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AMENDED AND RESTATED
TRUST AGREEMENT
OF
PECO ENERGY CAPITAL TRUST III
PECO ENERGY CAPITAL, L.P.,
as Grantor
and
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Dated as of April 6, 1998
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
ARTICLE II
CONTINUATION OF TRUST
SECTION 2.01. Continuation of Trust ....................................... 4
SECTION 2.02. Trust Account ............................................... 5
SECTION 2.03. Title to Trust Property ..................................... 5
SECTION 2.04. Situs of Trust .............................................. 5
SECTION 2.05. Powers of Trustee Limited ................................... 5
SECTION 2.06. Liability of Holders of Capital Securities .................. 5
ARTICLE III
FORM OF CAPITAL SECURITIES, EXECUTION AND
DELIVERY, TRANSFER AND SURRENDER OF CAPITAL SECURITIES
SECTION 3.01. Form and Transferability of Capital Securities .............. 6
SECTION 3.02. Issuance of Capital Securities .............................. 7
SECTION 3.03. Registration, Transfer and Exchange of
Capital Securities .......................................... 7
SECTION 3.04. Lost or Stolen Capital Securities, Etc. ..................... 8
SECTION 3.05. Cancellation and Destruction of Surrendered
Capital Securities .......................................... 8
SECTION 3.06. Surrender of Capital Securities and
Withdrawal of Preferred Securities .......................... 9
SECTION 3.07. Redeposit of Preferred Securities ........................... 10
SECTION 3.08. Filing Proofs, Certificates and other
Information ................................................. 10
ARTICLE IV
DISTRIBUTIONS AND OTHER RIGHTS OF HOLDERS OF CAPITAL SECURITIES
SECTION 4.01. Distributions of Semiannual Distributions
on Preferred Securities ..................................... 11
SECTION 4.02. Redemptions of Preferred Securities ......................... 11
SECTION 4.03. Distributions in Liquidation of Grantor ..................... 12
SECTION 4.04. Fixing of Record Date for Holders of Capital
Securities .................................................. 13
SECTION 4.05. Payment of Distributions .................................... 13
SECTION 4.06. Special Representative and Voting Rights .................... 13
SECTION 4.07. Changes Affecting Preferred Securities and
Reclassifications, Recapitalizations, Etc. .................. 14
ARTICLE V
THE GUARANTEE
SECTION 5.01. The Guarantee ............................................... 15
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ARTICLE VI
THE TRUSTEE
SECTION 6.01. Eligibility ................................................. 15
SECTION 6.02. Obligations of the Trustee .................................. 16
SECTION 6.03. Resignation and Removal of the Trustee;
Appointment of Successor Trustee ............................ 18
SECTION 6.04. Corporate Notices and Reports ............................... 19
SECTION 6.05. Status of Trust ............................................. 19
SECTION 6.06. Appointment of Grantor to File on Behalf of
Trust ....................................................... 19
SECTION 6.07. Indemnification by the General Partner ...................... 20
SECTION 6.08. Fees, Charges and Expenses .................................. 20
SECTION 6.09. Appointment of Co-Trustee or Separate Trustee ............... 20
ARTICLE VII
AMENDMENT AND TERMINATION
SECTION 7.01. Supplemental Trust Agreement ................................ 22
SECTION 7.02. Termination ................................................. 22
ARTICLE VIII
MERGER, CONSOLIDATION, ETC. OF GRANTOR
SECTION 8.01. Limitation on Permitted Merger Consolidation,
Etc. of Grantor ............................................. 23
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Counterparts ................................................ 23
SECTION 9.02. Exclusive Benefits of Parties ............................... 24
SECTION 9.03. Invalidity of Provisions .................................... 24
SECTION 9.04. Notices ..................................................... 24
SECTION 9.05. Trustee's Agents ............................................ 25
SECTION 9.06. Holders of Capital Securities Are Parties ................... 25
SECTION 9.07. Governing Law ............................................... 25
SECTION 9.08. Headings .................................................... 25
SECTION 9.09. Capital Securities Non-Assessable and Fully Paid ............ 25
SECTION 9.10. No Preemptive Rights ........................................ 25
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AMENDED AND RESTATED
TRUST AGREEMENT
AMENDED AND RESTATED TRUST AGREEMENT, dated as of April 6,
1998 (as amended from time to time, this "Trust Agreement") is among PECO ENERGY
CAPITAL, L.P., a Delaware limited partnership, as grantor (the "Grantor"), FIRST
UNION TRUST COMPANY, NATIONAL ASSOCIATION, as trustee (the "Trustee"), and
joined in by PECO ENERGY CAPITAL CORP., a Delaware corporation and the general
partner of the Grantor, not as a grantor, trustee or beneficiary but solely for
the purposes stated herein (the "General Partner").
W I T N E S S E T H:
WHEREAS, the Trustee and the Grantor established the Trust (as
defined below) under the Delaware Business Trust Act (12 Del. C. ss. 3801, et
seq.) (as amended from time to time, the "Business Trust Act"), pursuant to a
Trust Agreement, dated as of March 13, 1998 (the "Original Trust Agreement"),
and a Certificate of Trust filed with the Secretary of State of the State of
Delaware on March 13, 1998; and
WHEREAS, the Trustee and the Grantor hereby desire to continue
the Trust and to amend and restate in its entirety the Original Trust Agreement;
and
WHEREAS, the Trust proposes to issue Capital Securities each
representing a 7.38% Cumulative Preferred Security, Series D, representing a
limited partner interest of the Grantor (the "Preferred Securities"); and
WHEREAS, interests in the Trust are to be evidenced by Capital
Security certificates executed by the Trustee in accordance with this Trust
Agreement, which are to be delivered to the Holders;
NOW, THEREFORE, in consideration of the premises contained
herein and intending to be legally bound hereby, it is agreed by and among the
parties hereto to amend and restate in its entirety the Original Trust Agreement
as follows:
ARTICLE I
DEFINITIONS
The following definitions shall apply to the respective terms
(in the singular and plural forms of such terms) used in this Trust Agreement
and the Capital Securities:
"Affiliate" of any specified Person means any other Person
controlling or controlled by or under 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.
"Business Day" means any day other than a day on which banking
institutions in the City of New York or the State of Delaware are closed for
business.
"Business Trust Act" shall have the meaning set forth in the
recitals to this Trust Agreement.
"Capital Security" shall mean a Capital Trust Pass-through
Security issued hereunder representing an interest in the Trust equal to and
representing a Preferred Security and evidenced by a certificate executed by the
Trustee pursuant to Article III.
"Commission" shall have the meaning set forth in Section 6.05
of this Trust Agreement.
"Corporate Office" means the office of the Trustee at which at
any particular time its business in respect of matters governed by this Trust
Agreement shall be administered, which at the date of this Trust Agreement is
located at 0 Xxxxxx Xxxxxx, 000 Xxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx
00000.
"DTC" means the Depository Trust Company or any successor
thereto.
"Exchange" shall have the meaning set forth in Section 6.06 to
this Trust Agreement.
"Exchange Act" shall have the meaning set forth in Section
6.06 to this Trust Agreement.
"Exchange Act Reports" shall have the meaning set forth in
Section 6.06 to this Trust Agreement.
"General Partner" means PECO Energy Capital Corp., a Delaware
corporation, as general partner of the Grantor, and any successor thereto
pursuant to the terms of the Partnership Agreement.
"Grantor" means PECO Energy Capital, L.P., a Delaware limited
partnership, and its successors.
"Guarantee" means the Payment and Guarantee Agreement dated as
of April 6, 1998, as amended from time to time with respect to the Preferred
Securities delivered by PECO Energy to the Grantor.
"Holder" means the Person in whose name a certificate
representing one or more Capital Securities is registered on the Register
maintained by the Registrar for such purposes.
"Partnership Agreement" means the Amended and Restated Limited
Partnership Agreement of the Grantor dated as of July 25, 1994, as amended from
time to time, together with any Action (as defined in the Partnership Agreement)
established by the General Partner.
"Paying Agent" means the Person from time to time acting as
Paying Agent as provided in Section 4.05 of this Trust Agreement.
"PECO Energy" means PECO Energy Company, a Pennsylvania
corporation.
"Person" means any individual, general partnership, limited
partnership, corporation, limited liability company, joint venture, trust,
business trust, cooperative or association and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person
where the context so admits.
"Preferred Securities" means the 7.38% Cumulative Preferred
Securities, Series D, representing limited partner interests of the Grantor, or
any Successor Securities issued to the Trust and held by the Trustee (unless
withdrawn under Section 3.06) from time to time under this Trust Agreement for
the benefit of the Holders.
