc. of Senior Indebtedness...................... 64
SECTION 1510. Trustee Has No Fiduciary Duty to Holders of Senior Indebtedness........... 64
SECTION 1511. Paying Agents Other Than the Trustee...................................... 64
SECTION 1512. Rights of Holders of Senior Indebtedness Not Impaired..................... 65
SECTION 1513. Effect of Subordination Provisions; Termination........................... 65
Testimonium................................................................................... 74
Signatures and Seals.......................................................................... 74
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be part of
the Indenture.
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<PAGE>
INDENTURE, dated as of October 1, 1998, between ATLANTIC CITY ELECTRIC
COMPANY, a corporation duly organized and existing under the laws of the State
of New Jersey (herein called the "Company"), having its principal office at 800
King Street, Wilmington, Delaware 19899, and THE BANK OF NEW YORK, a New York
banking corporation, having its principal corporate trust office at 101 Barclay
Street - 21 West, New York, New York 10286, as Trustee (herein called the
"Trustee").
RECITAL OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness (herein called
the "Securities"), in an unlimited aggregate principal amount to be issued in
one or more series as contemplated herein; and all acts necessary to make this
Indenture a valid agreement of the Company have been performed.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires, capitalized terms used herein
shall have the meanings assigned to them in Article One of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of any
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all terms used herein without definition which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles
in the United States, and, except as otherwise herein expressly provided, the
term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted in the United States at the date of such
computation or, at the election of the Company from time to time, at the date
of the execution and delivery of this Indenture; provided, however, that in
determining generally accepted accounting principles applicable to the
Company,
<PAGE>
the Company shall, to the extent required, conform to any order, rule or
regulation of any admini strative 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.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or through one or
more intermediaries, whether through the ownership of voting securities, by
contract or otherwise; and the terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
"AUTHENTICATING AGENT" means any Person (other than the Company or an
Affiliate of the Company) authorized by the Trustee pursuant to Section 915 to
act on behalf of the Trustee to authenticate one or more series of Securities.
"AUTHORIZED OFFICER" means the Chairman of the Board, the President, any
Vice President, the Treasurer, any Assistant Treasurer, or any other officer or
agent of the Company duly authorized by the Board of Directors to act in respect
of matters relating to this Indenture.
"BOARD OF DIRECTORS" means either the board of directors of the Company
or any committee thereof duly authorized to act in respect of matters relating
to this Indenture.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY", when used with respect to a Place of Payment or any
other particular location specified in the Securities or this Indenture, means
any day, other than a Saturday or Sunday, which is not a day on which banking
institutions or trust companies in such Place of Payment or other location are
generally authorized or required by law, regulation or executive order to remain
closed, except as may be otherwise specified as contemplated by Section 301.
"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the date of execution and delivery of this
Indenture such Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body, if any, performing such
duties at such time.
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<PAGE>
"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 101 Barclay Street - 21 West, New York, New York 10286.
"CORPORATION" means a corporation, association, company, joint stock
company or business trust.
"CREDITOR" has the meaning specified in Section 312.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DOLLAR" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"EVENT OF DEFAULT" has the meaning specified in Section 801.
"GOVERNMENTAL AUTHORITY" means the government of the United States or of
any State or Territory thereof or of the District of Columbia or of any county,
municipality or other political subdivision of any of the foregoing, or any
department, agency, authority or other instrumentality of any of the foregoing.
"GOVERNMENT OBLIGATIONS" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
and entitled to the benefit of the full faith and credit thereof; and
(b) certificates, depositary receipts or other instruments which
evidence a direct ownership interest in obligations described in clause
(a) above or in any specific interest or principal payments due in
respect thereof; provided, however, that the custodian of such
obligations or specific interest or principal payments shall be a bank
or trust company (which may include the Trustee or any Paying Agent)
subject to Federal or state supervision or examination with a combined
capital and surplus of at least $50,000,000; and provided, fur ther,
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.
-3-
<PAGE>
"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, but not an employee of the Trust, the Trustee, or other
counsel reasonably 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 Security Registrar or
delivered to the Trustee for cancellation;
(b) Securities deemed to have been paid in accordance with Section 701;
and
(c) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it and the Company that such Securities are held by a bona
fide purchaser or purchasers in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether or not the Holders of the
requisite principal amount of the Securities Outstanding under this Indenture,
or the Outstanding Securities of any series, have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether or not
a quorum is present at a meeting of Holders of Securities, Securities owned by
the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor (unless the Company, such Affiliate or such
obligor owns all Securities Outstanding under this Indenture, or all Outstanding
Securities of each such series, as the case may be, determined without regard to
this provision) shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver or
upon any such determination as to the presence of a quorum, only Securities
which the Trustee knows to be so owned shall be so disregarded; provided,
however, that Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
-4-
<PAGE>
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 unincorpo rated organization or any Governmental Authority.
"PLACE OF PAYMENT", when used with respect to the Securities of any
series, means the place or places, specified as contemplated by Section 301, at
which, subject to Section 602, principal of and premium, if any, and interest,
if any, on the Securities of such series are payable.
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed (to the extent
lawful) to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.
"PREFERRED SECURITIES" means any preferred securities issued by a Trust
or similar securities issued by permitted successors to such Trust in accordance
with the Trust Agreement pertaining to such Trust.
"PROPERTY TRUSTEE" means The Bank of New York, as Trustee under the
Trust Agreement.
"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.
-5-
<PAGE>
"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 and
$72,164,950 principal amount of 8.25% Junior Subordinated Deferrable Interest
Debentures of the Company issued under its Junior Subordinated Indenture dated
as of October 1, 1996 with The Bank of New York, Trustee), 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 (other than trade accounts
payable in the ordinary course of business), 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 as originally
executed and delivered 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 in such Security to be due and payable (without regard to any provisions
for redemption, prepayment, acceleration, purchase or extension).
"TRUST" means Atlantic Capital II, 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 October 1, 1998, relating to Atlantic Capital II 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 the several holders referred to therein as each such agreement 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.
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<PAGE>
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 furnish to the Trustee an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action (including any covenants
compliance with which constitutes a condition precedent) have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(a) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such Person, such Person
has made such examination or investigation as is necessary to enable such
Person to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such Person, such
condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such Officer's Certificate or opinion are
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
-7-
<PAGE>
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever, subsequent to the receipt by the Trustee of any Board
Resolution, Officer's Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new document or instrument may
be substituted therefor in corrected form with the same force and effect as if
originally filed in the corrected form and, irrespective of the date or dates of
the actual execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered as of the date
or dates required with respect to the document or instrument for which it is
substituted. Anything in this Indenture to the contrary notwithstanding, if any
such corrective document or instrument indicates that action has been taken by
or at the request of the Company which could not have been taken had the
original document or instrument not contained such error or omission, the action
so taken shall not be invalidated or otherwise rendered ineffective but shall be
and remain in full force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the generality of
the foregoing, any Securities issued under the authority of such defective
document or instrument shall nevertheless be the valid obligations of the
Company entitled to the benefits of this Indenture equally and ratably with all
other Outstanding Securities, except as aforesaid.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
election, waiver or other action provided by this Indenture to be made, given
or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by an agent duly appointed in writing or, alternatively, may be embodied
in and evidenced by the record of Holders voting in favor thereof, either in
person or by proxies duly appointed in writing, at any meeting of Holders
duly called and held in accordance with the provisions of Article Thirteen,
or a combination of such instruments and any such record. Except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments or record or both are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments and so voting at any such
meeting. Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of a Security,
shall be sufficient for any purpose of this Indenture and (subject to Section
901) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section. The record of any meeting of Holders shall
be proved in the manner provided in Section 1306.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof
or may be proved in any other manner which the Trustee and the Company deem
sufficient. Where such execution is by a signer acting in a capacity other
than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority.
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(c) The principal amount and serial numbers of Securities held by any
Person, and the date of holding the same, shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of a Holder shall bind every future Holder of
the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is
made upon such Security.
(e) Until such time as written instruments shall have been delivered to
the Trustee with respect to the requisite percentage of principal amount of
Securities for the action contemplated by such instruments, any such
instrument executed and delivered by or on behalf of a Holder may be revoked
with respect to any or all of such Securities by written notice by such
Holder or any subsequent Holder, proven in the manner in which such
instrument was proven.
(f) Securities of any series authenticated and delivered after any Act
of Holders may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any action taken by such Act of Holders. If
the Company shall so determine, new Securities of any series so modified as
to conform, in the opinion of the Trustee and the Company, to such action may
be prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such series.
(g) If the Company shall solicit from Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company
may, at its option, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other Act, but the Company shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close
of business on the record date shall be deemed to be Holders for the purposes
of determining whether Holders of the requisite proportion of the Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of the record date.
SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with, the
Trustee by any Holder or by the Company, or the Company by the Trustee or by any
Holder, shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and delivered personally to an officer or
other responsible employee of the addressee, or transmitted by facsimile
transmission or other direct written electronic means to such telephone number
or other electronic communications address as the parties hereto shall from time
to time designate, or transmitted by certified or registered mail, charges
prepaid, to the applicable address set opposite such party's name below or to
such other address as either party hereto may from time to time designate:
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If to the Trustee, to:
The Bank of New York
101 Barclay Street - 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Telecopy: (212) 815-5915
If to the Company, to:
Atlantic City Electric 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 certified or registered mail,
on the date of receipt.
SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given, and shall be deemed given, to Holders if in writing and mailed, first-
class postage prepaid, to each Holder affected by such event, at the address of
such Holder as it appears in the Security Register, not later than the latest
date, if any, and not earlier than the earliest date, if any, prescribed for the
giving of such notice.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice to Holders by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder. In any
case where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders.
Any notice required by this Indenture may be waived in writing by the
Person entitled to re ceive 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
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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,
any Creditors, 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 for so long as any Preferred Securities remain outstanding, the
holders of such Preferred Securities, subject to certain limitations set forth
in this Indenture, may enforce the Company's obligations hereunder directly
against the Company as third party beneficiaries of this Indenture without first
proceeding against the Trust issuing such Preferred Securities or the Property
Trustee of the Trust.
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.
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 indenture
supplemental hereto, 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
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payable for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be, to such Business Day.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The definitive Securities of each series shall be in substantially the
form or forms thereof established in the indenture supplemental hereto
establishing such series or in a Board Resolution establishing such series, or
in an Officer's Certificate pursuant to such supplemental indenture or Board
Resolution, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. If the form or forms of Securities of any series
are established in a Board Resolution or in an Officer's Certificate pursuant to
a Board Resolution, such Board Resolution and Officer's Certificate, if any,
shall be delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
Unless otherwise specified as contemplated by Section 301, the
Securities of each series shall be issuable in registered form without coupons.
The definitive Securities shall be produced in such manner as shall be
determined by the officers executing such Securities, as evidenced by their
execution thereof.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in substantially
the form set forth below:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
_________________________________
as Trustee
By: _____________________________
Authorized Signatory
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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 such Trust
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 an indenture supplemental hereto or in a Board
Resolution, or in an Officer's Certificate pursuant to an indenture supplemental
hereto or a Board Resolution:
(a) the title of the Securities of such series (which shall distinguish
the Securities of such series from Securities of all other series);
(b) any limit upon the aggregate principal amount of the Securities of
such series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of such
series pursuant to Section 304, 305, 306, 406 or 1206 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(c) the Person or Persons (without specific identification) to whom
interest on Securities of such series shall be payable on any Interest
Payment Date, if other than the Persons in whose names such Securities (or
one or more Predecessor Securities) are registered at the close of business
on the Regular Record Date for such interest;
(d) the date or dates on which the principal of the Securities of such
series is payable or any formulary or other method or other means by which
such date or dates shall be determined, by reference or otherwise (without
regard to any provisions for redemption, prepayment, acceleration, purchase
or extension);
(e) the rate or rates at which the Securities of such series shall bear
interest, if any (including the rate or rates at which overdue principal
shall bear interest, if different from the rate or rates at which such
Securities shall bear interest prior to Maturity, and, if applicable, the
rate or rates at which overdue premium or interest shall bear interest, if
any), or any formulary or other method or other means by which such rate or
rates shall be determined, by reference or otherwise; the date or dates from
which such interest shall accrue; the Interest Payment Dates on which such
interest shall be payable and the Regular Record Date, if any, for the
interest payable on such Securities on any Interest Payment Date; the right
of the Company, if any, to extend the interest payment periods and the
duration of any such extension as contemplated by Section 311; and the basis
of computation of interest, if other than as provided in Section 310;
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(f) the place or places at which or methods by which (i) the principal
of and premium, if any, and interest, if any, on Securities of such series
shall be payable, (ii) registration of transfer of Securities of such series
may be effected, (iii) exchanges of Securities of such series may be effected
and (iv) notices and demands to or upon the Company in respect of the
Securities of such series and this Indenture may be served; the Security
Registrar for such series; and, if such is the case, that the principal of
such Securities shall be payable without presentment or surrender thereof;
(g) the period or periods within which, or the date or dates on which,
the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed, in whole or in part, at the option
of the Company and any restrictions on such redemptions, including but not
limited to a restriction on a partial redemption by the Company of the
Securities of any series, resulting in delisting of such Securities from any
national exchange;
(h) the obligation or obligations, if any, of the Company to redeem or
purchase the Securities of such series pursuant to any sinking fund or other
mandatory redemption provisions or at the option of a Holder thereof and the
period or periods within which or the date or dates on which, the price or
prices at which and the terms and conditions upon which such Securities shall
be redeemed or purchased, in whole or in part, pursuant to such obligation,
and applicable exceptions to the requirements of Section 404 in the case of
mandatory redemption or redemption at the option of the Holder;
(i) the denominations in which Securities of such series shall be
issuable if other than denominations of $25 and any integral multiple
thereof;
(j) the currency or currencies, including composite currencies, in
which payment of the principal of and premium, if any, and interest, if any,
on the Securities of such series shall be payable (if other than in Dollars);
(k) if the principal of or premium, if any, or interest, if any, on the
Securities of such series are to be payable, at the election of the Company
or a Holder thereof, in a coin or currency other than that in which the
Securities are stated to be payable, the period or periods within which and
the terms and conditions upon which, such election may be made;
(l) if the principal of or premium, if any, or interest, if any, on the
Securities of such series are to be payable, or are to be payable at the
election of the Company or a Holder thereof, in securities or other property,
the type and amount of such securities or other property, or the formulary or
other method or other means by which such amount shall be determined, and the
period or periods within which, and the terms and conditions upon which, any
such election may be made;
(m) if the amount payable in respect of principal of or premium, if
any, or interest, if any, on the Securities of such series may be determined
with reference to an index or other fact or event ascertainable outside this
Indenture, the manner in which such amounts shall be determined to the extent
not established pursuant to clause (e) of this paragraph;
(n) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 802;
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(o) any Events of Default, in addition to those specified in Section
801, with respect to the Securities of such series, and any covenants of the
Company for the benefit of the Holders of the Securities of such series, in
addition to those set forth in Article Six;
(p) the terms, if any, pursuant to which the Securities of such series
may be converted into or exchanged for shares of capital stock or other
securities of the Company or any other Person;
(q) the obligations or instruments, if any, which shall be considered
to be Government Obligations in respect of the Securities of such series
denominated in a currency other than Dollars or in a composite currency, and
any additional or alternative provisions for the reinstatement of the
Company's indebtedness in respect of such Securities after the satisfaction
and discharge thereof as provided in Section 701;
(r) if the Securities of such series are to be issued in global form,
(i) any limitations on the rights of the Holder or Holders of such Securities
to transfer or exchange the same or to obtain the registration of transfer
thereof, (ii) any limitations on the rights of the Holder or Holders thereof
to obtain certificates therefor in definitive form in lieu of temporary form
and (iii) any and all other matters incidental to such Securities;
(s) if the Securities of such series are to be issuable as bearer
securities, any and all matters incidental thereto which are not specifically
addressed in a supplemental indenture as contemplated by clause (g) of
Section 1201;
(t) to the extent not established pursuant to clause (r) of this
paragraph, any limitations on the rights of the Holders of the Securities of
such Series to transfer or exchange such Securities or to obtain the
registration of transfer thereof; and if a service charge will be made for
the registration of transfer or exchange of Securities of such series the
amount or terms thereof;
(u) any exceptions to Section 113, or variation in the definition of
Business Day, with respect to the Securities of such series;
(v) the designation of the Trust to which Securities of such series are
to be issued; and
(w) any other terms of the Securities of such series not inconsistent
with the provisions of this Indenture.
