AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of October 1, 1996, between Delmarva
Power & Light Company, a Delaware and Virginia corporation
("Delmarva Power"), and Delmarva Power Financing I, a Delaware
business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common
Securities (the "Common Securities") to and receive Debentures
from Delmarva Power and to issue its 8.125% Cumulative Trust
Preferred Capital Securities (the "Preferred Securities") with
such powers, preferences and special rights and restrictions as
are set forth in the Amended and Restated Trust Agreement of the
Trust dated as of October 1, 1996 as the same may be amended
from time to time (the "Trust Agreement");
WHEREAS, Delmarva Power is the issuer of the
Debentures;
NOW, THEREFORE, in consideration of the acceptance by
each holder of the Preferred Securities, which acceptance
Delmarva Power hereby agrees shall benefit Delmarva Power and
which acceptance Delmarva Power acknowledges will be made in
reliance upon the execution and delivery of this Agreement,
Delmarva Power, including in its capacity as holder of the Common
Securities, and the Trust hereby agree as follows:
ARTICLE I
SECTION 1.01. ASSUMPTION BY DELMARVA POWER. Subject
to the terms and conditions hereof, Delmarva Power hereby
irrevocably and unconditionally assumes the full payment, when
and as due, of any and all Obligations (as hereinafter defined)
to each person or entity to whom the Trust is now or hereafter
becomes indebted or liable (the "Beneficiaries"). As used
herein, "Obligations" means any indebtedness, expenses or
liabilities of the Trust, other than (a) obligations of the Trust
to pay to holders of any Preferred Securities or other similar
interests in the Trust the amounts due such holders pursuant to
the terms of the Preferred Securities or such other similar
interests, as the case may be, and (b) obligations arising out of
the negligence, willful misconduct or bad faith of the Trustees
of the Trust. This Agreement is intended to be for the benefit
of, and to be enforceable by, all such Beneficiaries, whether or
not such Beneficiaries have received notice hereof.
SECTION 1.02. TERM OF AGREEMENT. This Agreement shall
terminate and be of no further force and effect upon the date on
which there are no Beneficiaries remaining; provided, however,
that this Agreement shall continue to be effective or shall be
reinstated, as the case may be, if at any time any Beneficiary
must restore payment of any sum paid on account of any Obligation
under this Agreement for any reason whatsoever. This Agreement
is continuing, irrevocable, unconditional and absolute.
SECTION 1.03. WAIVER OF NOTICE. Delmarva Power hereby
waives (a) notice of acceptance of this Agreement and of any
Obligation to which it may apply and (b) presentment, demand for
payment, protest, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
SECTION 1.04. NO IMPAIRMENT. The obligations,
covenants, agreements and duties of Delmarva Power under this
Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust
of all or any portion of the Obligations or for the performance
of any other obligation under, arising out of, or in connection
with, the Obligations;
(b) any failure, omission, delay or lack of diligence
on the part of the Beneficiaries to enforce, assert or exercise
any right, privilege, power or remedy conferred on the
Beneficiaries with respect to the Obligations or any action on
the part of the Trust granting indulgence or extension of any
kind; or
(c) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Trust or any of
the assets of the Trust.
Neither the Trust nor any Beneficiary shall have any obligation
to give notice to, or obtain the consent of, Delmarva Power with
respect to the happening of any of the foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce
this Agreement directly against Delmarva Power and Delmarva Power
waives any right or remedy to require that any action be brought
against the Trust or any other person or entity before proceeding
against Delmarva Power.
ARTICLE II
SECTION 2.01. BINDING EFFECT. All of the obligations,
covenants, agreements and duties contained in this Agreement
shall bind the successors, assigns, receivers, trustees and
representatives of Delmarva Power.
SECTION 2.02. AMENDMENT. So long as there shall
remain any Beneficiary or any Preferred Securities outstanding,
this Agreement shall not be modified or amended in any manner
adverse to such Beneficiary or to the holders of the Preferred
Securities.
SECTION 2.03. NOTICES. Any notice, request or other
communication required or permitted to be given hereunder shall
be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or
by registered or certified mail, addressed as follows (and if so
given, shall be deemed given when mailed or upon receipt of an
answer-back, if sent by telex), to wit:
Delmarva Power Financing I
c/o Delmarva Power & Light Company, Treasury Department
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Administrative Trustees
Delmarva Power & Light Company
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Treasurer
SECTION 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).
THIS AGREEMENT is executed as of the day and year first
above written.
DELMARVA POWER & LIGHT COMPANY
By: /s/ X.X. Xxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President,
Treasurer and Chief Financial
Officer
DELMARVA POWER FINANCING I
By: /s/ Xxxxx X. Xxxxx
------------------------------
not in his (her) individual
capacity, but solely as
Administrative Trustee