"Redemption Date" shall have the meaning set forth in Section
4.02 of this Trust Agreement.
"Register" shall have the meaning set forth in Section 3.03 of
this Trust Agreement.
"Registrar" shall mean any bank or trust company appointed to
register Capital Security certificates and to register transfers thereof as
herein provided.
"Special Representative" shall have the meaning set forth in
Section 13.02(d) of the Partnership Agreement.
"Successor Securities" shall have the meaning set forth in
Section 13.02(e) of the Partnership Agreement.
"Trust" means the trust governed by this Trust Agreement.
"Trust Agreement" shall mean this Amended and Restated Trust
Agreement, as the same may be amended, modified or supplemented from time to
time.
"Trust Estate" means all right, title and interest of the
Trust in and to the Preferred Securities (including any Successor Securities),
and all distributions and payments with respect thereto, including payments by
PECO Energy under the Guarantee. "Trust Estate" shall not include any amounts
paid or payable to the Trustee pursuant to this Trust Agreement, including,
without limitation, fees, expenses and indemnities.
"Trustee" shall mean First Union Trust Company, National
Association, a national association, in its capacity as Trustee and not in its
individual capacity and any successor as trustee hereunder.
"1933 Act Registration Statement" shall have the meaning set
forth in Section 6.06 to this Trust Agreement.
"1934 Act Registration Statement" shall have the meaning set
forth in Section 6.06 to this Trust Agreement.
ARTICLE II
CONTINUATION OF TRUST
SECTION 2.01. Continuation of Trust.
(a) The Trust continued hereby shall be known as "PECO Energy
Capital Trust III." The Trust exists for the sole purpose of issuing Capital
Securities representing the Preferred Securities held by the Trust and
performing functions directly related thereto. The Grantor hereby delivers to
the Trustee for deposit in the Trust a certificate representing 78,105 Preferred
Securities for the benefit of the Holders. Each Holder is intended by the
Grantor to be the beneficial owner of the number of Preferred Securities
represented by the Capital Securities held by such Holder, not to hold an
undivided interest in all of the Preferred Securities. To the fullest extent
permitted by law, without the need for any other action of any Person, including
the Trustee and any other Holder, each Holder shall be entitled to enforce in
the name of the Trust the Trust's rights under the Preferred Securities
represented by the Capital Securities held by such Holder and any recovery on
such an enforcement action shall belong solely to such Holder who brought the
action, not to the Trust, Trustee or any other Holder individually or to Holders
as a group. Subject to Section 7.02, this Trust shall be irrevocable.
(b) The Trustee hereby acknowledges receipt of the Preferred
Securities, registered in the name of the Trust, and its acceptance on behalf of
the Trust of the Preferred Securities, and declares that the Trust shall hold
the Preferred Securities (including any Successor Securities) for the benefit of
the Holders.
SECTION 2.02. Trust Account. The Trustee shall open an account
entitled "PECO Energy Capital Trust III - Trust Account." All funds received by
the Trustee on behalf of the Trust from the Preferred Securities or pursuant to
Article V will be deposited in such account by the Trustee until distributed as
provided in Article IV.
SECTION 2.03. Title to Trust Property. Legal title to all of
the Trust Estate shall be vested at all times in the Trust.
SECTION 2.04. Situs of Trust. The situs of the Trust shall be
in Wilmington, Delaware. The Trust's bank account shall be maintained with a
bank in the State of Delaware. The Trustee shall cause to be maintained the
books and records of the Trust at the Corporate Office. The Trust Estate shall
be held in the State of Delaware. Notwithstanding the foregoing, the Trustee may
transfer such of the books and records of the Trust to a co-trustee appointed
pursuant to Section 6.09 or to such agents as it may appoint in accordance with
the Section 9.05 hereof, as shall be reasonably necessary (and for so long as
may be reasonably necessary) to enable such co-trustee or agents to perform the
duties and obligations for which such co-trustee or agents may be so employed.
SECTION 2.05. Powers of Trustee Limited . The Trustee shall
have no power to create, assume or incur indebtedness or other liabilities in
the name of the Trust. The Trustee shall have full power to conduct the business
of the Trust of holding the Preferred Securities for the Holders and taking the
other actions provided by this Trust Agreement.
SECTION 2.06. Liability of Holders of Capital Securities. With
respect to the Trust, Holders of Capital Securities shall be entitled to the
same limitation of personal liability to which stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware are extended.
ARTICLE III
FORM OF CAPITAL SECURITIES, EXECUTION AND
DELIVERY, TRANSFER AND SURRENDER OF CAPITAL SECURITIES
SECTION 3.01. Form and Transferability of Capital Securities .
(a) Except as otherwise required by DTC, Capital Securities
shall be evidenced by certificates engraved or printed or lithographed with
steel-engraved borders and underlying tint in substantially the form set forth
in Exhibit A annexed to this Trust Agreement, with the appropriate insertions,
modifications and omissions, as hereinafter provided.
(b) Certificates evidencing Capital Securities shall be
executed by the Trustee by the manual signature of a duly authorized signatory
of the Trustee, provided, however, that such signature may be a facsimile if a
Registrar (other than the Trustee) shall have countersigned the Capital Security
by manual signature of a duly authorized signatory of the Registrar. No
certificate evidencing one or more Capital Securities shall be entitled to any
benefit under this Trust Agreement or be valid or obligatory for any purpose
unless it shall have been executed as provided in the preceding sentence. The
Registrar shall record on the Register each Capital Security certificate
executed as provided above and delivered as hereinafter provided.
(c) Certificates evidencing Capital Securities shall be in
denominations of any whole number of Preferred Securities. All Capital Security
certificates shall be dated the date of their execution or countersignature.
(d) Certificates evidencing Capital Securities may be endorsed
with or have incorporated in the text thereof such legends or recitals or
changes not inconsistent with the provisions of this Trust Agreement as may be
required by the Trustee or required to comply with any applicable law or
regulation or with the rules and regulations of any securities exchange upon
which the Capital Securities may be listed or to conform with any usage with
respect thereto.
(e) Title to any Capital Security certificate that is properly
endorsed or accompanied by a properly executed instrument of transfer or
endorsement shall be transferable by delivery with the same effect as in the
case of a negotiable instrument; provided, however, that until the transfer
shall be registered on the Register as provided in Section 3.03, the Trust, the
Trustee, the Registrar and the Grantor may, notwithstanding any notice to the
contrary, treat the Holder thereof at such time as the absolute owner thereof
for the purpose of determining the Person entitled to distributions or to any
notice provided for in this Trust Agreement and for all other purposes.
SECTION 3.02. Issuance of Capital Securities . Upon receipt by
the Trustee on behalf of the Trust of a certificate or certificates for the
Preferred Securities, subject to the terms and conditions of this Trust
Agreement, the Trustee, on behalf of the Trust, shall execute and deliver to DTC
one or more certificates evidencing the Capital Securities in the name of DTC's
nominee, who shall thereupon be the initial Holder of Capital Securities.
SECTION 3.03. Registration, Transfer and Exchange of Capital
Securities . The Trustee shall cause a Register (the "Register") to be kept at
the office of the Registrar in which, subject to such reasonable regulations as
the Trustee and the Registrar may prescribe, the Trustee shall provide for the
registration of Capital Security certificates and of transfers and exchanges of
Capital Security certificates as herein provided. The Grantor hereby appoints
First Union Trust Company, National Association as the Registrar. The Registrar
shall also act as transfer agent. The Grantor may remove the Registrar and, upon
removal or resignation of the Registrar, appoint a successor Registrar. Subject
to the terms and conditions of this Trust Agreement, the Registrar shall
register the transfers on the Register from time to time of Capital Security
certificates upon any surrender thereof by the Holder in person or by a duly
authorized attorney, properly endorsed or accompanied by a properly executed
instrument of transfer or endorsement, together with evidence of the payment of
any transfer taxes as may be required by law. Upon such surrender, the Trustee
shall execute a new Capital Security certificate representing the same number of
Preferred Securities in accordance with Section 3.01(b) and deliver the same to
or upon the order of the Person entitled thereto.
At the option of a Holder, Capital Security certificates may
be exchanged for other Capital Security certificates representing the same
number of Preferred Securities. Upon surrender of a Capital Security certificate
at the office of the Registrar or such other office as the Trustee may designate
for the purpose of effecting an exchange of Capital Security certificates,
subject to the terms and conditions of this Trust Agreement, the Trustee shall
execute and deliver a new Capital Security certificate representing the same
number of Preferred Securities as the Capital Security certificate surrendered.