All Securities of any one series shall be substantially identical,
except as to principal amount and date of issue and except as may be set forth
in the terms of such series as contemplated above. The Securities of each
series shall be subordinated in right of payment to Senior Indebtedness as
provided in Article Fifteen.
SECTION 302. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, the Securities of each series shall be issuable in
denominations of $25 and any integral multiple thereof.
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SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, the Securities shall be executed on behalf of the
Company by an Authorized Officer and may have the corporate seal of the Company
affixed thereto or reproduced thereon attested by any other Authorized Officer
or by the Secretary or an Assistant Secretary of the Company. The signature of
any or all of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at the time of execution Authorized Officers or the Secretary or an
Assistant Secretary of the Company shall bind the Company, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold such offices at
the date of original issue of such Securities.
The Trustee shall authenticate and deliver Securities of a series, for
original issue, at one time or from time to time in accordance with the Company
Order referred to below, upon receipt by the Trustee of:
(a) the instrument or instruments establishing the form or forms and
terms of such series, as provided in Sections 201 and 301;
(b) a Company Order requesting the authentication and delivery of such
Securities and, to the extent that the terms of such Securities shall not
have been established in an indenture supplemental hereto or in a Board
Resolution, or in an Officer's Certificate pursuant to a supplemental
indenture or Board Resolution, all as contemplated by Sections 201 and 301,
establishing such terms;
(c) the Securities of such series, executed on behalf of the Company by
an Authorized Officer;
(d) an Opinion of Counsel to the effect that:
(i) the form or forms of such Securities have been duly authorized
by the Company and have been established in conformity with the
provisions of this Indenture;
(ii) the terms of such Securities have been duly authorized by the
Company and have been established in conformity with the provisions of
this Indenture; and
(iii) such Securities, when authenticated and delivered by the
Trustee and issued and delivered by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will
have been duly issued under this Indenture and will constitute valid and
legally binding obligations of the Company, entitled to the benefits
provided by this Indenture, and enforceable in accordance with their
terms, subject, as to enforcement, to laws relating to or affecting
generally the enforcement of creditors' rights, including, without
limitation, bankruptcy and insolvency laws and to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
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If the form or terms of the Securities of any series have been
established by or pursuant to a Board Resolution or an Officer's Certificate as
permitted by Sections 201 or 301, the Trustee shall not be required to
authenticate such Securities if the issuance of such Securities pursuant to this
Indenture will materially or adversely affect the Trustee's own rights, duties
or immunities under the Securities and this Indenture or otherwise in a manner
that is not reasonably acceptable to the Trustee.
Unless otherwise specified as contemplated by Section 301 with respect
to any series of Securities, each Security shall be dated the date of its
authentication.
Unless otherwise specified as contemplated by Section 301 with respect
to any series of Securities, no Security shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form provided
for herein executed by the Trustee or an Authenticating Agent by manual
signature, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been authenticated and
delivered hereunder to the Company, or any Person acting on its behalf, but
shall never have been issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section 309
together with a written statement (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) stating that such Security has
never been issued and sold by the Company, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits hereof.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may determine, as evidenced
by their execution of such Securities; provided, however, that temporary
Securities need not recite specific redemption, sinking fund, conversion or
exchange provisions.
Unless otherwise specified as contemplated by Section 301 with respect
to the Securities of any series, after the preparation of definitive Securities
of such series, the temporary Securities of such series shall be exchangeable,
without charge to the Holder thereof, for definitive Securities of such series
upon surrender of such temporary Securities at the office or agency of the
Company maintained pursuant to Section 602 in a Place of Payment for such
Securities. Upon such surrender of temporary Securities for such exchange, the
Company shall, except as aforesaid, execute and the Trustee shall authenticate
and deliver in exchange therefor definitive Securities of the same series, of
authorized denominations and of like tenor and aggregate principal amount.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder.
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SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept in each office designated pursuant to
Section 602, with respect to the Securities of each series, a register (all
registers kept in accordance with this Section being collectively referred to as
the "Security Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Securities of
such series and the registration of transfer thereof. The Company shall
designate one Person to maintain the Security Register for the Securities of
each series on a consolidated basis, and such Person is referred to herein, with
respect to such series, as the "Security Registrar." Anything herein to the
contrary notwithstanding, the Company may designate one or more of its offices
as an office in which a register with respect to the Securities of one or more
series shall be maintained, and the Company may designate itself the Security
Registrar with respect to one or more of such series. The Security Register
shall be open for inspection by the Trustee and the Company at all reasonable
times.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, upon surrender for registration of
transfer of any Security of such series at the office or agency of the Company
maintained pursuant to Section 602 in a Place of Payment for such series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of authorized denominations and of like tenor and aggregate
principal amount.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, any Security of such series may be
exchanged at the option of the Holder, for one or more new Securities of the
same series, of authorized denominations and of like tenor and aggregate
principal amount, upon surrender of the Securities to be exchanged at any such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities delivered upon any registration of transfer or exchange
of Securities shall be valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company, the Trustee or the Security
Registrar) be duly endorsed or shall be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Trustee or the Security
Registrar, as the case may be, duly executed by the Holder thereof or his
attorney duly authorized in writing.
Unless otherwise specified as contemplated by Section 301 with respect
to Securities of any series, no service charge shall be made for any
registration of transfer or exchange of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 406 or 1206 not
involving any transfer.
The Company shall not be required to execute or to provide for the
registration of transfer of or the exchange of (a) Securities of any series
during a period of 15 days immediately preceding the date of the mailing of any
notice of redemption of such Securities called for redemption or (b) any
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Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series, and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a) evidence
to their satisfaction of the ownership of and the destruction, loss or theft of
any Security and (b) such security or indemnity as may be reasonably required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security is held by a
Person purporting to be the owner of such Security, the Company shall execute
and the Trustee shall authenticate and deliver, in lieu of any such destroyed,
lost or stolen Security, a new Security of the same series, and of like tenor
and principal amount and bearing a number not contemporaneously outstanding.
Notwithstanding the foregoing, in case any such mutilated, destroyed,
lost or stolen Security has become or is about to become due and payable, the
Company in its discretion may, instead of issuing a new Security, pay such
Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone other than
the Holder of such new Security, and any such new Security shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Securities of such series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise specified as contemplated by Section 301 with respect
to the Securities of any series, interest on any Security which is payable, and
is punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Subject to Section 311, any interest on any Security of any series which
is payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest")
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shall forthwith cease to be payable to the Holder on the related Regular Record
Date by virtue of having been such Holder, and such Defaulted Interest may be
paid by the Company, at its election in each case, as provided in clause (a) or
(b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a date
(herein called a "Special Record Date") for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed to
be paid on each Security of such series and the date of the proposed payment,
and at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee for
such deposit on or prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall promptly cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Securities of such series at
the address of such Holder as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special Record
Date.
(b) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and premium, if
any, and (subject to Sections 305 and 307) interest, if any, on such Security
and for all other purposes whatsoever, whether or not such Security be overdue,
and neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
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SECTION 309. CANCELLATION BY SECURITY REGISTRAR.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Security
Registrar, be delivered to the Security Registrar and, if not theretofore
canceled, shall be promptly canceled by the Security Registrar. The Company may
at any time deliver to the Security Registrar for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever or which the Company shall not have issued and
sold, and all Securities so delivered shall be promptly canceled by the Security
Registrar. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by the Security
Registrar shall be disposed of in accordance with the customary procedures of
the Security Registrar as at the time of disposition shall be in effect (which
may or may not include destruction of the certificate or certificates evidencing
such Securities). 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. PAYMENT OF EXPENSES.
The Company, as issuer of the Securities, shall pay all debts and
obligations (other than with respect to the securities of a Trust) and all
costs, liabilities and expenses of a Trust (including, but not limited to all
costs, liabilities, expenses and indemnities under Section 8.06 of the Trust
Agreement dated as of October 1, 1998, and the comparable provisions of any
other Trust Agreement, all costs, liabilities and expenses relating to the
organization of a Trust, the fees and expenses of the Property Trustee, the
Delaware Trustee and the Administrative Trustees and all costs, liabilities and
expenses relating to the operation of the Trust (other than with respect to
payments due to the holders of the securities of a Trust pursuant to the terms
of such securities)) and to pay any and all taxes, duties, assessments or other
governmental charges of whatever nature (other than United States withholding
taxes) imposed by the United States or any other taxing authority, so that the
net amounts received and retained by a Trust after paying such fees, costs,
expenses, liabilities, debts and obligations will be equal to the amounts a
Trust would have received and retained had no such fees, costs, expenses,
liabilities, debts and obligations been incurred by or imposed on a Trust. The
foregoing obligations of the Company are for the benefit of, and shall be
enforceable by, any person to whom such fees, costs, expenses, liabilities,
debts and obligations are owed (each a "Creditor") whether or not such Creditor
has received notice thereof. Any such Creditor may enforce such obligations of
the Company directly against the Company, and the Company irrevocably waives any
right or remedy to require that any such Creditor take any action against
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a Trust or any other person before proceeding against the Company. The Company
shall execute such additional agreements as may be necessary to give full effect
to the foregoing. The provisions of this Section 312 shall survive the
termination for any reason of this Indenture.
ARTICLE FOUR
REDEMPTION OF SECURITIES
SECTION 401. APPLICABILITY OF ARTICLE.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of such
series) in accordance with this Article.
SECTION 402. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution or an Officer's Certificate. The Company shall, at least
45 days prior to the Redemption Date fixed by the Company (unless a shorter
notice shall be satisfactory to the Trustee), notify the Trustee in writing of
such Redemption Date and of the principal amount of such Securities to be
redeemed. In the case of any redemption of Securities (a) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture or (b) pursuant to an election of the
Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officer's Certificate
evidencing compliance with such restriction or condition.
SECTION 403. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected by the Trustee from the
Outstanding Securities of such series not previously called for redemption, by
such method as shall be provided for any particular series, or, in the absence
of any such provision, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Securities of such series or
any integral multiple thereof) of the principal amount of Securities of such
series of a denomination larger than the minimum authorized denomination for
Securities of such series; provided, however, that if, as indicated in an
Officer's Certificate, the Company shall have offered to purchase all or any
principal amount of the Securities then Outstanding of any series, and less than
all of such Securities as to which such offer was made shall have been tendered
to the Company for such purchase, the Trustee, if so directed by Company Order,
shall select for redemption all or any principal amount of such Securities which
have not been so tendered.
The Trustee shall promptly notify the Company and the Security Registrar
in writing of the Securities selected for redemption and, in the case of any
Securities selected to be redeemed in part, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
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SECTION 404. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in Section
106 to the Holders of the Securities to be redeemed not less than 30 nor more
than 60 days prior to the Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Securities of any series are to be redeemed,
the identification of the particular Securities to be redeemed and the
portion of the principal amount of any Security to be redeemed in part,
(d) that on the Redemption Date the Redemption Price, together with
accrued interest, if any, to the Redemption Date, will become due and payable
upon each such Security to be redeemed and, if applicable, that interest
thereon will cease to accrue on and after said date,
(e) the place or places where such Securities are to be surrendered for
payment of the Redemption Price and accrued interest, if any, unless it shall
have been specified as contemplated by Section 301 with respect to such
Securities that such surrender shall not be required,
(f) that the redemption is for a sinking or other fund, if such is the
case, and
(g) such other matters as the Company shall deem desirable or
appropriate.
Unless otherwise specified with respect to any Securities in accordance
with Section 301, with respect to any notice of redemption of Securities at the
election of the Company, unless, upon the giving of such notice, such Securities
shall be deemed to have been paid in accordance with Section 701, such notice
may state that such redemption shall be conditional upon the receipt by the
Paying Agent or Agents for such Securities, on or prior to the date fixed for
such redemption, of money sufficient to pay the principal of and premium, if
any, and interest, if any, on such Securities and that if such money shall not
have been so received such notice shall be of no force or effect and the Company
shall not be required to redeem such Securities. In the event that such notice
of redemption contains such a condition and such money is not so received, the
redemption shall not be made and within a reasonable time thereafter notice
shall be given, in the manner in which the notice of redemption was given, that
such money was not so received and such redemption was not required to be made,
and the Paying Agent or Agents for the Securities otherwise to have been
redeemed shall promptly return to the Holders thereof any of such Securities
which had been surrendered for payment upon such redemption.
Notice of redemption of Securities to be redeemed at the election of the
Company, and any notice of non-satisfaction of a condition for redemption as
aforesaid, shall be given by the Company or, at the Company's request, by the
Security Registrar in the name and at the expense of the Company. Notice of
mandatory redemption of Securities shall be given by the Security Registrar in
the name and at the expense of the Company.
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SECTION 405. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, and the conditions,
if any, set forth in such notice having been satisfied, the Securities or
portions thereof so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless, in the case of an unconditional notice of redemption, the Company shall
default in the payment of the Redemption Price and accrued interest, if any)
such Securities or portions thereof, if interest-bearing, shall cease to bear
interest. Upon surrender of any such Security for redemption in accordance with
such notice, such Security or portion thereof shall be paid by the Company at
the Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that no such surrender shall be a condition to such
payment if so specified as contemplated by Section 301 with respect to such
Security; and provided, further, that except as otherwise specified as
contemplated by Section 301 with respect to such Security, any installment of
interest on any Security the Stated Maturity of which installment is on or prior
to the Redemption Date shall be payable to the Holder of such Security, or one
or more Predecessor Securities, registered as such at the close of business on
the related Regular Record Date according to the terms of such Security and
subject to the provisions of Section 307.
SECTION 406. SECURITIES REDEEMED IN PART.
Upon the surrender of any Security which is to be redeemed only in part
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
a new Security or Securities of the same series, of any authorized denomination
requested by such Holder and of like tenor and in aggregate principal amount
equal to and in exchange for the unredeemed portion of the principal of the
Security so surrendered.
ARTICLE FIVE
SINKING FUNDS
SECTION 501. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of the Securities of any series, except as otherwise
specified as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 502. Each sinking fund payment shall be applied to the redemption of
Securities of the series in respect of which it was made as provided for by the
terms of such Securities.
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SECTION 502. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (a) may deliver to the Trustee Outstanding Securities (other
than any previously called for redemption) of a series in respect of which a
mandatory sinking fund payment is to be made and (b) may apply as a credit
Securities of such series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities or Outstanding Securities purchased by the Company, in each case in
satisfaction of all or any part of such mandatory sinking fund payment with
respect to the Securities of such series; provided, however, that no Securities
shall be applied in satisfaction of a mandatory sinking fund payment if such
Securities shall have been previously so applied. Securities so applied shall
be received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such mandatory sinking fund payment shall be reduced
accordingly.
SECTION 503. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment date for the
Securities of any series, the Company shall deliver to the Trustee an Officer's
Certificate specifying:
(a) the amount of the next succeeding mandatory sinking fund payment
for such series;
(b) the amount, if any, of the optional sinking fund payment to be made
together with such mandatory sinking fund payment;
(c) the aggregate sinking fund payment;
(d) the portion, if any, of such aggregate sinking fund payment which
is to be satisfied by the payment of cash; and
(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 have delivered such Officer's Certificate and, to the
extent applicable, all such Securities, on or prior to the 45th day prior to
such sinking fund payment date, the sinking fund payment for such series in
respect of such sinking fund payment date 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.
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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, on the Securities of each series in accordance with the terms
of such Securities and this Indenture.
SECTION 602. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment for the Securities
of each series an office or agency where payment of such Securities shall be
made, where the registration of transfer or exchange of such Securities may be
effected and where notices and demands to or upon the Company in respect of such
Securities and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of each such office or agency and prompt notice to the Holders of any such
change in the manner specified in Section 106. If at any time the Company shall
fail to maintain any such required office or agency in respect of Securities of
any series, or shall fail to furnish the Trustee with the address thereof,
payment of such Securities shall be made, registration of transfer or exchange
thereof may be effected and notices and demands in respect thereof may be served
at the Corporate Trust Office of the Trustee, and the Company hereby appoints
the Trustee as its agent for all such purposes in any such event.
The Company may also from time to time designate one or more other
offices or agencies with respect to the Securities of one or more series, for
any or all of the foregoing purposes and may from time to time rescind such
designations; provided, however, that, unless otherwise specified as
contemplated by Section 301 with respect to the Securities of such series, no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency for such purposes in each Place of
Payment for such Securities in accordance with the requirements set forth above.