As a condition precedent to the registration of the transfer
or exchange of any Capital Security certificate, the Registrar may require (i)
production of proof satisfactory to it as to the identity and genuineness of any
signature; and (ii) compliance with such regulations, if any, as the Trustee or
the Registrar may establish not inconsistent with the provisions of this Trust
Agreement.
No service charge shall be made to a Holder of Capital
Securities for any registration of transfer or exchange of Capital Security
certificates, but the Trustee or the Registrar shall 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 Capital Security certificates.
Neither the Trustee nor the Registrar shall be required (a) to
register the transfer of or exchange any Capital Security certificate for a
period beginning at the opening of business ten days preceding any selection of
Capital Securities to be redeemed and ending at the close of business on the day
of the mailing a notice of redemption of Capital Securities or (b) to register
the transfer of or exchange of Capital Securities called or being called for
redemption in whole or in part, except as provided in Section 4.02.
SECTION 3.04. Lost or Stolen Capital Securities, Etc. In case
any Capital Security certificate shall be mutilated or destroyed or lost or
stolen and in the absence of notice to the Trustee that such Capital Security
has been acquired by a protected purchaser (as such term is used in Section
8-405(a)(1) of the Delaware Uniform Commercial Code), the Trustee shall execute
and deliver a Capital Security certificate of like form and tenor in exchange
and substitution for such mutilated Capital Security certificate or in lieu of
and in substitution for such destroyed, lost or stolen Capital Security
certificate, provided, however, that the Holder thereof provides the Trustee
with (i) evidence satisfactory to the Trustee of such destruction, loss or theft
of such Capital Security certificate, of the authenticity thereof and of his
ownership thereof, (ii) reasonable indemnification satisfactory to the Trustee
and (iii) payment of any expense (including fees, charges and expenses of the
Trustee) in connection with such execution and delivery. Any duplicate Capital
Security certificate issued pursuant to this Section 3.04 shall constitute
complete and indefeasible evidence of beneficial ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Capital Security
certificate shall be found at any time.
SECTION 3.05. Cancellation and Destruction of Surrendered
Capital Securities. All Capital Security certificates surrendered to the
Trustee shall be cancelled by the Trustee. Except as prohibited by applicable
law or regulation, at any time after six years from the date of surrender of any
Capital Security certificate, the Trustee may destroy such cancelled Capital
Security certificates.
SECTION 3.06. Surrender of Capital Securities and Withdrawal
of Preferred Securities . Any Person who is the beneficial owner (an "Owner") of
the Capital Securities represented by the global certificate held by DTC or a
successor clearing agency (the "Clearing Agency") or, if a participant in the
Clearing Agency is not the Owner, then as reflected in the records of a Person
maintaining an account with such Clearing Agency (directly or indirectly), in
accordance with the rules of such Clearing Agency, may withdraw all, but not
less than all, of the Preferred Securities represented by such Capital
Securities by providing a written notice and an agreement to be bound by the
terms of the Partnership Agreement to the Trustee at the Corporate Office or at
such other office as the Trustee may designate for such withdrawals, all in form
satisfactory to the Trustee, in its sole discretion. Within a reasonable period
after such request has been properly made, (i) the Trustee shall instruct DTC to
reduce the number of Capital Securities represented by the global certificate
held by DTC by an amount equal to the number of Capital Securities to be so
withdrawn by the Owner, (ii) the Grantor shall issue to the Owner a certificate,
in form substantially similar to that certificate attached hereto as Exhibit A
to the Partnership Agreement, representing the number of Preferred Securities so
withdrawn and (iii) the Trustee, on behalf of the Trust, shall reduce the number
of Preferred Securities represented by the global certificate held by the
Trustee by a like amount; provided, that the Grantor shall not issue any
fractional number of Preferred Securities. If an Owner of Capital Securities
withdraws Preferred Securities in accordance with this Section 3.06, such Owner
of Capital Securities shall cease to be an Owner. The Preferred Securities will
only be issued by the Grantor in certificated form.
An Owner who wishes to withdraw Preferred Securities in
accordance with this Section 3.06 will be required to provide the Grantor with a
completed Form W-8 or such other documents or information as are requested by
the Grantor for tax reporting purposes and thereafter shall be admitted to the
Grantor as a preferred partner of the Grantor upon such Owner's receipt of a
certificate evidencing such Preferred Securities registered in such Owner's
name.
The Trustee shall deliver the Preferred Securities represented
by the Capital Securities surrendered to the Owner in accordance with this
Section 3.06 at the Corporate Office, except that, at the request, risk and
expense of the Owner and for the account of the Owner thereof, such delivery may
be made at such other place as may be designated by such Owner.
Notwithstanding anything in this Section 3.06 to the contrary,
if the Preferred Securities represented by Capital Securities have been called
for redemption in accordance with the Partnership Agreement, no Owner of such
Capital Securities may withdraw any or all of the Preferred Securities
represented by such Capital Securities.
SECTION 3.07. Redeposit of Preferred Securities. Subject to
the terms and conditions of this Trust Agreement, any holder of Preferred
Securities may redeposit withdrawn Preferred Securities under this Trust
Agreement by delivery to the Trustee of a certificate or certificates for the
Preferred Securities to be deposited, properly endorsed or accompanied, if
required by the Trustee, by a properly executed instrument of transfer or
endorsement in form satisfactory to the Trustee and in compliance with the terms
of the Partnership Agreement, together with all such certifications as may be
required by the Trustee in its sole discretion and in accordance with the
provisions of this Trust Agreement. Within a reasonable period after such
deposit is properly made, the Trustee shall instruct DTC to increase the number
of Capital Securities represented by the global certificate held by DTC by an
amount equal to the Preferred Securities to be deposited. The Capital Securities
will not be issued in certificated form. The Trustee will only accept the
deposit of such Preferred Securities upon payment by such holder of Preferred
Securities to the Trustee of all taxes and other governmental charges and any
fees payable in connection with such deposit and the transfer of the deposited
Preferred Securities.
If required by the Trustee, Preferred Securities presented for
deposit at any time shall also be accompanied by an agreement or assignment, or
other instrument satisfactory to the Trustee, that will provide for the prompt
transfer to the Trustee or its nominee of any distribution or other right that
any Person in whose name the Preferred Securities are registered may thereafter
receive upon or in respect of such deposited Preferred Securities, or in lieu
thereof such agreement of indemnity or other agreement as shall be satisfactory
to the Trustee.
SECTION 3.08. Filing Proofs, Certificates and Other
Information. Any Person presenting Preferred Securities for redeposit in
accordance with Section 3.07 may be required from time to time to file such
proof of residence or other information, to execute such Preferred Security
certificates and to make such representations and warranties as the Trustee may
reasonably deem necessary or proper. The Trustee may withhold or delay the
delivery of any Capital Security or Capital Securities, the transfer, redemption
or exchange of any Capital Security or Capital Securities or the making of any
distribution until such proof or other information is filed, such certificates
are executed or such representations and warranties are made.
ARTICLE IV
DISTRIBUTIONS AND OTHER RIGHTS OF HOLDERS OF CAPITAL SECURITIES
SECTION 4.01. Distributions of Semiannual Distributions on
Preferred Securities. Whenever the Trustee shall receive any cash distribution
representing a semiannual distribution on the Preferred Securities (whether or
not distributed by the Grantor on the regular semiannual distribution date
therefor) or payment under the Guarantee in respect thereof pursuant to Article
V of this Agreement, the Trustee acting directly or through any Paying Agent
shall distribute to Holders of Capital Securities on the record date fixed
pursuant to Section 4.04, such amounts in proportion to the respective numbers
of Preferred Securities represented by the Capital Securities held by such
Holders.
SECTION 4.02. Redemptions of Preferred Securities. Whenever
the Grantor shall elect or is required to redeem Preferred Securities in
accordance with the Partnership Agreement, it shall (unless otherwise agreed in
writing with the Trustee) give the Trustee not less than 40 days' prior notice
thereof. The Trustee shall, as directed by the Grantor, mail, or cause to be
mailed, first-class postage prepaid, notice of the redemption of Preferred
Securities and the proposed simultaneous redemption of the Capital Securities to
be redeemed in connection herewith, not less than 30 and not more than 60 days
prior to the date fixed for redemption (the "Redemption Date") of the Capital
Securities. Such notice shall be mailed to the Holders of the Capital Securities
to be redeemed, at the addresses of such Holders as the same appear on the
records of the Registrar. No defect in the notice of redemption or in the
mailing or delivery thereof or publication of its contents shall affect the
validity of the redemption proceedings. The Grantor shall provide the Trustee
with such notice, and each such notice shall state: the Redemption Date; the
redemption price at which the Capital Securities and the Preferred Securities
are to be redeemed; that all outstanding Capital Securities are to be redeemed
or, in the case of a redemption of fewer than all outstanding Capital Securities
in connection with a partial redemption of Preferred Securities, the number of
such Capital Securities to be so redeemed; the place or places where Capital
Securities to be redeemed are to be surrendered for redemption; and specifying
the CUSIP number assigned to the Capital Securities. In case fewer than all the
outstanding Capital Securities are to be redeemed, the Capital Securities to be
redeemed shall be selected by lot or pro rata (as nearly as may be practicable
without creating fractional shares) or by any other equitable method determined
by the Trustee.
The Grantor agrees that if a partial redemption of the
Preferred Securities would result in a delisting of the Capital Securities from
any national exchange on which the Capital Securities are then listed, the
Grantor will only redeem the Preferred Securities in whole.
On the date of any such redemption of Preferred Securities,
provided that the Grantor (or PECO Energy pursuant to the Guarantee) shall then
have deposited with the Trust the aggregate amount payable upon redemption of
the Preferred Securities to be redeemed, the Trustee, on behalf of the Trust,
shall redeem (using the funds so deposited with it) Capital Securities
representing the same number of Preferred Securities redeemed by the Grantor.
Notice having been mailed by the Trustee as aforesaid, from
and after the Redemption Date (unless the Grantor shall have failed to redeem
the Preferred Securities to be redeemed by it as set forth in the Grantor's
notice provided for in this Section 4.02 and PECO Energy shall have failed to
pay the redemption price of the Preferred Securities under the Guarantee), the
Capital Securities called for redemption shall be deemed no longer to be
outstanding and all rights of the Holders of Capital Securities (except the
right to receive the redemption price in cash upon surrender of Capital
Securities) shall cease and terminate. Upon surrender in accordance with said
notice of the Capital Securities endorsed or assigned for transfer, if the
Trustee shall so require, the Holders of such Capital Securities shall receive
for each such Capital Security an amount equal to the redemption price for each
Preferred Security, in addition to accrued and unpaid distributions thereon to
the date fixed for redemption.
If fewer than all of the Capital Securities of any Holder are
called for redemption, the Registrar will deliver to the Holder of such Capital
Securities upon surrender of the certificate evidencing such Capital Securities
a new certificate evidencing the number of Capital Securities not called for
redemption.
SECTION 4.03. Distributions in Liquidation of Grantor.
Upon and to the extent of receipt by the Trust of any distribution from the
Grantor upon the liquidation of the Grantor or any payment under the Guarantee
in respect thereof pursuant to Article V of this Trust Agreement, after
satisfaction of creditors of the Trust as required by applicable law, the
Trustee shall distribute to the Holders of Capital Securities on the record date
fixed pursuant to Section 4.04, such amounts in proportion to the respective
number of Preferred Securities which were represented by the Capital Securities
held by such Holders.
SECTION 4.04. Fixing of Record Date for Holders of Capital
Securities. Whenever any distribution (other than upon any redemption) shall
become payable, or whenever the Trustee shall receive notice of any meeting at
which holders of Preferred Securities are entitled to vote or of which holders
of Preferred Securities are entitled to notice, the Trustee shall in each such
instance fix a record date (which shall be the same date as the record date
fixed by the General Partner with respect to the Preferred Securities, of which
the General Partner shall promptly inform the Trustee) for the determination of
the Holders of Capital Securities who shall be entitled (i) to receive such
distribution, and (ii) to receive notice of, and to give instructions for the
exercise of voting rights at, any such meeting.
SECTION 4.05. Payment of Distributions. The Grantor shall
appoint one or more Paying Agents for the purpose of paying semiannual
distributions on, the redemption price of, and distributions in liquidation on,
the Capital Securities. The Grantor hereby appoints First Union Trust Company,
National Association to act as Paying Agent and designates the Wilmington office
of the Paying Agent as the place of payment of the redemption price of and of
distributions in liquidation on the Capital Securities. The aforesaid
appointment and designation shall remain in effect until changed by the Grantor.
Payments of semiannual distributions on the Capital Securities shall be payable
by wire transfer into the accounts of or check mailed to the addresses of the
Holders thereof on the record date therefor. Payments of the redemption price of
Capital Securities and distributions in liquidation shall be made upon surrender
of such Capital Securities at the office of the Paying Agent. The Grantor shall
pay semiannual distributions on, the redemption price of, and distributions in
liquidation on, the Preferred Securities directly to the Paying Agent for
distribution to the Holders in accordance with the terms of this Trust
Agreement.
SECTION 4.06. Special Representative and Voting Rights.
(a) If the holders of the Preferred Partner Interests (as
defined in the Partnership Agreement), acting as a single class, are entitled to
appoint and authorize a Special Representative pursuant to Section 13.02(d) of
the Partnership Agreement, the Trustee shall notify the Holders of the Capital
Securities of such right, request direction of each Holder of a Capital Security
as to the appointment of a Special Representative and vote the Preferred
Securities represented by such Capital Security in accordance with such
direction. If the General Partner fails to convene a general meeting of the
Partnership as required in Section 13.02(d) of the Partnership Agreement, the
Trustee shall notify the Holders of the Capital Securities and, if so directed
by the Holders of Capital Securities representing Preferred Securities
constituting at least 10% of the aggregate stated liquidation preference of the
outstanding Preferred Partner Interests (as defined in the Partnership
Agreement) shall convene such meeting.
(b) Upon receipt of notice of any meeting at which the Holders
of Preferred Securities are entitled to vote, the Trustee shall, as soon as
practicable thereafter, mail to the Holders of Capital Securities a notice,
which shall be provided by the General Partner and which shall contain (i) such
information as is contained in such notice of meeting, (ii) a statement that the
Holders of Capital Securities at the close of business on a specified record
date fixed pursuant to Section 4.04 will be entitled, subject to any applicable
provision of law or of the Partnership Agreement, to instruct the Trustee as to
the exercise of the voting rights pertaining to the amount of Preferred
Securities represented by their respective Capital Securities, and (iii) a brief
statement as to the manner in which such instructions may be given. Upon the
written request of a Holder of a Capital Security on such record date, the
Trustee shall vote or cause to be voted the number of Preferred Securities
represented by the Capital Securities evidenced by such Capital Security in
accordance with the instructions set forth in such request. The Grantor hereby
agrees to take all reasonable action that may be deemed necessary by the Trustee
in order to enable the Trustee to vote such Preferred Securities or cause such
Preferred Securities to be voted. In the absence of specific instructions from
the Holder of a Capital Security, the Trustee will abstain from voting to the
extent of the Preferred Securities represented by such Capital Security.
SECTION 4.07. Changes Affecting Preferred Securities and
Reclassifications, Recapitalizations, Etc. Upon any consolidation, amalgamation,
merger, replacement or conveyance, transfer or lease by the Partnership of its
properties and assets as an entirety in accordance with Section 13.02(e) of the
Partnership Agreement, the Trustee shall, upon the instructions of the Grantor,
treat any Successor Securities or other property (including cash) that shall be
received by the Trustee in exchange for or upon conversion of or in respect of
the Preferred Securities as part of the Trust Estate, and Capital Securities
then outstanding shall thenceforth represent the proportionate interests of
Holders thereof in the new deposited property so received in exchange for or
upon conversion or in respect of such Preferred Securities.
ARTICLE V
THE GUARANTEE
SECTION 5.01. The Guarantee . In connection with the issuance
of the Preferred Securities, PECO Energy has delivered to the General Partner
the Guarantee for the benefit of the holders of the Preferred Securities. If the
General Partner or the Grantor receives any payment under the Guarantee, the
General Partner or the Grantor, as the case may be, will immediately transfer
such payment to the Trustee. All rights to enforce the Guarantee shall remain in
the General Partner, except to the extent set forth in Section 2.04 of the
Guarantee.
ARTICLE VI
THE TRUSTEE
SECTION 6.01. Eligibility. This Trust Agreement shall at all
times have a Trustee which is a bank that has its principal place of business in
the State of Delaware and shall have a combined capital and surplus of at least
$50,000,000. If such corporation publishes reports of conditions at least
annually, pursuant to law or to the requirements of Federal, State, Territorial
or District of Columbia supervising or examining authority, then for the
purposes of this Section 6.01, 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 conditions so published.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.01, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.03.
The Trustee shall make available for inspection by Holders of
Capital Securities at the Corporate Office and at such other places as it may
from time to time deem advisable during normal business hours any reports and
communications received from the Grantor, the General Partner or PECO Energy by
the Trustee as the holder of Preferred Securities.
Promptly upon request from time to time by the Grantor, the
Trustee shall cause the Registrar to furnish to it a list, at the sole expense
of the General Partner, as of a recent date, of the names, addresses and
holdings of all Persons in whose names Capital Securities are registered on the
Register.