The Company shall give prompt written notice to the Trustee, and prompt notice
to the Holders in the manner specified in Section 106, of any such designation
or rescission and of any change in the location of any such other office or
agency.
Anything herein to the contrary notwithstanding, any office or agency
required by this Section may be maintained at an office of the Company, in which
event the Company shall perform all functions to be performed at such office or
agency.
SECTION 603. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to the Securities of any series, it shall, on or before each due date of
the principal of and premium, if any, and interest, if any, on any of such
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and premium or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided. The Company shall promptly notify the Trustee of any
failure by the Company (or any other obligor on such Securities) to make any
payment of principal of or premium, if any, or interest, if any, on such
Securities.
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Whenever the Company shall have one or more Paying Agents for the
Securities of any series, it shall, on or before each due date of the principal
of and premium, if any, and interest, if any, on such Securities, deposit with
such Paying Agents sums sufficient (without duplication) to pay the principal
and premium or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company shall promptly notify the
Trustee of any failure by it so to act.
The Company shall cause each Paying Agent for the Securities of any
series, other than the Company or the Trustee, to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent shall:
(a) hold all sums held by it for the payment of the principal of and
premium, if any, or interest, if any, on such Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any failure by the Company (or any other
obligor upon such Securities) to make any payment of principal of or premium,
if any, or interest, if any, on such Securities; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held
in trust by such Paying Agent and furnish to the Trustee such information as
it possesses regarding the names and addresses of the Persons entitled to
such sums.
The Company may at any time pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company or such
Paying Agent, such sums to be held by the Trustee upon the same trusts as those
upon which such sums were held by the Company or such Paying Agent and, if so
stated in a Company Order delivered to the Trustee, in accordance with the
provisions of Article Seven; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of and premium, if
any, or interest, if any, on any Security and remaining unclaimed for two years
after such principal and premium, if any, or interest has become due and payable
shall be paid to the Company on Company Request, or, if then held by the
Company, shall be discharged from such trust; and, upon such payment or
discharge, the Holder of such Security shall, as an unsecured general creditor
and not as a Holder of an Outstanding Security, look only to the Company for
payment of the amount so due and payable and remaining unpaid, and all liability
of the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such payment to the Company, may at the expense of the Company cause to be
mailed, on one occasion only, notice to such Holder that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such mailing, any unclaimed balance of such money then
remaining will be paid to the Company.
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SECTION 604. CORPORATE EXISTENCE.
Subject to the rights of the Company under Article Eleven, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
SECTION 605. MAINTENANCE OF PROPERTIES.
The Company shall cause (or, with respect to property owned in common
with others, make reasonable effort to cause) all its properties used or useful
in the conduct of its business to be maintained and kept in good condition,
repair and working order and shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as,
in the judgment of the Company, may be necessary so that the business carried on
in connection therewith may be properly conducted; provided, however, that
nothing in this Section shall prevent the Company from discontinuing, or causing
the discontinuance of, the operation and maintenance of any of its properties if
such discontinuance is, in the judgment of the Company, desirable in the conduct
of its business.
SECTION 606. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
Not later than September 15 in each year, commencing September 15, 1999,
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.
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So long as any Preferred Securities of any series remain outstanding,
the Company shall not declare or pay any dividend on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company's
capital stock, or make any guarantee payments with respect to the foregoing
(other than payments under the Guarantee relating to such Preferred Securities)
if at such time (a) the Company shall be in default with respect to its payment
or other obligations under the Guarantee relating to such Preferred Securities,
(b) there shall have occurred and be continuing a payment default (whether
before or after expiration of any period of grace) or an Event of Default
hereunder or (c) the Company shall have elected to extend any interest payment
period as provided in Section 311, and any such period, or any extension
thereof, shall be continuing.
SECTION 609. MAINTENANCE OF TRUST EXISTENCE.
So long as Preferred Securities of any series remain outstanding, the
Company shall (i) maintain direct or indirect ownership of all interests in the
Trust which issued such Preferred Securities, other than such Preferred
Securities, (ii) not voluntarily (to the extent permitted by law) dissolve,
liquidate or wind up such Trust, except in connection with a distribution of the
Securities to the holders of the Preferred Securities in liquidation of such
Trust, (iii) remain the sole Depositor under the Trust Agreement (the
"Depositor") of such Trust and timely perform in all material respects all of
its duties as Depositor of such Trust, and (iv) use reasonable efforts to cause
such Trust to remain a business trust and otherwise continue to be treated as a
grantor trust for Federal income tax purposes provided that any permitted
successor to the Company under this Indenture may succeed to the Company's
duties as Depositor of such Trust; and provided further that the Company may
permit such Trust to consolidate or merge with or into another business trust or
other permitted successor under the Trust Agreement pertaining to such Trust so
long as the Company agrees to comply with this Section 609 with respect to such
successor business trust or other permitted successor.
ARTICLE SEVEN
SATISFACTION AND DISCHARGE
SECTION 701. DEFEASANCE.
Any Security or Securities, or any portion of the principal amount
thereof, shall be deemed to have been paid for all purposes of this Indenture,
and the entire indebtedness of the Company in respect thereof shall be deemed to
have been satisfied and discharged, if there shall have been irrevocably
deposited with the Trustee or any Paying Agent (other than the Company), in
trust:
(a) money in an amount which shall be sufficient, or
(b) in the case of a deposit made prior to the Maturity of such
Securities or portions thereof, Government Obligations, which shall not
contain provisions permitting the redemption or other prepayment thereof at
the option of the issuer thereof, the principal of and the interest on which
when due, without any regard to reinvestment thereof, will provide moneys
which, together with the money, if any, deposited with or held by the Trustee
or such Paying Agent, shall be sufficient, or
(c) a combination of (a) or (b) which shall be sufficient,
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to pay when due the principal of and premium, if any, and interest, if any, due
and to become due on such Securities or portions thereof on or prior to
Maturity; provided, however, that in the case of the provision for payment or
redemption of less than all the Securities of any series, such Securities or
portions thereof shall have been selected by the Trustee as provided herein and,
in the case of a redemption, the notice requisite to the validity of such
redemption shall have been given or irrevocable authority shall have been given
by the Company to the Trustee to give such notice, under arrangements
satisfactory to the Trustee; and provided, further, that the Company shall have
delivered to the Trustee and such Paying Agent:
(i) if such deposit shall have been made prior to the Maturity of
such Securities, a Company Order stating that the money and Government
Obligations deposited in accordance with this Section shall be held in
trust, as provided in Section 703; and
(ii) if Government Obligations shall have been deposited, an
Opinion of Counsel that the obligations so deposited constitute
Government Obligations and do not contain provisions permitting the
redemption or other prepayment at the option of the issuer thereof, and
an opinion of an independent public accountant of nationally recognized
standing, selected by the Company, to the effect that the requirements
set forth in clause (b) above have been satisfied; and
(iii) An Opinion of Counsel to the effect that the Holders of such
Securities will not recognize income, gain or loss for federal income
tax purposes as a result of the satisfaction and discharge of the
Company's indebtedness in respect of such Securities, and such Holders
will be subject to federal income taxation on the same amounts and in
the same manner and at the same times as if such satisfaction and
discharge had occurred.
Upon the deposit of money or Government Obligations, or both, in
accordance with this Section, together with the documents required by clauses
(i), (ii) and (iii) above, the Trustee shall, upon receipt of a Company Request,
acknowledge in writing that the Security or Securities or portions thereof with
respect to which such deposit was made are deemed to have been paid for all
purposes of this Indenture and that the entire indebtedness of the Company in
respect thereof has been satisfied and discharged as contemplated in this
Section. In the event that all of the conditions set forth in the preceding
paragraph shall have been satisfied in respect of any Securities or portions
thereof except that, for any reason, the Opinion of Counsel specified in clause
(iii) shall not have been delivered, such Securities or portions thereof shall
nevertheless be deemed to have been paid for all purposes of this Indenture, and
the Holders of such Securities or portions thereof shall nevertheless be no
longer entitled to the benefits of this Indenture or of any of the covenants of
the Company under Article Six (except the covenants contained in Sections 602
and 603) or any other covenants made in respect of such Securities or portions
thereof as contemplated by Section 301, but the indebtedness of the Company in
respect of such Securities or portions thereof shall not be deemed to have been
satisfied and discharged prior to Maturity for any other purpose, and the
Holders of such Securities or portions thereof shall continue to be entitled to
look to the Company for payment of the indebtedness represented thereby; and,
upon Company Request, the Trustee shall acknowledge in writing that such
Securities or portions thereof are deemed to have been paid for all purposes of
this Indenture.
If payment at Stated Maturity of less than all of the Securities of any
series is to be provided for in the manner and with the effect provided in this
Section, the Security Registrar shall select such Securities, or portions of
principal amount thereof, in the manner specified by Section 403 for selection
for redemption of less than all the Securities of a series.
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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, 312,
404, 503 (as to notice of redemption), 602, 603, 907 and 915 and this Article
Seven shall survive.
The Company shall pay, and shall indemnify the Trustee or any Paying
Agent with which Government Obligations shall have been deposited as provided in
this Section against, any tax, fee or other charge imposed on or assessed
against such Government Obligations or the principal or interest received in
respect of such Government Obligations, including, but not limited to, any such
tax payable by any entity deemed, for tax purposes, to have been created as a
result of such deposit.
Anything herein to the contrary notwithstanding, (a) if, at any time
after a Security would be deemed to have been paid for purposes of this
Indenture, and, if such is the case, the Company's indebtedness in respect
thereof would be deemed to have been satisfied or discharged, pursuant to this
Section (without regard to the provisions of this paragraph), the Trustee or any
Paying Agent, as the case may be, shall be required to return the money or
Government Obligations, or combination thereof, deposited with it as aforesaid
to the Company or its representative under any applicable Federal or State
bankruptcy, insolvency or other similar law, such Security shall thereupon be
deemed retroactively not to have been paid and any satisfaction and discharge of
the Company's indebtedness in respect thereof shall retroactively be deemed not
to have been effected, and such Security shall be deemed to remain Outstanding
and (b) any satisfaction and discharge of the Company's indebtedness in respect
of any Security shall be subject to the provisions of the last paragraph of
Section 603.
SECTION 702. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further effect
(except as hereinafter expressly provided), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) no Securities remain Outstanding hereunder; and
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company;
provided, however, that if, in accordance with the last paragraph of Section
701, any Security, previously deemed to have been paid for purposes of this
Indenture, shall be deemed retroactively not to have been so paid, this
Indenture shall thereupon be deemed retroactively not to have been satisfied and
discharged, as aforesaid, and to remain in full force and effect, and the
Company shall execute and deliver such instruments as the Trustee shall
reasonably request to evidence and acknowledge the same.
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Notwithstanding the satisfaction and discharge of this Indenture as
aforesaid, the obligations of the Company and the Trustee under Sections 304,
305, 306, 312, 404, 503 (as to notice of redemption), 602, 603, 907 and 915 and
this Article Seven shall survive.
Upon satisfaction and discharge of this Indenture as provided in this
Section, the Trustee shall assign, transfer and turn over to the Company,
subject to the lien provided by Section 907, any and all money, securities and
other property then held by the Trustee for the benefit of the Holders of the
Securities other than money and Government Obligations held by the Trustee
pursuant to Section 703.
SECTION 703. APPLICATION OF TRUST MONEY.
Neither the Government Obligations nor the money deposited pursuant to
Section 701, nor the principal or interest payments on any such Government
Obligations, shall be withdrawn or used for any purpose other than, and shall be
held in trust for, the payment of the principal of and premium, if any, and
interest, if any, on the Securities or portions of principal amount thereof in
respect of which such deposit was made, all subject, however, to the provisions
of Section 603; provided, however, that, so long as there shall not have
occurred and be continuing an Event of Default any cash received from such
principal or interest payments on such Government Obligations, if not then
needed for such purpose, shall, to the extent practicable, be invested in
Government Obligations of the type described in clause (b) in the first
paragraph of Section 701 maturing at such times and in such amounts as shall be
sufficient to pay when due the principal of and premium, if any, and interest,
if any, due and to become due on such Securities or portions thereof on and
prior to the Maturity thereof, and interest earned from such reinvestment shall
be paid over to the Company as received, free and clear of any trust, lien or
pledge under this Indenture except the lien provided by Section 907; and
provided, further, that, so long as there shall not have occurred and be
continuing an Event of Default, any moneys held in accordance with this Section
on the Maturity of all such Securities in excess of the amount required to pay
the principal of and premium, if any, and interest, if any, then due on such
Securities shall be paid over to the Company free and clear of any trust, lien
or pledge under this Indenture except the lien provided by Section 907; and
provided, further, that if an Event of Default shall have occurred and be
continuing, moneys to be paid over to the Company pursuant to this Section shall
be held until such Event of Default shall have been waived or cured.
ARTICLE EIGHT
EVENTS OF DEFAULT; REMEDIES
SECTION 801. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events:
(a) failure to pay interest, if any, on any Security of such series
within 30 days after the same becomes due and payable (whether or not payment
is prohibited by the provisions of Article Fifteen hereof); provided,
however, that a valid extension of the interest payment period by the Company
as contemplated in Section 311 of this Indenture shall not constitute a
failure to pay interest for this purpose; or
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(b) failure to pay the principal of or premium, if any, on any Security
of such series at its Maturity (whether or not payment is prohibited by the
provisions of Article Fifteen hereof); or
(c) failure to perform or breach of any covenant or warranty of the
Company in this Indenture (other than a covenant or warranty a default in the
performance of which or breach of which is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of Securities other
than such series) for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee, or to the
Company and the Trustee by the Holders of at least 10% in principal amount of
the Outstanding Securities of such series, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder, unless the Trustee, or the Trustee
and the Holders of a principal amount of Securities of such series not less
than the principal amount of Securities the Holders of which gave such
notice, as the case may be, shall agree in writing to an extension of such
period prior to its expiration; provided, however, that the Trustee, or the
Trustee and the Holders of such principal amount of Securities of such
series, as the case may be, shall be deemed to have agreed to an extension of
such period if corrective action is initiated by the Company within such
period and is being diligently pursued; or
(d) the entry by a court having jurisdiction in the premises of (1) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (2) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition by
one or more Persons other than the Company seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company under
any applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official for the
Company or for any substantial part of its property, or ordering the winding
up or liquidation of its affairs, and any such decree or order for relief or
any such other decree or order shall have remained unstayed and in effect for
a period of 90 consecutive days; or
(e) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization
or other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Company in a case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State law,
or the consent by it to the filing of such petition or to the appointment of
or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of any substantial part of
its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the authorization of such action by
the Board of Directors; or
(f) any other Event of Default specified with respect to Securities of
such series.
SECTION 802. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default due to the default in payment of principal of, or
interest on, any series of Securities or due to the default in the performance
or breach of any other covenant or warranty of the
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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 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
and upon any such declaration such principal amount (or specified amount) of and
the accrued 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).
At any time after such a declaration of acceleration with respect to
Securities of any series shall have been made and before a judgment or decree
for payment of the money due shall have been obtained by the Trustee as
hereinafter in this Article provided, the Event or Events of Default giving rise
to such declaration of acceleration shall, without further act, be deemed to
have been waived, and such declaration and its consequences shall, without
further act, be deemed to have been rescinded and annulled, if
(a) the Company shall have paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue interest on all Securities of such series;
(ii) the principal of and premium, if any, on any Securities of
such series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed
therefor in such Securities;
(iii) to the extent that payment of such interest is lawful,
interest upon overdue interest, if any, at the rate or rates prescribed
therefor in such Securities;
(iv) all amounts due to the Trustee under Section 907;
and
(b) any other Event or Events of Default with respect to Securities of
such series, other than the nonpayment of the principal of Securities of such
series which shall have become due solely by such declaration of
acceleration, shall have been cured or waived as provided in Section 813.
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No such rescission shall affect any subsequent Event of Default or impair any
right consequent thereon.
SECTION 803. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
If an Event of Default described in clause (a) or (b) of Section 801
shall have occurred and be continuing, the Company shall, upon demand of the
Trustee, pay to it, for the benefit of the Holders of the Securities of the
series with respect to which such Event of Default shall have occurred, the
whole amount then due and payable on such Securities for principal and premium,
if any, and interest, if any, and, to the extent permitted by law, interest on
premium, if any, and on any overdue principal and interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover any amounts due to the Trustee under
Section 907.