SECTION 6.02. Obligations of the Trustee . The Trustee does
not assume any obligation nor shall it be subject to any liability under this
Trust Agreement or any Capital Security to Holders of Capital Securities other
than that it agrees to use good faith in the performance of such duties as are
specifically assigned to the Trustee in this Trust Agreement.
The Trustee shall not be under any obligation to appear in,
prosecute or defend any action, suit or other proceeding with respect to
Preferred Securities or Capital Securities that in its opinion may involve it in
expense or liability, unless indemnity satisfactory to it against all expense
and liability be furnished as often as may be required.
The Grantor may instruct the Trustee to dissolve the Trust and
distribute the Trust Estate on a pro rata basis to the Holders if the Trust, at
any time, is subject to federal income tax with respect to interest received on
its allocable share of interest on the Deferrable Interest Subordinated
Debentures, Series D issued by PECO Energy Company received by the Grantor, the
Trust is subject to more than a de minimis amount of other taxes, duties or
other governmental charges or if an Investment Company Act Event shall occur and
be continuing. "Investment Company Event" means that the Grantor shall have
received an opinion of counsel (which may be regular counsel to PECO Energy or
an affiliate but not an employee thereof) experienced in such matters to the
effect that a change in law or regulation or a change in official interpretation
of law or regulation by any legislative body, court, governmental agency or
regulatory authority has occurred (a "Change in 1940 Act Law") to the effect
that the Trust is or will be considered an "Investment Company" which is
required to be registered under the Investment Company Act of 1940, which Change
in 1940 Act Law becomes effective on or after the date of the issuance of the
Capital Securities.
In the event that the Trustee is uncertain as to application
or interpretation of any provision of this Trust Agreement or must choose
between alternative courses of action, the Trustee may seek the instructions of
the Grantor (or the Special Representative if one has been appointed) by written
notice requesting instructions. The Trustee shall take and be protected in
taking such action as has been directed by the Grantor (or the Special
Representative if one has been approved); provided that, if the Trustee does not
receive instructions within ten days or such shorter time as is set forth in the
Trustee notice, the Trustee 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 interest of the Holders.
The Trustee shall not be liable to any Holder or any other
party having an interest hereunder for any action or any failure to act by it in
reliance upon the advice of or information from legal counsel, accountants, any
Holder of a Capital Security or any other Person believed by it in good faith to
be competent to give such advice or information. The Trustee may rely and shall
be protected from any and all liability in acting upon any written notice,
request, direction or other document believed by it to be genuine and to have
been signed or presented by the proper party or parties.
The Trustee, its parent, Affiliates or subsidiaries may own,
buy, sell or deal in any class of securities of the Grantor, the General Partner
or PECO Energy and its Affiliates and in Capital Securities or become
pecuniarily interested in any transaction in which the Grantor, the General
Partner or PECO Energy or its Affiliates may be interested or contract with or
lend money to or otherwise act as fully or as freely as if it were not the
Trustee hereunder. The Trustee may also act as transfer agent or registrar of
any of the securities of the Grantor, the General Partner or PECO Energy and its
Affiliates or act in any other capacity for PECO Energy or its Affiliates.
The Trustee (and its officers, directors, employees and
agents) makes no representation nor shall it have any liability for or
responsibility with respect to the issuance of Capital Securities or as to the
validity of the registration statement pursuant to which the Capital Securities
are registered under the Securities Act, the Preferred Securities, the Guarantee
or the Capital Securities (except for its counter-signatures thereon) or any
instruments referred to therein or herein, or as to the correctness of any
statement made therein or herein; provided, however, that the Trustee is
responsible for its representations in this Trust Agreement.
The Trustee assumes no responsibility for the correctness of
the description that appears in the Capital Securities, which can be taken as a
statement of the Grantor summarizing certain provisions of this Trust Agreement.
Notwithstanding any other provision herein or in the Capital Securities, the
Trustee makes no warranties or representations as to the validity, genuineness
or sufficiency of any Preferred Securities or the Guarantee or of the Capital
Securities, as to the validity or sufficiency of this Trust Agreement, as to the
value of the Capital Securities or as to any right, title or interest of the
Holders of Capital Securities, except that the Trustee hereby represents and
warrants as follows: (i) the Trustee has been duly organized and is validly
existing and in good standing under federal law, with full power, authority and
legal right under such laws to execute, deliver and carry out the terms of this
Trust Agreement; (ii) this Trust Agreement has been duly authorized, executed
and delivered by the Trustee; and (iii) this Section 6.02 of the Trust Agreement
constitutes a valid and binding obligation of the Trustee enforceable against
the Trustee in accordance with its terms subject to equitable principles and
laws affecting the enforcement of creditors' rights generally.
SECTION 6.03. Resignation and Removal of the Trustee;
Appointment of Successor Trustee. The Trustee may at any time resign as Trustee
hereunder by notice of its election to do so delivered to the Grantor and the
General Partner, such resignation to take effect upon the appointment of a
successor trustee and its acceptance of such appointment as hereinafter
provided.
The Trustee may at any time be removed by the Grantor,
provided that an Event of Default has not occurred and is then continuing under
the Indenture dated as of July 1, 1994 between PECO Energy and First Union
National Bank, as successor trustee, as supplemented from time to time, or the
Guarantee, by notice of such removal delivered to the Trustee, such removal to
take effect upon the appointment of a successor trustee and its acceptance of
such appointment as hereinafter provided.
In case at any time the Trustee acting hereunder shall resign
or be removed, the Grantor shall, within 45 days after the delivery of the
notice of resignation or removal, as the case may be, appoint a successor
trustee, which shall be a bank or trust company, or an Affiliate of a bank or
trust company, having its principal office in the State of Delaware and having a
combined capital and surplus of at least $50,000,000. If a successor Trustee
shall not have been appointed in 45 days, the resigning Trustee may petition a
court of competent jurisdiction to appoint a successor trustee, and the expenses
of such proceeding shall be borne by the General Partner. Every successor
trustee shall execute and deliver to its predecessor and to the Grantor and the
General Partner an instrument in writing accepting its appointment hereunder,
and thereupon such successor trustee, without any further act or deed, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor and for all purposes shall be the Trustee under this Trust
Agreement, and such predecessor, upon payment of all sums due it and on the
written request of the Grantor, shall promptly execute and deliver an instrument
transferring to such successor all rights and powers of such predecessor
hereunder, shall duly assign, transfer and deliver all rights, title and
interest in the Preferred Securities and any moneys or property held hereunder
to such successor and shall deliver to such successor a list of the Holders of
all outstanding Capital Securities. Any successor Trustee shall promptly mail
notice of its appointment to the Holders of Capital Securities.
Any Person into or with which the Trustee may be merged,
consolidated or converted, or any Person succeeding to the corporate trust
business of the Trustee, shall be the successor of such Trustee without the
execution or filing of any document or any further act, provided such Person
shall be eligible under the provisions of the immediately preceding paragraph.
SECTION 6.04. Corporate Notices and Reports. The General
Partner agrees that it will give timely notice to the Trustee and any Paying
Agent of any record date, which record date shall become the record date with
respect to the Capital Securities pursuant to Section 4.04 hereof, for the
Preferred Securities and that it will deliver to the Trustee, and the Trustee
will, promptly after receipt thereof, transmit to the Holders of Capital
Securities, in each case at the address recorded on the Register, copies of all
notices and reports (including financial statements) required by law, by the
rules of any national securities exchange upon which the Capital Securities are
listed or by the Partnership Agreement to be furnished to holders of Preferred
Securities. Such transmission will be at the expense of the General Partner and
the General Partner will provide the Trustee with such number of copies of such
documents as the Trustee may reasonably request. In addition, the Trustee will
transmit to the Holders of Capital Securities at the Grantor's expense such
other documents as may be requested by the Grantor.
SECTION 6.05. Status of Trust. It is intended that the Trust
shall not be an "investment company" under the Investment Company Act of 1940,
as amended. While it is expressly understood and agreed that the Trustee is
acting only in a ministerial capacity hereunder, the Securities and Exchange
Commission (the "Commission") has determined that as of the date hereof, the
Trust is an issuer under the Federal securities laws and is thus required to
sign any registration statement filed or to be filed in connection with the
Capital Securities.