If the Company shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to Securities of any series shall
have occurred and be continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest, if any, owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
amounts due to the Trustee under Section 907) and of the Holders allowed in
such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the
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event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amounts due it under Section 907.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 805. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders in respect of which such judgment has been
recovered.
SECTION 806. APPLICATION OF MONEY COLLECTED.
Subject to the provisions of Article Fifteen, any money collected by the
Trustee pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal or premium, if any, or interest, if any, upon
presentation of the Securities in respect of which or for the benefit of which
such money shall have been collected and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 907;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities for principal of and premium, if any, and interest, if any, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal, premium, if any, and
interest, if any, respectively; and
THIRD: To the payment of the remainder, if any, to the Company or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
SECTION 807. LIMITATION ON SUITS.
No Holder shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless:
(a) such Holder shall have previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of
such series;
(b) the Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of all series in respect of which an
Event of Default shall have occurred and be continuing,
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considered as one class, shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders shall have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute any such proceeding;
and
(e) no direction inconsistent with such written request shall have been
given to the Trustee during such 60-day period by the Holders of a majority
in aggregate principal amount of the Outstanding Securities of all series in
respect of which an Event of Default shall have occurred and be continuing,
considered as one class;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 808. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and premium, if any, and (subject to Section 307 and
311) interest, if any, on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder. Any holder of
related Preferred Securities shall have the right to institute suit for the
enforcement of any such payment to such holder with respect to Securities
relating to such Preferred Securities having a principal amount equal to the
aggregate liquidation preference amount of the related Preferred Securities held
by such holder.
SECTION 809. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee or to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company, and Trustee and such
Holder shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and such Holder
shall continue as though no such proceeding had been instituted.
SECTION 810. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of Section 306, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or
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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. The Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such
direction. Before proceeding to exercise any right or power hereunder at the
direction of such Holders, the Trustee shall be entitled to receive from such
Holders reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with any such direction.
SECTION 813. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default:
(a) in the payment of the principal of or premium, if any, or interest,
if any, on any Security of such series, or
(b) in respect of a covenant or provision hereof which under Section
1202 cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected;
provided, however, that so long as a Trust holds the Securities of any series,
such Trust may not waive any past default without the consent of at least a
majority in aggregate liquidation preference of the outstanding Preferred
Securities issued by such Trust affected, obtained as provided in the Trust
Agreement pertaining to such Trust.
Upon any such waiver, such default shall cease to exist, and any and all
Events of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
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SECTION 814. UNDERTAKING FOR COSTS.
The Company and the Trustee agree, and each Holder by his acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; provided,
however, that the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in aggregate principal amount of the Outstanding Securities of all
series in respect of which such suit may be brought, considered as one class, or
to any suit instituted by any Holder for the enforcement of the payment of the
principal of or premium, if any, or interest, if any, on any Security on or
after the Stated Maturity or Maturities expressed in such Security (or, in the
case of redemption, on or after the Redemption Date).
SECTION 815. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE NINE
THE TRUSTEE
SECTION 901. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; provided, however, that, in the case of any such certificates
or opinions which by any provisions hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture.
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(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct
of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct except that
(i) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error or judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of Holders pursuant to Section 812 relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Securities of such
series.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 902. NOTICE OF DEFAULTS.
The Trustee shall give notice of any default hereunder with respect to
the Securities of any series to the Holders of Securities of such series in the
manner and to the extent required to do so by the Trust Indenture Act, unless
such default shall have been cured or waived; provided, however, that in the
case of any default of the character specified in Section 801(c), no such notice
to Holders shall be given until at least 45 days after the occurrence thereof.
For the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time, or both, would become, an Event of Default.
SECTION 903. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 901 and to the applicable
provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting in good faith upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document
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reasonably believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, or as otherwise
expressly provided herein, and any resolution of the Board of Directors may
be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any Holder pursuant to this Indenture, unless such Holder shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall (subject to applicable legal requirements) be entitled to examine,
during normal business hours, the books, records and premises of the Company,
personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be charged with knowledge of any default or
Event of Default, as the case may be, with respect to the Securities of any
series for which it is acting as Trustee unless either (i) a Responsible
Officer of the Trustee shall have actual knowledge of the default or Event of
Default, as the case may be, or (ii) written notice of such default or Event
of Default, as the case may be, shall have been given to the Trustee by the
Company, any other obligor on such Securities or by any Holder of such
Securities.
SECTION 904. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. Neither
the Trustee nor any
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Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 905. MAY HOLD SECURITIES.
Each of the Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and (subject to
Sections 908 and 913) may otherwise deal with the Company with the same rights
it would have if it were not the Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 906. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated from
other funds, except to the extent required by law. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
expressly provided herein or otherwise agreed with, and for the sole benefit of,
the Company.
SECTION 907. COMPENSATION AND REIMBURSEMENT.
The Company shall
(a) pay to the Trustee from time to time reasonable compensation 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, reimburse the
Trustee upon its request for all reasonable expenses (including any costs of
collection), disbursements and advances reasonably incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except to the extent that any such expense, disbursement or advance
may be attributable to the Trustee's negligence, wilful misconduct or bad
faith; and
(c) indemnify the Trustee for, and hold it harmless from and against,
any and all losses, liabilities, demands, claims, causes of action or
expenses (including reasonable attorneys' fees and expenses) 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, demand, claim, cause of action or expense may be attributable to
its negligence, wilful misconduct or bad faith. At the option of the Trustee,
the Company shall assume the defense of the Trustee with counsel acceptable
to the Trustee.
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;
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provided, however, that the negligence, wilful misconduct or bad faith of any
Trustee hereunder shall not affect the rights of any other Trustee hereunder.
In addition to the rights provided to the Trustee pursuant to the
provisions of the immediately preceding paragraph of this Section 907, when the
Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 801(d) or Section 801(e), the expenses (including
the reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
applicable Federal or State bankruptcy, insolvency or other similar law.
The provisions of this Section 907 shall survive the termination for any
reason of this Indenture.
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, under any Guarantee, or as trustee under the Junior Subordinated
Indenture dated as of October 1, 1996, the Amended and Restated Trust Agreement
dated as of October 1, 1996 and the Guarantee Agreement dated as of October 1,
1996, relating to the Company's 8.25% Junior Subordinated Deferrable Interest
Debentures. Each Trust Agreement and each Guarantee 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 or other Person
permitted by the Commission authorized 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 corpora tion publishes reports of condition at least
annually, pursuant to law or to the requirements of such
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supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 910. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 911.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If
the instrument of acceptance by a successor Trustee required by Section 911
shall not have been delivered to the Trustee within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered to the Trustee
and to the Company; provided, however, that so long as any Preferred
Securities remain outstanding, the Trust which issued such Preferred
Securities shall not execute any Act to remove the Trustee without the
consent of the holders of a majority in aggregate liquidation preference of
Preferred Securities issued by such Trust outstanding, obtained as provided
in the Trust Agreement pertaining to such Trust.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 908 after written
request therefor by the Company or by any Holder who has been a bona
fide Holder for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 909 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (x) the Company by a Board Resolution may remove the
Trustee with respect to all Securities or (y) subject to Section 814, any Holder
who has been a bona fide Holder for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent juris
diction for the removal of the Trustee with respect to all Securities and the
appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause
(other than as contemplated in clause (y) in subsection (d) of this Section),
with respect to the Securities of one or more series, the Company, by
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a Board Resolution, shall promptly appoint a successor Trustee or Trustees
with respect to the Securities of that or those series (it being understood
that any such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any time there
shall be only one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of Section 911.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 911, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in
the manner required by Section 911, any Holder who has been a bona fide
Holder of a Security of such series for at least six months may, on behalf of
itself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(f) So long as no event which is, or after notice or lapse of time, or
both, would become, an Event of Default shall have occurred and be
continuing, and except with respect to a Trustee appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
pursuant to subsection (e) of this Section, if the Company shall have
delivered to the Trustee (i) a Board Resolution appointing a successor
Trustee, effective as of a date specified therein, and (ii) an instrument of
acceptance of such appointment, effective as of such date, by such successor
Trustee in accordance with Section 911, the Trustee shall be deemed to have
resigned as contemplated in subsection (b) of this Section, the successor
Trustee shall be deemed to have been appointed by the Company pursuant to
subsection (e) of this Section and such appointment shall be deemed to have
been accepted as contemplated in Section 911, all as of such date, and all
other provisions of this Section and Section 911 shall be applicable to such
resignation, appointment and acceptance except to the extent inconsistent
with this subsection (f).
(g) The Company (or, should the Company fail so to act promptly, the
successor Trustee at the expense of the Company) shall give notice of each
resignation and each removal of the Trustee with respect to the Securities of
any series and each appointment of a successor Trustee with respect to the
Securities of any series by mailing written notice of such event by first-
class mail, postage prepaid, to all Holders of Securities of such series as
their names and addresses appear in the Security Register. Each notice shall
include the name of the successor Trustee with respect to the Securities of
such series and the address of its corporate trust office.
SECTION 911. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of all series, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee; provided, however that on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of all sums owed
to it, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the
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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 provi sions 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 pro vided therein and each such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; provided, however that on
request of the Company or any successor Trustee, such retiring Trustee, upon
payment of all sums owed to it, shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any instruments which fully vest in and confirm to such successor
Trustee all such rights, powers and trusts referred to in subsection (a) or
(b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 912. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation or other Person into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation or other
Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or other Person succeeding to all
or substantially all the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation or other Person
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.
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SECTION 913. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If the Trustee shall be or become a creditor of the Company or any other
obligor upon the Securities (other than by reason of a relationship described in
Section 311(b) of the Trust Indenture Act), the Trustee shall be subject to any
and all applicable provisions of the Trust Indenture Act regarding the
collection of claims against the Company or such other obligor. For purposes of
Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after delivery
of the goods or securities in currency or in checks or other orders drawn
upon banks or bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred by the
Company for the purpose of financing the purchase, processing, manufacturing,
shipment, storage or sale of goods, wares or merchandise and which is secured
by documents evidencing title to, possession of, or a lien upon, the goods,
wares or merchandise or the receivables or proceeds arising from the sale of
the goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with the
creation of the creditor relationship with the Company arising from the
making, drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation.
SECTION 914. CO-TRUSTEES AND SEPARATE TRUSTEES.
At any time or times, for the purpose of meeting the legal requirements
of any applicable jurisdiction, the Company and the Trustee shall have power to
appoint, and, upon the written request of the Trustee or of the Holders of at
least 25% in principal amount of the Securities then Outstanding, the Company
shall for such purpose join with the Trustee in the execution and delivery of
all instruments and agreements necessary or proper to appoint, one or more
Persons approved by the Trustee either to act as co-trustee, jointly with the
Trustee, or to act as separate trustee, in either case with such powers as may
be provided in the instrument of appointment, and to vest in such Person or
Persons, in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section. If the
Company does not join in such appointment within 15 days after the receipt by it
of a request so to do, or if an Event of Default shall have occurred and be
continuing, the Trustee alone shall have power to make such appointment.
Should any written instrument or instruments from the Company be
required by any co-trustee or separate trustee so appointed to more fully
confirm to such co-trustee or separate trustee such property, title, right or
power, any and all such instruments shall, on request, be executed, acknowledged
and delivered by the Company.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following conditions:
(a) the Securities shall be authenticated and delivered, and all
rights, powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised solely,
by the Trustee;
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(b) the rights, powers, duties and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed
either by the Trustee or by the Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such co-
trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Trustee
shall be incompetent or unqualified to perform such act, in which event such
rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee;
(c) the Trustee at any time, by an instrument in writing executed by
it, with the concurrence of the Company, may accept the resignation of or
remove any co-trustee or separate trustee appointed under this Section, and,
if an Event of Default shall have occurred and be continuing, the Trustee
shall have power to accept the resignation of, or remove, any such co-trustee
or separate trustee without the concurrence of the Company. Upon the written
request of the Trustee, the Company shall join with the Trustee in the
execution and delivery of all instruments and agreements necessary or proper
to effectuate such resignation or removal. A successor to any co-trustee or
separate trustee so resigned or removed may be appointed in the manner
provided in this Section;
(d) no co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Trustee, or any other such
trustee hereunder; and
(e) any Act of Holders delivered to the Trustee shall be deemed to have
been delivered to each such co-trustee and separate trustee.
SECTION 915. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with respect
to the Securities of one or more series, which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issuance and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 306, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States, any State or territory thereof or the District of Columbia, authorized
under such laws to act as 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.
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Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The Company 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
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series authenticated upon original issuance, the Trustee, if so requested by the
Company in writing (which writing need not comply with Section 102 and need not
be accompanied by an Opinion of Counsel), shall appoint, in accordance with this
Section and in accordance with such procedures as shall be acceptable to the
Trustee, an Authenticating Agent having an office in a Place of Payment
designated by the Company with respect to such series of Securities.
ARTICLE TEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 1001. LISTS OF HOLDERS.
Semiannually, not later than January 15 and July 15 in each year,
commencing January 15, 1999, and at such other times as the Trustee may request
in writing, the Company shall furnish or cause to be furnished to the Trustee
information as to the names and addresses of the Holders, and the Trustee shall
preserve such information and similar information received by it in any other
capacity and afford to the Holders access to information so preserved by it, all
to such extent, if any, and in such manner as shall be required by the Trust
Indenture Act; provided, however, that no such list need be furnished so long as
the Trustee shall be the Security Registrar.
SECTION 1002. REPORTS BY TRUSTEE.
(a) The Trustee shall transmit to the Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto. Such of those reports as are required to be transmitted by the Trustee
pursuant to Section 313(a) of the Trust Indenture Act shall be so transmitted
within 60 days after July 1 of each year, commencing July 1, 1999.
(b) A copy of each such report shall, at the time of such
transmission to the Holders, be filed by the Trustee with each stock exchange
upon which the Securities are listed, with the Commission and with the Company.
The Company shall notify the Trustee when any Securities shall have been listed
on any stock exchange.
SECTION 1003. REPORTS TO THE TRUSTEE. The Company shall provide to the Trustee
such documents, reports, compliance certificates and information as may be
required by Section 314 of the Trust Indenture Act in the form, in the manner
and at the times required thereby. The Company shall notify the Trustee of the
listing of any Securities on any securities exchange. Delivery of such reports,
information and documents by the Company to the Trustee is for informational
purposes only and the Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company's compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely exclusively
on certificates of officers.
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ARTICLE ELEVEN
CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER
SECTION 1101. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other
corporation, or convey or otherwise transfer or lease its properties and assets
substantially as an entirety to any Person, unless
(a) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company substantially as
an entirety shall be a Person organized and validly existing under the laws
of the United States, any State thereof or the District of Columbia, and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and premium, if any, and interest, if
any, on all Outstanding Securities and the performance of every covenant of
this Indenture on the part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, or other transfer or lease and such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transactions have been
complied with.
SECTION 1102. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation by the Company with or merger by the Company
into any other corporation or any conveyance, or other transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 1101, the successor corporation formed by such consolidation or
into which the Company is merged or the Person to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities Outstanding hereunder.
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ARTICLE TWELVE
SUPPLEMENTAL INDENTURES
SECTION 1201. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Trustee, at
any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities, all as provided in Article Eleven; or
(b) to add one or more covenants of the Company or other provisions
for the benefit of all Holders or for the benefit of the Holders of, or to
remain in effect only so long as there shall be Outstanding, Securities of
one or more specified series, or to surrender any right or power herein
conferred upon the Company; or
(c) to add any additional Events of Default with respect to all or
any series of Securities Outstanding hereunder; or
(d) to change or eliminate any provision of this Indenture or to add
any new provision to this Indenture; provided, however, that if such
change, elimination or addition shall adversely affect the interests of the
Holders of Securities of any series Outstanding on the date of such
indenture supplemental hereto in any material respect, such change,
elimination or addition shall become effective with respect to such series
only pursuant to the provisions of Section 1202 hereof or when no Security
of such series remains Outstanding; or
(e) to provide collateral security for all but not part of the
Securities; or
(f) to establish the form or terms of Securities of any series as
contemplated by Sections 201 and 301; or
(g) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing interest, if any,
thereon and for the procedures for the registration, exchange and
replacement thereof and for the giving of notice to, and the solicitation
of the vote or consent of, the holders thereof, and for any and all other
matters incidental thereto; or
(h) to evidence and provide for the acceptance of appointment
hereunder by a separate or successor Trustee with respect to the Securities
of one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 911(b); or
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(i) to provide for the procedures required to permit the Company to
utilize, at its option, a noncertificated system of registration for all,
or any series of, the Securities; or
(j) to change any place or places where (i) the principal of and
premium, if any, and interest, if any, on all or any series of Securities
shall be payable, (ii) all or any series of Securities may be surrendered
for registration of transfer, (iii) all or any series of Securities may be
surrendered for exchange and (iv) notices and demands to or upon the
Company in respect of all or any series of Securities and this Indenture
may be served; or
(k) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other changes to the provisions hereof or to add
other provisions with respect to matters or questions arising under this
Indenture, provided that such other changes or additions shall not
adversely affect the interests of the Holders of Securities of any series
in any material respect.