SECTION 6.06. Appointment of Grantor to File on Behalf of
Trust. The Grantor and the Trustee hereby authorize and direct the Grantor, if
the Grantor deems it necessary, appropriate or convenient to do, as the sponsor
of the Trust (and any of the following are hereby confirmed if such action has
been taken) (i) to file with the Commission and execute, in each case on behalf
of the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to such 1933 Act Registration Statement (including the prospectus and
the exhibits contained therein), relating to the registration under the
Securities Act of 1933, as amended, of the Capital Securities of the Trust and
certain other securities; (b) a Registration Statement on Form 8-A (the "1934
Act Registration Statement"), including all pre-effective and post-effective
amendments thereto relating to the registration of the Capital Securities under
Section 12(b) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"); and (c) any reports or other papers or documents required to be filed by,
or desirable to be filed with, the Commission, under the Exchange Act ("Exchange
Act Reports"); (ii) to file with the New York Stock Exchange or Philadelphia
Stock Exchange (each, an "Exchange") and execute on behalf of the Trust one or
more listing applications and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desirable to cause the
Capital Securities to be listed on any of the Exchanges; 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 Capital
Securities under the securities or "Blue Sky" laws of such jurisdictions as the
Grantor, on behalf of the Trust, may deem necessary or desirable.
SECTION 6.07. Indemnification by the General Partner. To the
fullest extent permitted by law, the General Partner agrees to indemnify and
defend the Trustee, the Registrar and any Paying Agent and their directors,
officers, employees and agents against, and hold each of them harmless from, any
liability, costs and expenses (including reasonable attorneys' fees) that may
arise out of or in connection with its acting as the Trustee or the Registrar or
Paying Agent, respectively, under this Trust Agreement and the Capital
Securities, except for any liability arising out of gross negligence, bad faith
or willful misconduct on the part of any such Person or Persons.
SECTION 6.08. Fees, Charges and Expenses. No fees, charges or
expenses of the Trustee or any Trustee's agent hereunder or of any Registrar
shall be payable by any Person other than the General Partner; provided that, if
the Trustee incurs fees, charges or expenses for which it is not otherwise
liable under this Trust Agreement due to any action taken at the election of a
Holder of Capital Securities or other Person, such Holder or other Person will
be liable for such fees, charges and expenses.
SECTION 6.09. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Trust
Agreement, at any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any property of the Trust must at the time be located, the
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the Holders,
such title to the Trust, or any part thereof, and, subject to the other
provisions of this Section 6.09, such powers, duties, obligations, rights and
trusts as the Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
successor trustee under Section 6.03 and no notice to the Holders of the
appointment of any co-trustee or separate trustee shall be required.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon and exercised or performed by the Trustee and such
separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that
under any laws of any jurisdiction in which any particular act or acts
are to be performed, the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event, such rights, powers, duties
and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) no Trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Trust
Agreement. Each separate trustee and co-trustee, upon its acceptance of the
trusts conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Trustee or separately, as may
be provided therein, subject to all the provisions of this Trust Agreement,
specifically including every provision of this Trust Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the Trustee.
Every such instrument shall be filed with the Trustee and a copy thereof given
to the Grantor.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect to this Trust Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
ARTICLE VII
AMENDMENT AND TERMINATION
SECTION 7.01. Supplemental Trust Agreement. The Grantor or
the General Partner, and the Trustee may, at any time and from time to time,
without the consent of the Holders, enter into one or more agreements
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(a) to evidence the succession of another partnership,
corporation or other entity to the Grantor or the General Partner and the
assumption by any such successor of the covenants of the Grantor or the General
Partner herein contained; or
(b) to add to the covenants of the Grantor or the General
Partner for the benefit of the Holders, or to surrender any right or power
herein conferred upon the Grantor or the General Partner; or
(c) (i) to correct or supplement any provision herein which
may be defective or inconsistent with any other provision herein or (ii) to make
any other provisions with respect to matters or questions arising under this
Trust Agreement, provided that any such action taken under subsection (c)(ii)
hereof shall not materially adversely affect the interests of the Holders; or
(d) to cure any ambiguity or correct any mistake.
Any other amendment or agreement supplemental hereto must be
in writing and approved by Holders of 66-2/3% of the then outstanding Capital
Securities.
SECTION 7.02. Termination. The Trust Agreement shall
terminate on the date that all outstanding Capital Securities have been redeemed
or there has been a final distribution in respect of the Preferred Securities in
connection with any liquidation, dissolution or winding up of the Grantor and
such distribution has been made to the Holders of the Capital Securities. Except
as provided in Section 6.07 and Section 6.08, upon termination of this Trust
Agreement and the Trust in accordance with the foregoing, the respective
obligations and responsibilities of the Trustee, the Grantor and the General
Partner created hereby shall terminate.
ARTICLE VIII
MERGER, CONSOLIDATION, ETC. OF GRANTOR
SECTION 8.01. Limitation on Permitted Merger Consolidation,
Etc. of Grantor. The Grantor agrees that it will not consolidate, amalgamate,
merge with or into, or be replaced by, or convey, transfer or lease its
properties and assets substantially in their entirety to any corporation or
other entity without the consent of the Holders of 66-2/3% of the Capital
Securities unless permitted by Section 13.02(e) of the Partnership Agreement and
(i) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not cause the Capital Securities to be delisted by any national
securities exchange or other organization on which the Capital Securities are
then listed, (ii) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital Securities to be
downgraded by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act of 1933, as amended, and (iii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, PECO
Energy has received an opinion of counsel (which may be regular counsel to PECO
Energy or an Affiliate, but not an employee thereof) experienced in such matters
to the effect that Holders of outstanding Capital Securities will not recognize
any gain or loss for Federal income tax purposes as a result of the merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Counterparts. This Trust Agreement may be
executed by the Grantor, the Trustee and the General Partner in separate
counterparts, each of which counterparts, when so executed and delivered shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Trust Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Trust Agreement. Copies of this Trust
Agreement shall be filed with the Trustee and any Trustee's agents appointed
pursuant to Section 9.05 and shall be open to inspection during business hours
at the Corporate Office and the respective offices of such Trustee's agents, if
any, by any Holder of a Capital Security.
SECTION 9.02. Exclusive Benefits of Parties . This Trust
Agreement is for the exclusive benefit of the parties hereto and the Holders of
the Capital Securities and the Preferred Securities, and their respective
successors hereunder, and shall not be deemed to give any legal or equitable
right, remedy or claim to any other Person whatsoever.
SECTION 9.03. Invalidity of Provisions. In case any one or
more of the provisions contained in this Trust Agreement or in the Capital
Securities should be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein or therein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 9.04. Notices. Any notices to be given to the Grantor
or the General Partner hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail, or by telegram or telex
or telecopier confirmed by letter, addressed to the General Partner at 0000
Xxxxxx Xxxx, Xxxxx 000X, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: President, or at
any other place to which the General Partner may have transferred its principal
executive office.
Any notices to be given to the Trustee hereunder or under the
Capital Securities shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by mail, or by telegram or telex or
telecopier confirmed by letter, addressed to the Trustee at the Corporate
Office.
Any notices given to any Holder of a Capital Security
hereunder or under the Capital Securities shall be in writing and shall be
deemed to have been duly given if personally delivered or sent by mail, or by
telegram or telex or telecopier confirmed by letter, addressed to such Holder at
the address of such Holder as it appears on the books of the Trustee or, if such
Holder shall have timely filed with the Trustee a written request that notices
intended for such Holder be mailed to some other address, at the address
designated in such request.
Delivery of a notice sent by mail, or by telegram or telex or
telecopier shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a duly addressed letter confirming an earlier
notice in the case of a telegram or telex or telecopier message) is deposited,
postage prepaid, in a post office letter box. The Trustee may, however, act upon
any telegram or telex or telecopier message received by it from or on behalf of
the other parties hereof or from any Holder of a Capital Security,
notwithstanding that such telegram or telex or telecopier message shall not
subsequently be confirmed by letter as aforesaid.
SECTION 9.05. Trustee's Agents. The Trustee may from time to
time appoint agents to act in any respect for the Trustee for the purposes of
this Trust Agreement. The Trustee shall have no liability for the acts or
omissions of agents selected by it with due care. The Trustee will notify the
General Partner prior to any such action.
SECTION 9.06. Holders of Capital Securities Are Parties .
Notwithstanding that Holders of Capital Securities have not executed and
delivered this Trust Agreement or any counterpart thereof, the Holders of
Capital Securities from time to time shall be bound by all of the terms and
conditions hereof and of the Capital Securities by acceptance of delivery of
Capital Securities.
SECTION 9.07. Governing Law . This Trust Agreement and the
Capital Securities and all rights hereunder and thereunder and provisions hereof
and thereof shall be governed by, and construed in accordance with, the law of
the State of Delaware without giving effect to principles of conflict of laws.