Without limiting the generality of the foregoing, if the Trust
Indenture Act as in effect at the date of the execution and delivery of this
Indenture or at any time thereafter shall be amended and
(x) if any such amendment shall require one or more changes to
any provisions hereof or the inclusion herein of any additional
provisions, or shall by operation of law be deemed to effect such
changes or incorporate such provisions by reference or otherwise, this
Indenture shall be deemed to have been amended so as to conform to
such amendment to the Trust Indenture Act, and the Company and the
Trustee may, without the consent of any Holders, enter into an
indenture supplemental hereto to effect or evidence such changes or
additional provisions; or
(y) if any such amendment shall permit one or more changes to,
or the elimination of, any provisions hereof which, at the date of the
execution and delivery hereof or at any time thereafter, are required
by the Trust Indenture Act to be contained herein, this Indenture
shall be deemed to have been amended to effect such changes or
elimination, and the Company and the Trustee may, without the consent
of any Holders, enter into an indenture supplemental hereto to
evidence such amendment hereof.
SECTION 1202. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under this Indenture, considered as one class, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or modifying
in any manner the rights of the Holders of Securities of such series under the
Indenture; provided, however,
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that if there shall be Securities of more than one series Outstanding hereunder
and if a proposed supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more, but less than all, of such series, then
the consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and provided, further, that no such supplemental
indenture shall:
(a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on (except as provided in Section
311 hereof), any Security, or reduce the principal amount thereof or the
rate of interest thereon (or the amount of any installment of interest
thereon) or change the method of calculating such rate or reduce any
premium payable upon the redemption thereof, or change the coin or currency
(or other property), in which any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity of any
Security (or, in the case of redemption, on or after the Redemption Date),
without, in any such case, the consent of the Holder of such Security, or
(b) reduce the percentage in principal amount of the Outstanding
Securities of any series (or, if applicable, in liquidation preference of
any series of Preferred Securities), the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the Holders
of which is required for any waiver of compliance with any provision of
this Indenture or of any default hereunder and its consequences, or reduce
the requirements of Section 1304 for quorum or voting, without, in any such
case, the consent of the Holders of each Outstanding Security of such
series, or
(c) modify any of the provisions of this Section, Section 607 or
Section 813 with respect to the Securities of any series, except to
increase the percentages in principal amount referred to in this Section or
such other Sections or to provide that other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; provided, however, that this clause
shall not be deemed to require the consent of any Holder with respect to
changes in the references to "the Trustee" and concomitant changes in this
Section, or the deletion of this proviso, in accordance with the
requirements of Sections 911(b) and 1201(h).
Notwithstanding the foregoing, so long as any of the Preferred Securities remain
outstanding, the Trustee may not consent to a supplemental indenture under this
Section 1202 without the prior consent, obtained as provided in a Trust
Agreement pertaining to a Trust which issued such Preferred Securities, of the
holders of not less than a majority in aggregate liquidation preference of all
Preferred Securities issued by such Trust affected, considered as one class, or,
in the case of changes described in clauses (a), (b) and (c) above, 100% in
aggregate liquidation preference of all such Preferred Securities then
outstanding which would be affected thereby, considered as one class. A
supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be
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deemed not to affect the rights under this Indenture of the Holders of
Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof. A waiver by a
Holder of such Holder's right to consent under this Section shall be deemed to
be a consent of such Holder.
SECTION 1203. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 901) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, immunities or liabilities under this Indenture or
otherwise.
SECTION 1204. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby. Any supplemental indenture permitted by this Article
may restate this Indenture in its entirety, and, upon the execution and delivery
thereof, any such restatement shall supersede this Indenture as theretofore in
effect for all purposes.
SECTION 1205. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 1206. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
SECTION 1207. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE.
If the terms of any particular series of Securities shall have been
established in a Board Resolution or an Officer's Certificate as contemplated by
Section 301, and not in an indenture supplemental hereto, additions to, changes
in or the elimination of any of such
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terms may be effected by means of a supplemental Board Resolution or Officer's
Certificate, as the case may be, delivered to, and accepted in writing by, the
Trustee; provided, however, that such supplemental Board Resolution or Officer's
Certificate shall not be accepted by the Trustee or otherwise be effective
unless all conditions set forth in this Indenture which would be required to be
satisfied if such additions, changes or elimination were contained in a
supplemental indenture shall have been appropriately satisfied. Upon the
acceptance thereof by the Trustee, any such supplemental Board Resolution or
Officer's Certificate shall be deemed to be a "supplemental indenture" for
purposes of Section 1204 and 1206.
ARTICLE THIRTEEN
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities of one or more, or all, series may
be called at any time and from time to time pursuant to this Article to make,
give or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be made, given or taken by
Holders of Securities of such series.
SECTION 1302. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of
Securities of one or more, or all, series for any purpose specified in
Section 1301, to be held at such time and at such place in the Borough of
Manhattan, The City of New York, as the Trustee shall determine, or, with
the approval of the Company, at any other place. Notice of every such
meeting, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 106, not less than 21 nor more
than 180 days prior to the date fixed for the meeting.
(b) If the Trustee shall have been requested to call a meeting of the
Holders of Securities of one or more, or all, series by the Company or by
the Holders of 33% in aggregate principal amount of all of such series,
considered as one class, for any purpose specified in Section 1301, by
written request setting forth in reasonable detail the action proposed to
be taken at the meeting, and the Trustee shall not have given the notice of
such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then
the Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York, or in such other place as shall
be determined or approved by the Company, for such meeting and may call
such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
(c) Any meeting of Holders of Securities of one or more, or all,
series shall be valid without notice if the Holders of all Outstanding
Securities of such series are present in person or by proxy and if
representatives of the Company and the Trustee
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are present, or if notice is waived in writing before or after the meeting
by the Holders of all Outstanding Securities of such series, or by such of
them as are not present at the meeting in person or by proxy, and by the
Company and the Trustee.
SECTION 1303. PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of Securities of one
or more, or all, series a Person shall be (a) a Holder of one or more
Outstanding Securities of such series, or (b) a Person appointed by an
instrument in writing as proxy for a Holder or Holders of one or more
Outstanding Securities of such series by such Holder or Holders. The only
Persons who shall be entitled to attend any meeting of Holders of Securities of
any series shall be the Persons entitled to vote at such meeting and their
counsel, any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 1304. QUORUM; ACTION.
The Persons entitled to vote a majority in aggregate principal amount
of the Outstanding Securities of the series with respect to which a meeting
shall have been called as hereinbefore provided, considered as one class, shall
constitute a quorum for a meeting of Holders of Securities of such series;
provided, however, that if any action is to be taken at such meeting which this
Indenture expressly provides may be taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of the
Outstanding Securities of such series, considered as one class, the Persons
entitled to vote such specified percentage in principal amount of the
Outstanding Securities of such series, considered as one class, shall constitute
a quorum. In the absence of a quorum within one hour of the time appointed for
any such meeting, the meeting shall, if convened at the request of Holders of
Securities of such series, be dissolved. In any other case the meeting may be
adjourned for such period as may be determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at any
such adjourned meeting, such adjourned meeting may be further adjourned for such
period as may be determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Except as provided by Section 1305(e),
notice of the reconvening of any meeting adjourned for more than 30 days shall
be given as provided in Section 1302(a) not less than 10 days prior to the date
on which the meeting is scheduled to be reconvened. Notice of the reconvening
of an adjourned meeting shall state expressly the percentage, as provided above,
of the principal amount of the Outstanding Securities of such series which shall
constitute a quorum.
Except as limited by Section 1202, any resolution presented to a
meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in aggregate principal amount of the Outstanding Securities of the
series with respect to which such meeting shall have been called, considered as
one class; provided, however, that, except as so limited, any resolution with
respect to any action which this Indenture expressly provides may be taken by
the Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of such series, considered as one
class, may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in principal amount of the Outstanding Securities
of such series, considered as one class.
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Any resolution passed or decision taken at any meeting of Holders of
Securities duly held in accordance with this Section shall be binding on all the
Holders of Securities of the series with respect to which such meeting shall
have been held, whether or not present or represented at the meeting.
SECTION 1305. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING RIGHTS;
CONDUCT AND ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Holders of Securities may be in person
or by proxy; and, to the extent permitted by law, any such proxy shall
remain in effect and be binding upon any future Holder of the Securities
with respect to which it was given unless and until specifically revoked by
the Holder or future Holder of such Securities before being voted.
(b) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities in regard to proof of the holding of
such Securities and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it
shall deem appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Securities shall be proved in the manner
specified in Section 104 and the appointment of any proxy shall be proved
in the manner specified in Section 104. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be
presumed valid and genuine without the proof specified in Section 104 or
other proof.
(c) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Holders as provided in Section 1302(b), in
which case the Company or the Holders of Securities of the series calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting
shall be elected by vote of the Persons entitled to vote a majority in
aggregate principal amount of the Outstanding Securities of all series
represented at the meeting, considered as one class.
(d) At any meeting each Holder or proxy shall be entitled to one vote
for each $1 principal amount of Securities held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Security challenged as not Outstanding and ruled by the
chairman of the meeting to be not Outstanding. The chairman of the meeting
shall have no right to vote, except as a Holder of a Security or proxy.
(e) Any meeting duly called pursuant to Section 1302 at which a
quorum is present may be adjourned from time to time by Persons entitled to
vote a majority in aggregate principal amount of the Outstanding Securities
of all series represented at the meeting, considered as one class; and the
meeting may be held as so adjourned without further notice.
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SECTION 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders shall
be by written ballots on which shall be subscribed the signatures of the Holders
or of their representatives by proxy and the principal amounts and serial
numbers of the Outstanding Securities, of the series with respect to which the
meeting shall have been called, held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports of all
votes cast at the meeting. A record of the proceedings of each meeting of
Holders shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1302 and, if
applicable, Section 1304. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
SECTION 1307. ACTION WITHOUT MEETING.
In lieu of a vote of Holders at a meeting as hereinbefore contemplated
in this Article, any request, demand, authorization, direction, notice, consent,
waiver or other action may be made, given or taken by Holders by written
instruments as provided in Section 104.
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 1401. LIABILITY SOLELY CORPORATE.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest, if any, on any Securities, or any part thereof, or
for any claim based thereon or otherwise in respect thereof, or of the
indebtedness represented thereby, or upon any obligation, covenant or agreement
under this Indenture, against any incorporator, stockholder, officer or
director, as such, past, present or future of the Company or of any predecessor
or successor corporation (either directly or through the Company or a
predecessor or successor corporation), whether by virtue of any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and under stood 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
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waived and released as a condition of, and as part of the consideration for, the
execution of this Indenture and the issuance of the Securities.
ARTICLE FIFTEEN
SUBORDINATION OF SECURITIES
SECTION 1501. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company, for itself, its successors and assigns, covenants and
agrees, and each Holder of the Securities of each series, by its acceptance
thereof, likewise covenants and agrees, that the payment of the principal of and
premium, if any, and interest, if any, on each and all of the Securities is
hereby expressly subordinated and subject to the extent and in the manner set
forth in this Article, in right of payment to the prior payment in full of all
Senior Indebtedness.
Each Holder of the Securities of each series, by its acceptance
thereof, authorizes and directs the Trustee on its behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article, and appoints the Trustee its attorney-in-fact for any and all such
purposes.
SECTION 1502. PAYMENT OVER OF PROCEEDS OF SECURITIES.
In the event (a) of any insolvency or bankruptcy proceedings or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Company or a substantial part of its property, or of any
proceedings for liquidation, dissolution or other winding up of the Company,
whether or not involving insolvency or bankruptcy, or (b) subject to the
provisions of Section 1503, that (i) a default shall have occurred with respect
to the payment of principal of or interest on or other monetary amounts due and
payable on any Senior Indebtedness, or (ii) there shall have occurred a default
(other than a default in the payment of principal or interest or other monetary
amounts due and payable) in respect of any Senior Indebtedness, as defined
therein or in the instrument under which the same is outstanding, permitting the
holder or holders thereof to accelerate the maturity thereof (with notice or
lapse of time, or both), and such default shall have continued beyond the period
of grace, if any, in respect thereof, and, in the cases of subclauses (i) and
(ii) of this clause (b), such default shall not have been cured or waived or
shall not have ceased to exist, or (c) that the principal of and accrued
interest on the Securities of any series shall have been declared due and
payable pursuant to Section 801 and such declaration shall not have been
rescinded and annulled as provided in Section 802, then:
(1) the holders of all Senior Indebtedness shall first be entitled
to receive payment of the full amount due thereon, or provision shall
be made for such payment in money or money's worth, before the Holders
of any of the Securities are entitled to receive a payment on account
of the principal of or interest on the indebtedness evidenced by the
Securities, including, without limitation, any payments made pursuant
to Articles Four and Five;
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(2) any payment by, or distribution of assets of, the Company of
any kind or character, whether in cash, property or securities, to
which any Holder or the Trustee would be entitled except for the
provisions of this Article, shall be paid or delivered by the person
making such payment or distribution, whether a trustee in bankruptcy,
a receiver or liquidating trustee or otherwise, directly to the
holders of such Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture
under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of such Senior Indebtedness held or
represented by each, to the extent necessary to make payment in full
of all Senior Indebtedness remaining unpaid after giving effect to any
concurrent payment or distribution (or provision therefor) to the
holders of such Senior Indebtedness, before any payment or
distribution is made to the Holders of the indebtedness evidenced by
the Securities or to the Trustee under this Indenture; and
(3) in the event that, notwithstanding the foregoing, any payment
by, or distribution of assets of, the Company of any kind or
character, whether in cash, property or securities, in respect of
principal of or interest on the Securities or in connection with any
repurchase by the Company of the Securities, shall be received by the
Trustee or any Holder before all Senior Indebtedness is paid in full,
or provision is made for such payment in money or money's worth, such
payment or distribution in respect of principal of or interest on the
Securities or in connection with any repurchase by the Company of the
Securities shall be paid over to the holders of such Senior
Indebtedness or their representative or representatives or to the
trustee or trustees under any indenture under which any instruments
evidencing any such Senior Indebtedness may have been issued, ratably
as aforesaid, for application to the payment of all Senior
Indebtedness remaining unpaid until all such Senior Indebtedness shall
have been paid in full, after giving effect to any concurrent payment
or distribution (or provision therefor) to the holders of such Senior
Indebtedness.
Notwithstanding the foregoing, at any time after the 123rd day
following the date of deposit of cash or Government Obligations pursuant to
Section 701 (provided all conditions set out in such Section shall have been
satisfied), the funds so deposited and any interest thereon will not be subject
to any rights of holders of Senior Indebtedness including, without limitation,
those arising under this Article Fifteen; provided that no event described in
clauses (d) and (e) of Section 801 with respect to the Company has occurred
during such 123-day period.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan or reorganization
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<PAGE>
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, (i) the Trustee under or pursuant to Section 907 or
(ii) any Creditor under or pursuant to Section 312.
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.
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<PAGE>
SECTION 1505. OBLIGATION OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of and interest on the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders and creditors of the Company
other than the holders of Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
Upon any payment or distribution of assets or securities of the
Company referred to in this Article, the Trustee and the Holders shall be
entitled to rely upon any order or decree of a court of competent jurisdiction
in which such dissolution, winding up, liquidation or reorganization proceedings
are pending for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon, and all other facts pertinent thereto or
to this Article.
SECTION 1506. PRIORITY OF SENIOR INDEBTEDNESS UPON MATURITY.