SECTION 9.08. Headings . The headings of articles and sections
of this Trust Agreement and in the form of the Capital Security set forth in
Exhibit A hereto have been inserted for convenience only and are not to be
regarded as part of this Trust Agreement or to have any bearing upon the meaning
or interpretation of any provision contained herein or in the Capital
Securities.
SECTION 9.09. Capital Securities Non-Assessable and Fully Paid
. The Holders of the Capital Securities shall not be personally liable for
obligations of the Trust, the interests in the Trust represented by the Capital
Securities shall be non-assessable for any losses or expenses of the Trust or
for any reason whatsoever, and the Capital Securities upon delivery thereof by
the Trustee pursuant to this Trust Agreement are and shall be deemed fully paid.
SECTION 9.10. No Preemptive Rights . No Holder shall be
entitled as a matter of right to subscribe for or purchase, or have any
preemptive right with respect to, any part of any new or additional interest in
the Trust, whether now or hereafter authorized and whether issued for cash or
other consideration or by way of distribution.
IN WITNESS WHEREOF, the Grantor and the Trustee and the
General Partner have duly executed this Trust Agreement as of the day and year
first above set forth.
PECO ENERGY CAPITAL, L.P.
By: PECO ENERGY CAPITAL CORP.,
its general partner
By: /s/ J. Xxxxx Xxxxxxxx
---------------------------
Name: J. Xxxxx Xxxxxxxx
Title: President
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, as
trustee
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
The General Partner joins in this Trust Agreement solely for the
purposes of obligating itself under Sections 4.04, 4.06, 6.01, 6.04, 6.07 and
6.08 of this Trust Agreement and not as grantor, trustee or beneficiary.
PECO ENERGY CAPITAL CORP.
By: /s/ J. Xxxxx Xxxxxxxx
---------------------------
Name: J. Xxxxx Xxxxxxxx
Title: President
EXHIBIT A
CAPITAL TRUST PASS-THROUGH SECURITIES
OF PECO ENERGY CAPITAL TRUST III,
a Delaware Business Trust,
each Representing a 7.38% Cumulative
Preferred Security, Series D of
PECO Energy Capital, L.P. (a Delaware limited partnership)
No. 1 78,105 Capital Securities
First Union Trust Company, National Association, not in its
individual capacity, but solely as Trustee (the "Trustee") on behalf of the
above-named Trust, hereby certifies that Cede & Co. is the registered owner of
78,105 Capital Trust Pass-through Securities ("Capital Securities"), each
representing a 7.38% Cumulative Preferred Security, Series D (the "Preferred
Securities") of PECO Energy Capital, L.P., a Delaware limited partnership (the
"Grantor"), deposited in trust by the Grantor with the Trustee pursuant to an
Amended and Restated Trust Agreement of PECO Energy Capital Trust III dated as
of April 6, 1998 (as amended or supplemented from time to time, the "Trust
Agreement") among the Grantor, the Trustee and PECO Energy Capital Corp., the
general partner of the Grantor (the "General Partner"). Subject to the terms of
the Trust Agreement, the registered Holder hereof is entitled to a full interest
in the same number of Preferred Securities held by the Trustee under the Trust
Agreement, as are represented by the Capital Securities, including the
distribution, voting, liquidation and other rights of the Preferred Securities
specified in the Amended and Restated Limited Partnership Agreement of the
Grantor, as amended, a copy of which is on file at the Corporate Office.
1. The Trust Agreement. The Capital Securities are issued upon
the terms and conditions set forth in the Trust Agreement. The Trust Agreement
(a copy of which is on file at the Corporate Office of the Trustee) sets forth
the rights of Holders of Capital Securities and the rights and duties of the
Trustee, the Grantor and the General Partner. The statements made herein are
summaries of certain provisions of the Trust Agreement and are subject to the
detailed provisions thereof, to which reference is hereby made. In the event of
any conflict or discrepancy between the provisions hereof and the provisions of
the Trust Agreement, the provisions of the Trust Agreement will govern. Unless
otherwise expressly herein provided, all defined terms used herein shall have
the meanings ascribed thereto in the Trust Agreement.
2. Enforcement of Rights; Withdrawal of Preferred Securities.
To the fullest extent permitted by law, without the need for any other action of
any Person, including the Trustee and any other Holder, each Holder shall be
entitled to enforce in the name of the Trust the Trust's rights under the
Preferred Securities represented by the Capital Securities held by such Holder
and any recovery on such enforcement action shall belong solely to such Holder
who brought the action, not to the Trust, Trustee or any other Holder
individually or to Holders as a group. Any beneficial owner of Capital
Securities may withdraw all, but not less than all, of the Preferred Securities
represented by such Capital Securities by providing a written notice and an
agreement to be bound by the terms of the Partnership Agreement to the Trustee
at the Corporate Office, with evidence of beneficial ownership in form
satisfactory to the Trustee; provided, however, that the Grantor shall not issue
any fractional number of Preferred Securities.
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3. Distributions of Semiannual Distributions on Preferred
Securities. Whenever and to the extent the Trustee shall receive any cash
distribution representing a semiannual distribution on the Preferred Securities
(whether or not distributed by the Grantor on the regular semiannual
distribution date therefor) or payment by PECO Energy Company ("PECO Energy")
under the Payment and Guarantee Agreement dated as of April 6, 1998 (the
"Guarantee") in respect thereof, the Trustee acting directly or through any
Paying Agent shall distribute to Holders of Capital Securities on the record
date therefor, such amounts in proportion to the respective numbers of Preferred
Securities represented by the Capital Securities held by such Holders.
4. Redemptions of Preferred Securities. Whenever the Grantor
shall elect or is required to redeem Preferred Securities in accordance with the
Partnership Agreement, it shall (unless otherwise agreed in writing with the
Trustee) give the Trustee not less than 40 days' prior notice thereof. The
Trustee shall, as directed by the Grantor, mail, with first-class postage
prepaid, notice of the redemption of Preferred Securities and the proposed
simultaneous redemption of the Capital Securities to be redeemed, not less than
30 and not more than 60 days prior to the date fixed for redemption of such
Preferred Securities and Capital Securities. Such notice shall be mailed to the
Holders of the Capital Securities, at the addresses of such Holders as the same
appear on the records of the Trustee. No defect in the notice of redemption or
in the mailing or delivery thereof or publication of its contents shall affect
the validity of the redemption proceedings. In case fewer than all the
outstanding Capital Securities are to be redeemed, the Capital Securities to be
redeemed shall be selected by lot or pro rata (as nearly as may be practicable
without creating fractional shares) or by any other equitable method determined
by the Grantor. On the date of any such redemption of Preferred Securities,
provided that the Grantor (or PECO Energy pursuant to the Guarantee) shall then
have deposited with the Trust the aggregate amount payable upon redemption of
the Preferred Securities to be redeemed, the Trustee, on behalf of the Trust,
shall redeem (using the funds so deposited with it) Capital Securities
representing the same number of Preferred Securities to be redeemed by the
Grantor.
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5. Distributions in Liquidation. Upon receipt by the Trustee
of any distribution from the Grantor upon the liquidation of the Grantor or any
payment under the Guarantee in respect thereof, after satisfaction of creditors
of the Trust required by applicable law, the Trustee shall distribute to Holders
of Capital Securities on the record date therefor, such amounts in proportion to
the respective number of Preferred Securities which were represented by the
Capital Securities held by such Holders.
6. Fixing of Record Date for Holders of Capital Securities.
Whenever any distribution (other than upon any redemption) shall become payable,
or whenever the Trustee shall receive notice of any meeting at which holders of
Preferred Securities are entitled to vote or of which holders of Preferred
Securities are entitled to notice, the Trustee shall in each such instance fix a
record date (which shall be the same date as the record date fixed by the
General Partner with respect to the Preferred Securities) for the determination
of the Holders of Capital Securities who shall be entitled (i) to receive such
distribution or (ii) to receive notice of, and to give instructions for the
exercise of voting rights at, any such meeting.
7. Payment of Distributions. Payments of semiannual
distributions on the Capital Securities shall be payable by wire transfer into
the accounts of or check mailed to the addresses of the Holders thereof on the
record date therefor. Payments of the redemption price of Capital Securities and
distributions in liquidation shall be made against surrender of such Capital
Securities at the office of First Union Trust Company, National Association, as
the Paying Agent.