Upon the maturity of the principal of any Senior Indebtedness by lapse
of time, acceleration or otherwise, all matured principal of Senior Indebtedness
and interest and premium, if any, thereon shall first be paid in full before any
payment of principal or premium, if any, or interest, if any, is made upon the
Securities or before any Securities can be acquired by the Company or any
sinking fund payment is made with respect to the Securities (except that
required sinking fund payments may be reduced by Securities acquired before such
maturity of such Senior Indebtedness).
SECTION 1507. TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS.
The Trustee shall be entitled to all rights set forth in this Article
with respect to any Senior Indebtedness at any time held by it, to the same
extent as any other holder of Senior Indebtedness. Nothing in this Article shall
deprive the Trustee of any of its rights as such holder.
SECTION 1508. NOTICE TO TRUSTEE TO EFFECTUATE SUBORDINATION.
Notwithstanding the provisions of this Article or any other provision
of the Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of moneys
to or by the Trustee unless and until the Trustee shall have received written
notice thereof from the Company, from a Holder or from a holder of any Senior
Indebtedness or from any representative or representatives of such holder and,
prior to the receipt of any such written notice, the Trustee shall be entitled,
subject to Section 901, in all respects to assume that no such facts exist;
provided, however, that, if
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<PAGE>
prior to the fifth Business Day preceding the date upon which by the terms
hereof any such moneys may become payable for any purpose, or in the event of
the execution of an instrument pursuant to Section 702 acknowledging
satisfaction and discharge of this Indenture, then if prior to the second
Business Day preceding the date of such execution, the Trustee shall not have
received with respect to such moneys the notice provided for in this Section,
then, anything herein contained to the contrary notwithstanding, the Trustee
may, in its discretion, receive such moneys and/or apply the same to the purpose
for which they were received, and shall not be affected by any notice to the
contrary, which may be received by it on or after such date; provided, however,
that no such application shall affect the obligations under this Article of the
persons receiving such moneys from the Trustee.
SECTION 1509. MODIFICATION, EXTENSION, ETC. OF SENIOR INDEBTEDNESS.
The holders of Senior Indebtedness may, without affecting in any
manner the subordination of the payment of the principal of and premium, if any,
and interest, if any, on the Securities, at any time or from time to time and in
their absolute discretion, agree with the Company to change the manner, place or
terms of payment, change or extend the time of payment of, or renew or alter,
any Senior Indebtedness, or amend or supplement any instrument pursuant to which
any Senior Indebtedness is issued, or exercise or refrain from exercising any
other of their rights under the Senior Indebtedness including, without
limitation, the waiver of default thereunder, all without notice to or assent
from the Holders or the Trustee.
SECTION 1510. TRUSTEE HAS NO FIDUCIARY DUTY TO HOLDERS OF SENIOR INDEBTEDNESS.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and objectives as
are specifically set forth in this Indenture, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if it shall mistakenly pay over or deliver to the
Holders or the Company or any other Person, money or assets to which any holders
of Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
SECTION 1511. PAYING AGENTS OTHER THAN THE TRUSTEE.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article in addition to or in place of the Trustee; provided, however,
that Sections 1507, 1508 and 1510 shall not apply to the Company if it acts as
Paying Agent.
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<PAGE>
SECTION 1512. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS NOT IMPAIRED.
No right of any present or future holder of Senior Indebtedness to
enforce the subordination herein shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
SECTION 1513. EFFECT OF SUBORDINATION PROVISIONS; TERMINATION.
Notwithstanding anything contained herein to the contrary, other than
as provided in the immediately succeeding sentence, all the provisions of this
Indenture shall be subject to the provisions of this Article, so far as the same
may be applicable thereto.
Notwithstanding anything contained herein to the contrary, the
provisions of this Article Fifteen shall be of no further effect, and the
Securities shall no longer be subordinated in right of payment to the prior
payment of Senior Indebtedness, if the Company shall have delivered to the
Trustee a notice to such effect. Any such notice delivered by the Company shall
not be deemed to be a supplemental indenture for purposes of Article Twelve.
_________________________
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
ATLANTIC CITY ELECTRIC COMPANY
By:________________________________________
Senior Vice President and
Chief Financial Officer
THE BANK OF NEW YORK, Trustee
By:__________________________________________
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<PAGE>
Exhibit 4-D
GUARANTEE AGREEMENT
Between
Atlantic City Electric Company
(as Guarantor)
and
The Bank of New York
(as Trustee)
dated as of
October 1, 1998
<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>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS................................. 1
SECTION 1.01 Definitions..................................................... 1
ARTICLE II
TRUST INDENTURE ACT.............................. 3
SECTION 2.01 Conflict with Trust Indenture Act............................... 3
SECTION 2.02 Lists of Holders of Preferred Securities........................ 3
SECTION 2.03 Reports by the Guarantee Trustee................................ 4
SECTION 2.04 Periodic Reports to Guarantee Trustee........................... 4
SECTION 2.05 Evidence of Compliance with Conditions Precedent................ 4
SECTION 2.06 Events of Default; Waiver....................................... 4
SECTION 2.07 Event of Default; Notice........................................ 4
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE................. 5
SECTION 3.01 Powers and Duties of the Guarantee Trustee...................... 5
SECTION 3.02 Certain Rights of Guarantee Trustee............................. 6
SECTION 3.03 Not Responsible for Recitals or Issuance of Guarantee........... 8
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...................................................... 10
ARTICLE V
GUARANTEE.................................. 11
SECTION 5.01 Guarantee....................................................... 11
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 5.02 Waiver of Notice and Demand.................................... 11
SECTION 5.03 Obligations Not Affected....................................... 11
SECTION 5.04 Rights of Holders.............................................. 12
SECTION 5.05 Guarantee of Payment........................................... 13
SECTION 5.06 Subrogation.................................................... 13
SECTION 5.07 Independent Obligations........................................ 13
ARTICLE VI
SUBORDINATION............................... 13
SECTION 6.01 Subordination.................................................. 13
ARTICLE VII
TERMINATION................................ 13
SECTION 7.01 Termination.................................................... 13
ARTICLE VIII
MISCELLANEOUS............................... 14
SECTION 8.01 Successors and Assigns......................................... 14
SECTION 8.02 Amendments..................................................... 14
SECTION 8.03 Notices........................................................ 14
SECTION 8.04 Benefit........................................................ 15
SECTION 8.05 Interpretation................................................. 15
SECTION 8.06 Governing Law.................................................. 16
</TABLE>
ii
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of October
1, 1998, is executed and delivered by Atlantic City Electric Company, a New
Jersey corporation (the "Guarantor"), and The Bank of New York, a New York
banking corporation, 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 Atlantic Capital II, a Delaware statutory business trust
(the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of October 1, 1998, between the Company, as
Depositor, the Trustees of the Issuer named therein and the several Holders, as
defined therein, the Issuer is issuing as of the date hereof $50,000,000
aggregate liquidation amount of its % Trust Preferred Capital Securities (the
"Preferred Securities") and $1,546,400 aggregate liquidation amount of its
Common Securities (the "Common Securities" and, together with the Preferred
Securities, the "Securities") representing 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, together with the proceeds from the sale of the Common
Securities of the Issuer, are to be invested in $30,927,850 principal amount of
Debentures (as defined in the Trust Agreement); and
WHEREAS, as incentive for the Holders to purchase the Securities, the
Guarantor desires irrevocably and unconditionally to 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 by each Holder of
Securities, 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.
<PAGE>
"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 Securities, to the
extent not paid or made by or on behalf of the Issuer: (a) any accumulated and
unpaid Distributions that are required to be paid on such Securities but only if
and to the extent that the Property Trustee has available in the Payment Account
funds sufficient to make such payment, (b) the Redemption Price with respect to
the Securities called for redemption by the Issuer but only if and to the extent
that the Property Trustee has available in the Payment Account funds sufficient
to make such payment, (c) upon a voluntary or involuntary dissolution, winding-
up or termination of the Issuer (unless the Debentures are distributed to the
Holders of such Securities), the lesser of (i) the aggregate of the Liquidation
Amount and all accumulated and unpaid Distributions on the Securities to the
date of payment, and (ii) the amount of assets of the Issuer remaining available
for distribution to Holders in liquidation of the Issuer (the "Liquidation
Distribution").
"Guarantee Trustee" means The Bank of New York until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" shall mean any Person in whose name any Securities are
registered in the Securities Registrar; provided, however, that, in determining
whether the Holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indenture" means the Indenture dated as of October 1, 1998, between
the Guarantor (the "Debenture Issuer") and The Bank of New York, as trustee,
pursuant to which the Debentures are issued.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board, the President, a Vice President, the Treasurer or an Assistant
Treasurer of the Guarantor, and delivered to the Guarantee Trustee. Any
Officer's Certificate or Opinion of Counsel delivered with respect to compliance
with a condition or covenant provided for in this Guarantee Agreement shall
include:
(a) a statement that the officer signing such Officer's Certificate
or the counsel rendering such Opinion of Counsel has read the covenant or
condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer or such counsel in rendering the
Officer's Certificate or the Opinion of Counsel;
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<PAGE>
(c) a statement that such officer or counsel has made such
examination or investigation as, in such officer's or such counsel's
opinion, is necessary to enable such officer or counsel to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of such officer or
counsel, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Guarantor or an Affiliate of the Guarantor, or an employee
thereof, who shall be acceptable to the Guarantee Trustee.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any officer of the Guarantee Trustee assigned by the Guarantee Trustee to
administer its corporate trust matters.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Guarantee Agreement limits, qualifies or
conflicts with another provision hereof which is required or deemed to be
included in this Guarantee Agreement by, or is otherwise governed by, any of the
provisions of the Trust Indenture Act, such other provision shall control; and
if any provision hereof otherwise conflicts with the Trust Indenture Act, the
Trust Indenture Act shall control.
SECTION 2.02 LISTS OF HOLDERS OF PREFERRED SECURITIES.
(a) Semiannually, not later than January 15 and July 15 in each year,
commencing January 15, 1999, and at such other times as the Guarantee Trustee
may request in writing, the Guarantor shall furnish or cause to be furnished to
the Guarantee Trustee information as to the names and addresses of the Holders,
and the Guarantee Trustee shall preserve such information and similar
information received by it in any other capacity and afford to the Holders
access to information received by it in any other capacity and afford to the
Holders access to information so preserved by it, all to such extent, if any,
and in such manner as shall be required by the Trust Indenture Act.
-3-
<PAGE>
(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) of such Act) and Section 312(b) of the Trust Indenture Act.
SECTION 2.03 REPORTS BY THE GUARANTEE TRUSTEE. Not later than 60
days after July 1 of each year, commencing July 1, 1999, the Guarantee Trustee
shall provide to Holders such reports as are required by Section 313(a) of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313(a) of the Trust Indenture Act. The Guarantee Trustee shall also comply with
the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.04 PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor
shall provide to the Guarantee Trustee, the Commission and the Holders such
documents, reports, compliance certificates and information as may be required
by Section 314 of the Trust Indenture Act to be provided by the Guarantor
Trustee to such Persons in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act. The Guarantor shall provide to the
Guarantee Trustee the compliance certificate required by Section 314(a)(4) of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314(a)(4) of the Trust Indenture Act.
SECTION 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent provided for in this Guarantee Agreement as and to
the extent required by Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act may be given in the form of an Officer's
Certificate.
SECTION 2.06 EVENTS OF DEFAULT; WAIVER. The Holders of a majority in
liquidation amount of Outstanding Preferred Securities may, by vote, on behalf
of all of the Holders, waive any past Event of Default and its consequences.
Upon such waiver, any such Event of Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Guarantee Agreement, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.07 EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall give notice of any Event of Default
hereunder to the Holders in the manner and to the extent required to do so by
the Trust Indenture Act, unless such Event of Default shall have been cured or
waived.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice of such Event of Default.
-4-
<PAGE>
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 or waiving of all Events of Default that may have
occurred, shall undertake to perform such duties and 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), and is actually known to a Responsible Officer
of the Guarantee Trustee, 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 no
implied covenants or obligations shall be read into this
Guarantee Agreement against the Guarantee Trustee; and
-5-
<PAGE>
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Guarantee Trustee and conforming to the
requirements of this Guarantee Agreement; provided, however, that
in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Guarantee Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee or such
Responsible Officer was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority in
liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee, or exercising any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the Guarantee
Trustee shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under the
terms of this Guarantee Agreement or adequate indemnity against such
risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly provided, every provision of
this Guarantee Agreement relating to the conduct or affecting the liability of
or affording protection to the Trustee shall be subject to the provisions of
Sections 3.01(b) and 3.01(c).
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,
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debenture, note, other evidence of indebtedness or other paper or
document reasonably believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officer's Certificate;
(iii) whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon an Officer's Certificate which, upon
receipt of such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with counsel of its
choice, and the advice of such counsel or any Opinion of Counsel 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 under the last sentence of
Section 3.01(b) hereof 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,
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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 such
agent or attorney appointed with due care by it hereunder;
(viii) whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders of a majority in liquidation amount of
the Preferred Securities, (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;
(ix) the Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any tax or securities form) (or
any rerecording, refiling or reregistration thereof); and
(x) 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.
SECTION 3.03 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The recitals contained in this Guarantee Agreement shall be taken as
the statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee Agreement.
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ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted
by the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for
the purposes of this Section 4.01(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 4.01(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.03(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act. For the purposes of Section
310(b)(1) of the Trust Indenture Act and to the extent permitted thereby, the
Guarantee 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 Securities of any other series, or as trustee
under the Junior Subordinated Indenture dated as of October 1, 1996, the Amended
and Restated Trust Agreement dated as of October 1, 1996, the Guarantee
Agreement dated as of October 1, 1996 relating to the Company's 8.25% Junior
Subordinated Deferrable Interest Debentures, the Trust Agreement and the
Indenture.
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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 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 Agreement (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 trust created by, or the administration of, this Guarantee Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any its powers or
duties hereunder.
As security for the performance of the obligations of the Guarantor
under this Section, the Guarantee Trustee shall have a lien prior to the
Preferred Securities upon all the property and funds held or collected by the
Guarantee Trustee as such, except funds held in trust for the payment of
principal of, and premium (if any) or interest on, particular obligations of the
Guarantor under this Guarantee Agreement.
The provisions of this Section shall survive the termination of this
Guarantee Agreement.
SECTION 4.03 APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE
TRUSTEE.
(a) Subject to Section 4.03(b), unless an Event of Default shall have
occurred and be continuing, the Guarantee Trustee may be 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.
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(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 or on behalf of the Issuer),
as and when due, regardless of any defense, right of set-off or counterclaim
which the Issuer may have or assert. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
SECTION 5.02 WAIVER OF NOTICE AND DEMAND. The Guarantor hereby
waives notice of acceptance of this Guarantee Agreement and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 5.03 OBLIGATIONS NOT AFFECTED. The obligation of the
Guarantor to make the Guarantee Payments under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
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(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 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 Securities or the extension
of time for the performance of any other obligation under, arising out of,
or in connection with, the 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 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 Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.03 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Guarantee Trustee or 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) if an Event of Default has
occurred and is continuing, the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (c) the Holders of a majority in
liquidation amount of the Outstanding 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
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to enforce its rights under this Guarantee Agreement without first instituting a
legal proceeding against the Issuer, the Guarantee Trustee, 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 Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03.
ARTICLE VI
SUBORDINATION
SECTION 6.01 SUBORDINATION. This Guarantee Agreement will constitute
an unsecured obligation of the Guarantor and will rank subordinate and junior in
right of payment to all Senior Indebtedness of the Guarantor. Nothing in this
Section 6.01 shall apply to claims of, or payments to, the Guarantee Trustee
under or pursuant to Section 4.02.
If an Event of Default has occurred and is continuing under the Trust
Agreement, the rights of the holders of the Common Securities to receive
Guarantee Payments hereunder shall be subordinated to the rights of the Holders
of the Preferred Securities to receive Guarantee Payments under this Guarantee.
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ARTICLE VII
TERMINATION
SECTION 7.01 TERMINATION. Subject to Section 4.02 hereof, this
Guarantee Agreement shall terminate and be of no further force and effect upon:
(a) full payment of the Redemption Price of all Securities, (b) the distribution
of Debentures to Holders in exchange for all of the 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 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 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 written
approval of the Holders of not less than 66 2/3% of the aggregate liquidation
amount of all of the outstanding Securities. The provisions of Article VI of
the Trust Agreement concerning meetings of Holders shall apply to the giving of
such approval. Nothing herein contained shall be deemed to require that the
Guarantee Trustee enter into any amendment of this Guarantee Agreement.
SECTION 8.03 NOTICES. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Guarantee Trustee
and the Holders of the Preferred Securities:
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Atlantic City Electric 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 Guarantee Trustee and the Holders:
Atlantic Capital II
c/o Treasury Department,
Atlantic City Electric 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
Guarantor and the Holders of the Preferred Securities:
The Bank of New York
101 Barclay Street - 21W
New York, New York 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Administration
(d) if given to any Holder, at the address set forth on the
Securities Register.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 8.04 BENEFIT. This Guarantee Agreement is solely for the
benefit of the Holders and, subject to Section 3.01(a), is not separately
transferable from the Preferred Securities.
SECTION 8.05 INTERPRETATION. In this Guarantee Agreement, unless the
context otherwise requires:
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(a) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(b) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(c) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(d) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(e) a reference to the singular includes the plural and vice versa;
and
(f) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06 GOVERNING LAW. This Guarantee Agreement shall be
governed by and construed and interpreted in accordance with the laws of the
State of New York (without regard to conflict of laws principles).
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
Atlantic City Electric Company
By: __________________________________
Name: Barbara S. Graham
Title: Senior Vice President
and Chief Financial Officer
The Bank of New York,
as Guarantee Trustee
By: __________________________________
Name:
Title:
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Exhibit 4-E
ATLANTIC CITY ELECTRIC COMPANY
OFFICER'S CERTIFICATE
Barbara S. Graham , the Senior Vice President and Chief Financial Officer
of Atlantic City Electric Company (the "Company"), pursuant to the authority
granted in the Board Resolutions of the Company dated _____________, 1998, and
Sections 201 and 301 of the Indenture defined herein, does hereby certify to The
Bank of New York (the "Trustee"), as Trustee under the Indenture of the Company
(For Unsecured Subordinated Debt Securities relating to Trust Securities) dated
as of October 1, 1998 (the "Indenture") that:
1. The securities of the first series to be issued under the Indenture
shall be designated "_____% Junior Subordinated Debentures, Series I,
Due 2028" (the "Debentures of the First Series"). The Debentures of
the First Series are to be issued to The Bank of New York, as Property
Trustee (the "Property Trustee") of Atlantic Capital II, a Delaware
statutory business trust (the "Trust");
2. The Debentures of the First Series shall be limited in aggregate
principal amount to $30,927,850 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 ___________, 2028;
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 December 31, 1998. The amount of interest payable for any
such period will be computed on the basis of a 360-day year of twelve
30-day months and for any period shorter than a full month, on the
basis of the actual number of days elapsed in such period. Interest
on the Debentures of the First Series will accrue from, and including,
the date of original issuance and will accrue to, and including, the
first Interest Payment Date, and for each subsequent Interest Payment
Date will accrue from, and excluding, the last Interest Payment Date
through which interest has been paid or duly provided for to, and
including, such Interest Payment Date. The amount of interest payable
in respect of the Debentures of the First Series on December 31, 1998
will be computed on the basis of ___ days in a 360-day year. In the
event that any Interest Payment Date is not a Business Day, then
payment of interest payable on such date will be made on the next
succeeding day which is a Business Day, except that, if such Business
Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such Interest Payment Date;
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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 in the Securities Register on the close of
business on the fifteenth day (whether or not a Business Day)
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 Property
Trustee of 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 in the Securities Register on the close of business on a
Special Record Date to be fixed by the Trustee for the payment of such
Defaulted Interest, notice of which 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 as
such addresses appear in the Securities Register. Notices and demands
to or upon the Company in respect of the Debentures of the First
Series may be served at such office or agency of the Company in The
City of New York. The Corporate Trust Office of the Trustee will
initially be the agency of the Company for such service of notices and
demands and the Company hereby appoint the Trustee for such service;
provided, however, that the Company reserves the right to change, by
one or more Officer's Certificates any such office or agency or such
agent. 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
_________, 2003, 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 accrued interest, if any, to the redemption
date, upon not less than 30 nor more than 60 days' notice given as
provided in the Indenture.
The Debentures of the First Series will also be redeemable at any time
at the option of the Company upon the occurrence and during the
continuation of a Tax Event or an Investment Company Event in whole
but not in part, at a redemption price equal to 100% of the principal
amount of the Debentures of the First Series then Outstanding
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plus any accrued and unpaid interest, if any, to the redemption date,
upon not less than 30 nor more than 60 days' notice given as provided
in the Indenture. "Tax Event" means the receipt by the Trust of an
opinion of counsel (which may be counsel to the Company or an
affiliate but not an employee thereof and which must be acceptable to
the Property Trustee under the Trust Agreement) experienced in such
matters to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of
any administrative pronouncement, action or judicial decision
interpreting or applying such laws or regulations, which amendment or
change is effective or which pronouncement, action or decision is
announced on or after the date of issuance of the ____% Trust
Preferred Capital Securities of the Trust (the "Preferred
Securities"), there is more than an insubstantial risk that at such
time or within 90 days thereof (i) the Trust is, or will be, subject
to United States federal income tax with respect to income received or
accrued on the Debentures of the First Series, (ii) interest payable
by the Company on the Debentures of the First Series, is not, or will
not be fully deductible for United States federal income tax purposes,
or (iii) the Trust is, or will be, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
"Investment Company Event" means the occurrence of a change in law or
regulation or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or
regulatory authority to the effect that the Trust is or will be
considered an "investment company" that is required to be registered
under the Investment Company Act of 1940, as amended, which change in
law becomes effective on or after the date of original issuance of the
Preferred Securities;
The Debentures of the First Series will also be redeemable, in whole
but not in part, at the option of the Company upon the termination and
liquidation of the Trust pursuant to an order for the dissolution,
termination or liquidation of the Trust entered by a court of
competent jurisdiction at a redemption price equal to 100% of the
principal amount of the Debentures of the First Series then
Outstanding plus any accrued and unpaid interest, to the redemption
date;
The Company may not redeem less than all the Debentures of the First
Series Outstanding unless all accrued and unpaid interest has been
paid in full or duly provided for on all Debentures of the First
Series Outstanding under the Indenture for all quarterly interest
periods terminating on or prior to the date of redemption;
Any notice of redemption given with respect to the Debentures of the
First Series shall be unconditional;
8. Pursuant to Section 311 of the Indenture, the Company shall have the
right, at any time and from time to time during the term of the
Debentures of the First Series, to extend the interest payment period
to a period not exceeding 20 consecutive quarters (an "Extension
Period") provided that no Extension Period shall extend beyond the
Stated Maturity of principal of the Debentures of the First Series.
Prior to the end of an Extension Period, the Company may, and at the
end of the Extension Period the
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<PAGE>
Company shall, pay all interest accrued and unpaid (together with
interest thereon at the rate specified for the Debentures of the First
Series, compounded quarterly, to the extent permitted by applicable
law). During any such Extension Period, the Company shall not (i)
declare or pay any dividend or distribution on (other than a dividend
or distribution 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,
interest or premium, if any, on or repay, repurchase or redeem any
indebtedness that is pari passu with the Debentures of the First
Series (including other Securities issued under the Indenture), or
make any guarantee payments with respect to the foregoing. Prior to
the termination of any such Extension Period, the Company may further
extend the interest payment period, provided that such Extension
Period together with all such previous and further extensions thereof
shall not exceed 20 consecutive quarters at any one time or extend
beyond the Stated Maturity of the Debentures of the First Series.
Upon the termination of any such Extension Period and the payment of
all amounts then due, the Company may select a new Extension Period,
subject to the above requirements. No interest shall be due and
payable during an Extension Period, except at the end thereof. The
Company will give the Trust or other Holders and the Trustee notice of
its election of an Extension Period prior to the earlier of (i) one
Business Day prior to the record date for the interest payment which
would occur but for such election or (ii) the date the Company is
required to give notice to the New York Stock Exchange or other
applicable self-regulatory organization of the record date;
9. In the event that, at any time subsequent to the initial
authentication and delivery of the Debentures of the First Series, the
Debentures of the First Series are to be held by a securities
depositary, the Company may at such time establish the matters
contemplated in clause (r) in the second paragraph of Section 301 of
the Indenture in an Officer's Certificate supplemental to this
Certificate;
10. No service charge shall be made for the registration of transfer or
exchange of the Debentures of the First Series; provided, however,
that the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection
with the exchange or transfer;
11. The Debentures of the First Series shall have such other terms and
provisions as are provided in the form thereof set forth in Exhibit A
hereto, and shall be issued in substantially such form;
12. In the event that the Debentures of the First Series are distributed
to holders of the Preferred Securities as a result of the occurrence
of (i) a Tax Event or (ii) an Investment Company Event, the Company
will use its best efforts to list the Debentures of the First Series
on the New York Stock Exchange or on such other exchange as the
Preferred Securities are then listed;
-4-
<PAGE>
13. The undersigned has read all of the covenants and conditions contained
in the Indenture relating to the issuance of the Debentures of the
First Series and in respect of which this certificate is made and the
definitions in the Indenture relating thereto;
14. The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents
accompanying this certificate, and upon discussions by the undersigned
with officers and employees of the Company familiar with the matters
set forth herein;
15. In the opinion of the undersigned, he or she has made such examination
or investigation as is necessary to enable him or her to express an
informed opinion whether or not such covenants and conditions have
been complied with; and
16. In the opinion of the undersigned, such conditions and covenants and
conditions precedent, if any (including any covenants compliance with
which constitutes a condition precedent) to the authentication and
delivery of the Debentures of the First Series requested in the
accompanying Company Order have been complied with.
All capitalized terms used in this certificate which are not defined herein but
are defined in the Indenture shall have the meanings set forth in the Indenture.
-5-
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Officer's Certificate
this ____ day of October, 1998.
________________________________________
B.S. Graham,
Senior Vice President and
Chief Financial Officer
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<PAGE>
Exhibit A
NO. R-1
ATLANTIC CITY ELECTRIC COMPANY
_____% JUNIOR SUBORDINATED DEBENTURES, SERIES I,
DUE 2028
ATLANTIC CITY ELECTRIC COMPANY, a corporation duly organized and existing
under the laws of the State of New Jersey (herein referred to as the "Company,"
which term includes any successor Person under the Indenture), for value
received, hereby promises to pay to Atlantic Capital II, or registered assigns,
the principal sum of _____________________________ Dollars on ______________,
2028 and to pay interest on said principal sum, from and including, _________,
1998 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 December 31, 1998 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, _________, 1998
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, except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on the Interest Payment Date. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the Business Day 15
days preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in the Indenture referred to on the reverse hereof.
Payment of the principal of and premium, if any, and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in The City of New York, the State of New York in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that, at the option of
the Company, interest on this Security may be paid by check mailed to the
address of the person entitled thereto, as such address shall appear on the
Security Register.
<PAGE>
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.
ATLANTIC CITY ELECTRIC 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.
THE BANK OF NEW YORK, 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 October 1, 1998 (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 The Bank of
New York, 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 _________, 1998, 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 _________,
2003 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 and unpaid 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, 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 Atlantic Capital II, 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, or
as a result of any administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement, action or decision is announced on or after
the date of issuance of the _____% Trust Preferred Capital Securities of the
Trust (the "Preferred Securities"), there is more than an insubstantial risk
that at such time or within 90 days thereof (i) the Trust is, or will be,
subject to United States federal income tax with respect to income received or
accrued on the Securities, (ii) interest payable by the Company on the
Securities, is not, or will not be, fully deductible for United States federal
income tax purposes, or (iii) the Trust is, or will be, subject to more than a
de minimis amount of other taxes, duties or other governmental charges.
"Investment Company Event" means the occurrence of a change in law or regulation
or a change in interpretation or application of law or
-3-
<PAGE>
regulation by any legislative body, court, governmental agency or regulatory
authority to the effect that the Trust is or will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended, which change in law becomes effective on or after the date of
original issuance of the Preferred Securities.
The Securities of this series also will be redeemable, in whole but not in
part, at the option of the Company upon the termination and liquidation of the
Trust pursuant to an order for the dissolution, termination or liquidation of
the Trust entered by a court of competent jurisdiction at a redemption price
equal to 100% of the principal amount of the Securities of this series then
Outstanding plus any accrued and unpaid interest 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. Each Holder hereof, by his acceptance hereof, agrees to treat this
security as indebtedness for all United States tax purposes.
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
-4-
<PAGE>
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than a majority in aggregate
principal amount of the Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be continuing shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable indemnity,
and the Trustee shall not have received from the Holders of a majority in
aggregate principal amount of Securities of all series at the time Outstanding
in respect of which an Event of Default shall have occurred and be continuing a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
The Company has the right at any time and from time to time during the term
of the Securities of this series to extend the interest payment period to a
period not exceeding 20 consecutive quarters (an "Extension Period"). Prior to
the end of an Extension Period, the Company may, and at the end of such
Extension Period, the Company shall, pay all interest then accrued and unpaid
(together with interest thereon at the same rate as specified for the Securities
of this series, compounded quarterly, to the extent permitted by applicable
law). During any such Extension Period the Company shall not declare or pay any
dividend or distribution (other than a dividend or distribution in common stock
of the Company) on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock, or make any payment of principal on,
interest or premium if any, on or repay, repurchase or redeem any indebtedness
that is pari passu with the Securities of this series (including other
Securities issued under the Indenture), or make any guarantee payments with
respect to the foregoing. Prior to the termination of any such Extension Period,
the Company may further extend the interest payment period, provided that such
Extension Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters or extend beyond the Stated
Maturity of the Securities of this series. Upon the termination of any such
Extension Period and the payment of all amounts then due, the Company may select
a new Extension Period, subject to the above requirements. No interest during
the Extension Period, except at the end thereof, shall be due and payable. The
Company shall give the Holder of this Security notice of its selection of such
Extension Period as provided in or pursuant to the Indenture.
-5-
<PAGE>
The Securities of this series are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor and of authorized denominations,
as requested by the Holder surrendering the same.
As provided in the Indenture, the Company shall not be required to make
transfers or exchanges of Securities of this series for a period of 15 days
immediately preceding the date of the mailing of any notice of redemption of
such Securities and the Company shall not be required to make transfers or
exchanges of any Securities of this series so selected for redemption in whole
or in part (except the unredeemed portion of thereof).
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Security is registered as the absolute owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
-6-
<PAGE>
Exhibit 5A
[Letterhead of Simpson Thacher & Bartlett]
September 15, 1998
Atlantic City Electric Company
800 King Street
Wilmington, Delaware 19899
Ladies and Gentlemen:
We have acted as special counsel for Atlantic City Electric Company, a
New Jersey corporation (the "Company"), and Atlantic Capital II, a statutory
business trust created under the Business Trust Act of the State of Delaware
(the "Trust"), in connection with the preparation and filing with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), of a Registration Statement on Form S-3 (the "Registration
Statement"), relating to (i) the issuance by the Trust of its Trust Preferred
Capital Securities (the "Preferred Securities") and (ii) in connection
therewith, the deposit by the Company with the Trust as trust assets of its
Junior Subordinated Debentures, Series I (the "Subordinated Debentures").
Concurrently with the delivery of the Subordinated Debentures to the Trust, the
Company will make a cash contribution to the Trust, the proceeds of which will
be used by the Trust to purchase as trust assets additional Subordinated
Debentures. The Subordinated Debentures are to be issued under an Indenture
(the "Indenture"), to be entered into by and between the Company and The Bank of
New York, as trustee. The Preferred Securities will be guaranteed (the
"Guarantee") by the Company to the extent described in the Prospectus forming a
part of the Registration Statement.
We have examined originals or copies, certified otherwise identified to
our satisfaction of such corporate records, certificates of public officials and
other instruments and have made such other and further investigations, as we
have deemed relevant or necessary as a basis for the opinions hereinafter set
forth.
<PAGE>
-2-
Atlantic City Electric Company September 15, 1998
Based on the foregoing and subject to the qualifications and limitations
stated herein, we are of the opinion that :
1. Assuming that the Indenture and the Subordinated Debentures
have been duly authorized, when (i) the Registration Statement has
become effective under the Act, (ii) the Indenture has been duly
executed and delivered, (iii) the terms of the Subordinated Debentures
have been duly established in accordance with the Indenture and (iv) the
Subordinated Debentures have been duly executed and authenticated in
accordance with the Indenture and duly issued and delivered to the Trust
as contemplated by the Registration Statement and upon payment therefor,
the Subordinated Debentures will constitute valid and binding
obligations of the Company enforceable against the Company in accordance
with their terms.