8. Special Representative; Voting Rights. (a) If the holders
of the Preferred Partner Interests (as defined in the Partnership Agreement),
acting as a single class, are entitled to appoint and authorize a Special
Representative pursuant to Section 13.02(d) of the Partnership Agreement, the
Trustee shall notify the Holders of the Capital Securities of such right,
request direction of each Holder of a Capital Security and vote the Preferred
Securities represented by such Capital Security in accordance with such
direction. If the General Partner fails to convene a general meeting of the
Partnership as required in Section 13.02(d) of the Partnership Agreement, the
Trustee shall notify the Holders of the Capital Securities and, if so directed
by the Holders of Capital Securities representing Preferred Securities
constituting at least 10% of the aggregate stated liquidation preference of the
outstanding Preferred Partner Interests (as defined in the Partnership
Agreement), shall convene such meeting.
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(b) Upon receipt of notice of any meeting at which the holders
of Preferred Securities are entitled to vote, the Trustee shall, as soon as
practicable thereafter, mail to the Holders of Capital Securities a notice,
which shall be provided by the Grantor and which shall contain (i) such
information as is contained in such notice of meeting, (ii) a statement that the
Holders of Capital Securities at the close of business on a specified record
date therefor will be entitled, subject to any applicable provision of law or of
the Partnership Agreement, to instruct the Trustee as to the exercise of the
voting rights pertaining to the amount of Preferred Securities represented by
their respective Capital Securities, and (iii) a brief statement as to the
manner in which such instructions may be given. Upon the written request of a
Holder of a Capital Security on such record date, the Trustee shall vote or
cause to be voted the number of Preferred Securities represented by the Capital
Securities in accordance with the instructions set forth in such request. In the
absence of specific instructions from the Holder of a Capital Security, the
Trustee will abstain from voting to the extent of the Preferred Securities
represented by such Capital Security.
9. Changes Affecting Preferred Securities and
Reclassifications, Recapitalizations, Etc. Upon any consolidation, amalgamation,
merger, replacement or conveyance, transfer or lease by the Grantor of its
properties and assets substantially in their entirety in accordance with Section
13.02(e) of the Partnership Agreement, the Trustee shall, upon the instructions
of the Grantor, treat any Successor Securities or other property that shall be
received by the Trustee in exchange for or upon conversion of or in respect of
the Preferred Securities as part of the Trust Estate, and Capital Securities
then outstanding shall thenceforth represent the proportionate interests of
Holders thereof in the new deposited property so received in exchange for or
upon conversion or in respect of such Preferred Securities.
10. Transfer and Exchange of Capital Securities. Subject to
the terms and conditions of the Trust Agreement, the Trustee shall register the
transfer on its books from time to time of Capital Security certificates upon
any surrender thereof by the Holder in person or by a duly authorized attorney,
properly endorsed or accompanied by a properly executed instrument of transfer
or endorsement, together with evidence of the payment of any transfer taxes as
may be required by law. Upon such surrender, the Trustee shall execute a new
Capital Security representing the same aggregate number of the Capital
Securities surrendered in accordance with the Trust Agreement and deliver the
same to or upon the order of the Person entitled thereto.
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Upon surrender of a Capital Security at the Corporate Office
or such other office as the Trustee may designate for the purpose of effecting
an exchange of Capital Security certificates, subject to the terms and
conditions of the Trust Agreement, the Trustee shall execute and deliver a new
Capital Security certificate representing the same number of Preferred
Securities as the Capital Security certificate surrendered.
As a condition precedent to the registration of a transfer or
exchange of any Capital Security certificate, the Registrar, may require (i) the
production of proof satisfactory to it as to the identity and genuineness of any
signature; and (ii) compliance with such regulations, if any, as the Trustee or
the Registrar may establish not inconsistent with the provisions of the Trust
Agreement.
Neither the Trustee nor the Registrar shall be required (a) to
register the transfer or exchange of any Capital Security certificate for a
period beginning at the opening of business ten days next preceding any
selection of Capital Securities to be redeemed and ending at the close of
business on the day of the mailing of a notice of redemption of Capital
Securities or (b) to transfer or exchange Capital Securities called or being
called for redemption in whole or in part.
11. Title to Capital Securities. It is a condition of the
Capital Securities, and every successive Holder hereof by accepting or holding
the same consents and agrees, that title to this Capital Security certificate,
when properly endorsed or accompanied by a properly executed instrument of
transfer or endorsement, is transferable by delivery with the same effect as in
the case of a negotiable instrument; provided, however, that until the transfer
of this Capital Security certificate shall be registered on the books of the
Trustee, the Trustee may, notwithstanding any notice to the contrary, treat the
Holder hereof at such time as the absolute owner hereof for the purpose of
determining the Person entitled to distributions or to any notice provided for
in the Trust Agreement and for all other purposes.
12. Reports, Inspection of Transfer Books. The Trustee shall
make available for inspection by Holders of Capital Securities at the Corporate
Office and at such other places as it may from time to time deem advisable
during normal business hours any reports and communications received by the
Trustee as the record holder of Preferred Securities. The Registrar shall keep
books at the Corporate Office for the registration of transfer of Capital
Securities, which books at all reasonable times will be open for inspection by
the Holders of Capital Securities as and to the extent provided by applicable
law.
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13. Supplemental Trust Agreement. The Grantor or the General
Partner may, and the Trustee shall, at any time and from time to time, without
the consent of the Holders, enter into one or more agreements supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another partnership, corporation or other
entity to the Grantor or the General Partner and the assumption by any such
successor of the covenants of the Grantor or the General Partner herein
contained; (b) to add to the covenants of the Grantor or the General Partner for
the benefit of the Holders, or to surrender any right or power herein conferred
upon the Grantor or the General Partner; (c)(i) to correct or supplement any
provision herein which may be defective or inconsistent with any other provision
herein or (ii) to make any other provisions with respect to matters or questions
arising under this Trust Agreement, provided that any such action taken under
subsection (ii) hereof shall not materially adversely affect the interests of
the Holders; or (d) to cure any ambiguity or correct any mistake. Any other
amendment or agreement supplemental hereto must be in writing and approved by
Holders of 66-2/3% of the then outstanding Capital Securities.
14. Governing Law. The Trust Agreement and this Capital
Security and all rights thereunder and hereunder and provisions thereof and
hereof shall be governed by, and construed in accordance with, the law of the
State of Delaware without giving effect to principles of conflict of laws.
15. Capital Security Non-Assessable and Fully Paid. Holders of
Capital Securities shall not be personally liable for obligations of the Trust,
the interest in the Trust represented by the Capital Securities shall be
non-assessable for any losses or expenses of the Trust or for any reason
whatsoever and the Capital Securities upon delivery thereof by the Trustee
pursuant to the Trust Agreement are and shall be deemed fully paid.
16. Liability of Holders of Capital Securities. Holders of
Capital Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
17. No Preemptive Rights. No Holder shall be entitled as a
matter of right to subscribe for or purchase, or have any preemptive right with
respect to, any part of any new or additional interest in the Trust, whether now
or hereafter authorized and whether issued for cash or other consideration or by
way of distribution.
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This Capital Security certificate shall not be entitled to any
benefits under the Trust Agreement or be valid or obligatory for any purpose
unless this Capital Security certificate shall have been executed manually or,
if a Registrar for the Capital Securities (other than the Trustee) shall have
been appointed, by facsimile signature of a duly authorized signatory of the
Trustee and, if executed by facsimile signature of the Trustee, shall have been
countersigned manually by such Registrar by the signature of a duly authorized
signatory.
THE TRUSTEE IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY
PREFERRED SECURITIES. THE TRUSTEE ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS
OF THE FOREGOING DESCRIPTION WHICH CAN BE TAKEN AS A STATEMENT OF THE GRANTOR
SUMMARIZING CERTAIN PROVISIONS OF THE TRUST AGREEMENT. THE TRUSTEE MAKES NO
WARRANTIES OR REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF
PREFERRED SECURITIES OR OF CAPITAL SECURITIES; AS TO THE VALIDITY OR SUFFICIENCY
OF THE TRUST AGREEMENT; AS TO THE VALUE OF CAPITAL SECURITIES OR AS TO ANY
RIGHT, TITLE OR INTEREST OF THE HOLDERS OF CAPITAL SECURITIES IN AND TO CAPITAL
SECURITIES.
Dated: April 6, 1998
First Union Trust Company, National
Association, not in its individual
capacity, but solely as Trustee on
behalf of the Trust,
By:________________________________
Name:
Title:
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[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto ____________________ the within Capital Security Certificate and
all rights and interests represented by the Capital Securities evidenced
thereby, and hereby irrevocably constitutes and appoints ____________________
attorney, to transfer the same on the books of the within-named Trustee, with
full power of substitution in the premises.
Dated:_________________ Signature:__________________________________
NOTE: The signature to this
assignment must correspond
with the name as written upon
the face of the Capital
Security in every particular,
without alteration or
enlargement or any change
whatever.
Signature Guarantee:
_______________________