2. Assuming that the Guarantee has been duly authorized, when (i)
the Registration Statement has become effective under the Act, (ii) the
Guarantee has been duly executed and delivered and (iii) the Preferred
Securities have been duly issued and delivered as contemplated by the
Registration Statement and upon payment therefor, the Guarantee will
constitute a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
Our opinions set forth in paragraphs 1 and 2 above are subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
We are members of the Bar of the State of New York and we do not express
any opinion herein concerning any law other than the law of the State of New
York and the federal law of the United States.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Validity of
the Securities" in the Prospectus forming a part of the Registration Statement.
Very truly yours,
/s/ Simpson Thacher & Bartlett
SIMPSON THACHER & BARTLETT
<PAGE>
Exhibit 5B
[Letterhead of Richards, Layton & Finger, PA]
September __, 1998
Atlantic Capital II
c/o Atlantic City Electric Company
800 King Street
Wilmington, Delaware 19899
Re: Atlantic Capital II
-------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Atlantic City Electric
Company, a New Jersey corporation (the "Company"), and Atlantic Capital II, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust (the "Certificate"), as
filed in the office of the Secretary of State of the State of Delaware (the
"Secretary of State") on September __, 1998;
(b) The Trust Agreement of the Trust, dated as of September __, 1998,
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 ___ %
Cumulative Trust Preferred Capital Securities of the Trust representing
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 September __, 1998;
<PAGE>
Atlantic Capital II
September __, 1998
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 B and C thereto) (the "Trust
Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated September __,
1998, 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 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
<PAGE>
Atlantic Capital II
September __, 1998
Page 3
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.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Validity of Securities"
in the Prospectus. In giving the foregoing consents, we do not thereby admit
that we come within the category of Persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
EAM
<PAGE>
Exhibit 8
[Letterhead of Simpson Thacher & Bartlett]
September 14, 1998
Re: Issuance and Sale of Preferred
Securities by Atlantic Capital II
---------------------------------
Atlantic City Electric Company
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
Atlantic Capital II
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
Ladies and Gentlemen:
We have acted as special tax counsel ("Tax Counsel") to Atlantic City
Electric Company, a New Jersey corporation (the "Company"), and Atlantic Capital
II, a statutory business trust created under the laws of the State of Delaware
(the "Trust"), in connection with the preparation of the Prospectus dated
September 11, 1998 (the "Prospectus") with respect to: (i) the issuance and
sale of the Subordinated Debentures by the Company pursuant to the Indenture
(the "Indenture") between the Company and Wilmington Trust Company, as trustee
(in such capacity, the "Debenture Trustee"); and (ii) the issuance and sale of
the Preferred Securities and Common Securities (collectively, the "Trust
Securities") pursuant to the Original Trust Agreement, as amended and restated,
(the "Trust Agreement") among the Company, as depositor, Wilmington Trust
Company, as Property Trustee, and the Administrator Trustees named therein. The
Common Securities and Preferred Securities are
<PAGE>
-2-
guaranteed by the Company with respect to the payment of distributions and
payments upon liquidation, redemption and otherwise pursuant to, and to the
extent set forth in, the Guarantee Agreement (the "Guarantee") between the
Company and Wilmington Trust Company, as trustee (in such capacity, the
"Guarantee Trustee"), for the benefit of the holders of the Common Securities
and Preferred Securities. The Preferred Securities will be offered for sale to
investors pursuant to the Prospectus.
All capitalized terms used in this opinion letter and not otherwise
defined herein shall have the meaning ascribed to such terms in the Prospectus.
In delivering this opinion letter, we have reviewed and relied upon:
(i) the Prospectus; (ii) a form of the Indenture; (iii) a form of the
Subordinated Debentures; (iv) a form of the Trust Agreement; (v) a form of the
Guarantee; and (vi) forms of the Trust Securities. We also have examined and
relied upon originals or copies, certified or otherwise identified to our
satisfaction, of such records of the Company and the Trust and such other
documents, certificates and records as we have deemed necessary or appropriate
as a basis for the opinions set forth herein.
In our examination of such material, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals
and the conformity to original documents of all copies of documents submitted to
us. In addition, we also have assumed that the transactions related to the
issuance of the Subordinated Debentures and the Trust Securities will be
consummated in accordance with the terms of the documents and forms of documents
described herein.
On the basis of the foregoing and assuming that the Trust was formed and
will be maintained in compliance with the terms of the Trust Agreement, we
hereby confirm our opinions set forth in the Prospectus under the caption
"Certain United States Federal Income Tax Consequences".
<PAGE>
-3-
We express no opinion with respect to the transactions referred to
herein or in the Prospectus other than as expressly set forth herein. Moreover,
we note that there is no authority directly on point dealing with securities
such as the Preferred Securities or transactions of the type described herein
and that our opinion is not binding on the Internal Revenue Service or the
courts, either of which could take a contrary position.
Recently, a petition was filed in the United States Tax Court as a
result of a challenge by the Internal Revenue Service of the petitioner's
treatment as indebtedness of a loan issued in circumstances with similarities to
the issuance of the Subordinated Debentures. Nevertheless, we believe that if
challenged, the opinions we express herein would be sustained by a court with
jurisdiction in a properly presented case.
Our opinion is based upon the Internal Revenue Code of 1986, as amended,
the Treasury regulations promulgated thereunder and other relevant authorities
and law, all as in effect on the date hereof. Consequently, future changes in
the law may cause the tax treatment of the transactions referred to herein to be
materially different from that described above.
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the federal law of the
United States.
We hereby consent to the use of our name in the Prospectus under the
caption "Certain United States Federal Income Tax Consequences".
Very truly yours,
/s/ Simpson Thacher & Bartlett
SIMPSON THACHER & BARTLETT
<PAGE>
EXHIBIT 23-A
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Atlantic City Electric Company and Atlantic Capital II on Form S-3 of our report
dated February 2, 1998 (March 1, 1998 as to Note 4), appearing in the Annual
Report on Form 10-K of Atlantic City Electric Company for the year ended
December 31, 1997 and to the reference to us under the heading "Experts" in this
Registration Statement.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
September 14, 1998
<PAGE>
Exhibit 25a
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) ____________
_________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
1 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
_________________
ATLANTIC CAPITAL II
(Exact name of obligor as specified in its charter)
Delaware To Be Applied For
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
(Address of principal executive offices) (Zip code)
_________________
ATLANTIC CAPITAL II __% CUMULATIVE TRUST PREFERRED CAPITAL SECURITIES*
(Title of the indenture securities)
- ------------------
*Specific title to be determined in connection with sale of Atlantic
Capital II __% Cumulative Trust Preferred Capital 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.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington,
D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. - A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
- ------------------------
/*/ Pursuant to General Instruction B, the Trustee has responded only
to Items 1, 2 and 16 of this form since to the best of the knowledge of the
Trustee the obligor is not in default under any indenture under which the
Trustee is a trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 3/rd/ day of September, 1998.
THE BANK OF NEW YORK
By: LUCILLE FIRRINCIELI
-------------------------
Lucille Firrincieli
Vice President
-2-
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System,
at the close of business March 31, 1998, published in accordance with a call
made by the Federal Reserve Bank of this District pursuant to the provisions of
the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
- ------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin.................... $ 6,397,993
Interest-bearing balances.................. 1,138,362
Securities:
Held-to-maturity securities................ 1,062,074
Available-for-sale securities.............. 4,167,240
Federal funds sold and Securities
purchased under agreements to resell..... 391,650
Loans and lease financing
receivables:
Loans and leases, net of unearned
income................................... 36,538,242
LESS: Allowance for loan and
lease losses............................. 631,725
LESS: Allocated transfer risk
reserve.................................. 0
Loans and leases, net of unearned
income, allowance, and reserve........... 35,906,517
Assets held in trading accounts.............. 2,145,149
Premises and fixed assets (including
capitalized leases)........................ 663,928
Other real estate owned...................... 10,895
Investments in unconsolidated subsid-
iaries and associated companies............ 237,991
Customers' liability to this bank on
acceptances outstanding.................... 992,747
Intangible assets............................ 1,072,517
Other assets................................. 1,643,173
-----------
Total assets................................. $55,830,236
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
- -----------
Deposits:
In domestic offices............................ $24,849,054
Noninterest-bearing............................ 10,011,442
Interest-bearing............................... 14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs............... 15,319,002
Noninterest-bearing............................ 707,820
Interest-bearing............................... 14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase............ 1,906,066
Demand notes issued to the U.S.
Treasury....................................... 215,985
Trading liabilities.............................. 1,591,288
Other borrowed money:
With remaining maturity of one year or less.... 1,991,119
With remaining maturity of more than
one year through three years................. 0
With remaining maturity of more than
three years.................................. 25,574
Bank's liability on acceptances
executed and outstanding....................... 998,145
Subordinated notes and debentures................ 1,314,000
Other liabilities................................ 2,421,281
-----------
Total liabilities................................ 50,631,514
-----------
EQUITY CAPITAL
- --------------
Common stock..................................... 1,135,284
Surplus.......................................... 731,319
Undivided profits and capital
reserves....................................... 3,328,050
Net unrealized holding gains (losses)
on available-for-sale securities............... 40,198
Cumulative foreign currency
translation adjustments........................ (36,129)
-----------
Total equity capital............................. 5,198,722
-----------
Total liabilities and equity capital............. $55,830,236
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi )
Alan R. Griffith ) Directors
J. Carter Bacot )
<PAGE>
Exhibit 25b
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) ____________
_________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
1 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
_________________
ATLANTIC CITY ELECTRIC COMPANY
(Exact name of obligor as specified in its charter)
New Jersey 21-0398280
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
(Address of principal executive offices) (Zip code)
_________________
ATLANTIC CITY ELECTRIC COMPANY __% JUNIOR SUBORDINATED DEBENTURES,
SERIES I, DUE__*
(Title of the indenture securities)
- ------------------
*Specific title to be determined in connection with sale of __% Junior
Subordinated Debentures, Series I, Due __.
<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.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington,
D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. - A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
- ---------------------------
/*/ Pursuant to General Instruction B, the Trustee has responded only to Items
1, 2 and 16 of this form since to the best of the knowledge of the Trustee the
obligor is not in default under any indenture under which the Trustee is a
trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 3/rd/ day of September, 1998.
THE BANK OF NEW YORK
By: LUCILLE FIRRINCIELI
-----------------------
Lucille Firrincieli
Vice President
-2-
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System,
at the close of business March 31, 1998, published in accordance with a call
made by the Federal Reserve Bank of this District pursuant to the provisions of
the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
- ------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin.................... $ 6,397,993
Interest-bearing balances.................. 1,138,362
Securities:
Held-to-maturity securities................ 1,062,074
Available-for-sale securities.............. 4,167,240
Federal funds sold and Securities
purchased under agreements to resell..... 391,650
Loans and lease financing
receivables:
Loans and leases, net of unearned
income................................... 36,538,242
LESS: Allowance for loan and
lease losses............................. 631,725
LESS: Allocated transfer risk
reserve.................................. 0
Loans and leases, net of unearned
income, allowance, and reserve........... 35,906,517
Assets held in trading accounts.............. 2,145,149
Premises and fixed assets (including
capitalized leases)........................ 663,928
Other real estate owned...................... 10,895
Investments in unconsolidated subsid-
iaries and associated companies............ 237,991
Customers' liability to this bank on
acceptances outstanding.................... 992,747
Intangible assets............................ 1,072,517
Other assets................................. 1,643,173
-----------
Total assets................................. $55,830,236
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
- -----------
Deposits:
In domestic offices........................... $24,849,054
Noninterest-bearing........................... 10,011,442
Interest-bearing.............................. 14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs.............. 15,319,002
Noninterest-bearing........................... 707,820
Interest-bearing.............................. 14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase........... 1,906,066
Demand notes issued to the U.S.
Treasury...................................... 215,985
Trading liabilities............................. 1,591,288
Other borrowed money:
With remaining maturity of one year or less... 1,991,119
With remaining maturity of more than
one year through three years................ 0
With remaining maturity of more than
three years................................. 25,574
Bank's liability on acceptances
executed and outstanding...................... 998,145
Subordinated notes and debentures............... 1,314,000
Other liabilities............................... 2,421,281
-----------
Total liabilities............................... 50,631,514
-----------
EQUITY CAPITAL
- --------------
Common stock.................................... 1,135,284
Surplus......................................... 731,319
Undivided profits and capital
reserves...................................... 3,328,050
Net unrealized holding gains (losses)
on available-for-sale securities.............. 40,198
Cumulative foreign currency
translation adjustments....................... (36,129)
-----------
Total equity capital............................ 5,198,722
-----------
Total liabilities and equity capital............ $55,830,236
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi )
Alan R. Griffith ) Directors
J. Carter Bacot )
<PAGE>
Exhibit 25c
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) ____________
_________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
1 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
_________________
ATLANTIC CITY ELECTRIC COMPANY
(Exact name of obligor as specified in its charter)
New Jersey 21-0398280
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
(Address of principal executive offices) (Zip code)
_________________
ATLANTIC CITY ELECTRIC COMPANY GUARANTEE WITH RESPECT TO
ATLANTIC CAPITAL II __% CUMULATIVE TRUST PREFERRED CAPITAL SECURITIES*
(Title of the indenture securities)
- ------------------
*Specific title to be determined in connection with sale of Atlantic
Capital II __% Cumulative Trust Preferred Capital 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.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington,
D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. - A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
- ----------------------
/*/ Pursuant to General Instruction B, the Trustee has responded only
to Items 1, 2 and 16 of this form since to the best of the knowledge of the
Trustee the obligor is not in default under any indenture under which the
Trustee is a trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 3/rd/ day of September, 1998.
THE BANK OF NEW YORK
By: LUCILLE FIRRINCIELI
-----------------------
Lucille Firrincieli
Vice President
-2-
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System,
at the close of business March 31, 1998, published in accordance with a call
made by the Federal Reserve Bank of this District pursuant to the provisions of
the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
- ------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin.................... $ 6,397,993
Interest-bearing balances.................. 1,138,362
Securities:
Held-to-maturity securities................ 1,062,074
Available-for-sale securities.............. 4,167,240
Federal funds sold and Securities
purchased under agreements to resell..... 391,650
Loans and lease financing
receivables:
Loans and leases, net of unearned
income................................... 36,538,242
LESS: Allowance for loan and
lease losses............................. 631,725
LESS: Allocated transfer risk
reserve.................................. 0
Loans and leases, net of unearned
income, allowance, and reserve........... 35,906,517
Assets held in trading accounts.............. 2,145,149
Premises and fixed assets (including
capitalized leases)........................ 663,928
Other real estate owned...................... 10,895
Investments in unconsolidated subsid-
iaries and associated companies............ 237,991
Customers' liability to this bank on
acceptances outstanding.................... 992,747
Intangible assets............................ 1,072,517
Other assets................................. 1,643,173
-----------
Total assets................................. $55,830,236
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
- -----------
Deposits:
In domestic offices........................... $24,849,054
Noninterest-bearing........................... 10,011,442
Interest-bearing.............................. 14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs.............. 15,319,002
Noninterest-bearing........................... 707,820
Interest-bearing.............................. 14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase........... 1,906,066
Demand notes issued to the U.S.
Treasury...................................... 215,985
Trading liabilities............................. 1,591,288
Other borrowed money:
With remaining maturity of one year or less... 1,991,119
With remaining maturity of more than
one year through three years................ 0
With remaining maturity of more than
three years................................. 25,574
Bank's liability on acceptances
executed and outstanding...................... 998,145
Subordinated notes and debentures............... 1,314,000
Other liabilities............................... 2,421,281
-----------
Total liabilities............................... 50,631,514
-----------
EQUITY CAPITAL
- --------------
Common stock.................................... 1,135,284
Surplus......................................... 731,319
Undivided profits and capital
reserves...................................... 3,328,050
Net unrealized holding gains (losses)
on available-for-sale securities.............. 40,198
Cumulative foreign currency
translation adjustments....................... (36,129)
-----------
Total equity capital............................ 5,198,722
-----------
Total liabilities and equity capital............ $55,830,236
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi )
Alan R. Griffith ) Directors
J. Carter Bacot )
