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EXHIBIT 4-11
PAYMENT AND GUARANTEE AGREEMENT
THIS PAYMENT AND GUARANTEE AGREEMENT ("Guarantee Agreement"),
dated as of ________________, 1995, is executed and delivered by PECO Energy
Company, a Pennsylvania corporation (the "Guarantor"), for the benefit of the
Holders (as defined below) of the Series B Preferred Securities (as defined
below) of PECO Energy Capital, L.P., a Delaware limited partnership ("PECO
Energy Capital"), the general partner of which is PECO Energy Capital Corp.
(the "General Partner"), a Delaware corporation and a wholly owned subsidiary
of the Guarantor.
WHEREAS, PECO Energy Capital is issuing on the date hereof
$_________________ aggregate stated liquidation preference of limited partner
interests of a series designated the __% Cumulative Monthly Income Preferred
Securities, Series B (the "Series B Preferred Securities"), and the Guarantor
desires to enter into this Guarantee Agreement for the benefit of the Holders,
as provided herein;
WHEREAS, the Guarantor will issue Series B Subordinated
Debentures (as defined below) in accordance with the Indenture (as defined
below) to PECO Energy Capital in an amount equal to the aggregate stated
liquidation preference of the Series B Preferred Securities and the capital
contribution of the General Partner to PECO Energy Capital (the "G.P. Capital
Contribution"); and
WHEREAS, the Guarantor desires to irrevocably and
unconditionally agree to the extent set forth herein to pay to the Holders the
Guarantee Payments (as defined below) and to make certain other undertakings on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and other
consideration, receipt of which is hereby acknowledged, the Guarantor,
intending to be legally bound hereby, agrees as follows:
ARTICLE I
As used in this Guarantee Agreement, each term set forth
below, unless the context otherwise requires, shall have the following meaning.
Each capitalized term used but not otherwise defined herein shall have the
meaning assigned to such term in the Amended and Restated Limited Partnership
Agreement of PECO Energy Capital dated as of July 25, 1994 (as amended from
time to time, the "Limited Partnership Agreement").
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"Guarantee Payments" shall mean the following payments,
without duplication, to the extent not paid by PECO Energy Capital: (i) any
accumulated and unpaid monthly distributions on the Series B Preferred
Securities out of moneys legally available therefor held by PECO Energy
Capital, (ii) the Redemption Price (as defined below) payable with respect to
any Series B Preferred Securities called for redemption by PECO Energy Capital
out of moneys legally available therefor held by PECO Energy Capital, (iii)
upon liquidation of PECO Energy Capital, the lesser of (a) the Liquidation
Distribution (as defined below) and (b) the amount of assets of PECO Energy
Capital available for distribution to the Holders in liquidation of PECO Energy
Capital, and (iv) a cash distribution at the rate of 7.96% per annum of the
stated liquidation preference of $25 per Series B Preferred Security
accumulating from November 1, 1995 through but not including , 1995.
"Holders" shall mean the persons or entities in whose name any
Series B Preferred Securities are registered on the registration books
maintained by PECO Energy Capital; provided, however, that in determining
whether the Holders of the requisite percentage of Series B Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any entity owned more than 50% by
the Guarantor, either directly or indirectly.
"Indenture" shall mean the Indenture, dated as of July 1,
1994 (the "Original Indenture"), as supplemented by the Supplemental Indenture,
between the Guarantor and Meridian Trust Company, pursuant to which the
Guarantor has issued and will issue its Deferrable Interest Subordinated
Debentures in series.
"Liquidation Distribution" shall mean the aggregate of the
stated liquidation preference of $25 per Series B Preferred Security and all
accumulated and unpaid distributions to the date of payment.
"Preferred Trust Receipts" shall mean the trust receipts
issued by the Trust each representing a Series B Preferred Security.
"Redemption Price" shall mean the aggregate of $25 per Series
B Preferred Security and all accumulated and unpaid distributions to the date
fixed for redemption.
"Special Representative" shall mean any representative of the
Holders appointed pursuant to Section 13.02(d) of the Limited Partnership
Agreement.
"Supplemental Indenture" shall mean the First Supplemental
Indenture, dated as of ________, 1995, between the Guarantor and Meridian Trust
Company, pursuant to which the Guarantor has issued its __% Deferrable Interest
Subordinated Debentures, Series B (the "Series B Subordinated Debentures") in
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an amount equal to the aggregate stated liquidation preference of the Series B
Preferred Securities and the G.P. Capital Contribution.
"Trust" shall mean PECO Energy Capital Trust I, a Delaware
business trust.
"Trust Agreement" shall mean the Amended and Restated Trust
Agreement of PECO Energy Capital Trust I, as amended from time to time, among
PECO Energy Capital, L.P., as Grantor and PNC Bank, Delaware, as Trustee,
dated as of _______, 1995.
"Trustee" shall mean PNC Bank, Delaware or a successor trustee
under the Trust Agreement.
ARTICLE II
SECTION 2.01. The Guarantor hereby irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments, as
and when due (except to the extent paid by PECO Energy Capital), to the fullest
extent permitted by law, regardless of any defense, right of set-off or
counterclaim which the Guarantor may have or assert against PECO Energy
Capital, the General Partner, the Trust or the Trustee. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment by
the Guarantor to the Holders or by payment of such amounts by PECO Energy
Capital to the Holders. Notwithstanding anything to the contrary herein, the
Guarantor retains all of its rights under Section 4.01(b) of the Indenture
to extend the interest payment period on the Series B Subordinated
Debentures and the Guarantor shall not be obligated hereunder to pay during an
Extension Period any monthly distributions on the Series B Preferred Securities
which are not paid by PECO Energy Capital during such Extension Period.
SECTION 2.02. The Guarantor hereby waives notice of
acceptance of this Guarantee Agreement and of any liability to which it applies
or may apply, presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
SECTION 2.03. Except as otherwise set forth herein, the
obligations, covenants, agreements and duties of the Guarantor under this
Guarantee Agreement shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by PECO Energy Capital of any
express or implied agreement, covenant, term or condition relating to the
Series B Preferred Securities to be performed or observed by PECO Energy
Capital;
(b) the extension of time for the payment by PECO
Energy Capital of all or any portion of the distributions,
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Redemption Price, Liquidation Distribution or any other sums payable under the
terms of the Series B Preferred Securities or the extension of time for the
performance of any other obligation under, arising out of, or in connection
with, the Series B Preferred Securities;
(c) any failure, omission, delay or lack of
diligence on the part of the Holders or the Special Representative to enforce,
assert or exercise any right, privilege, power or remedy conferred on the
Holders or the Special Representative pursuant to the terms of the Series B
Preferred Securities, or any action on the part of PECO Energy Capital granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, PECO Energy Capital or any of the
assets of PECO Energy Capital;
(e) any invalidity of, or defect or deficiency
in, any of the Series B Preferred Securities; or
(f) the settlement or compromise of any
obligation guaranteed hereby or hereby incurred.
There shall be no obligation to the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the occurrence of any of the
foregoing.
SECTION 2.04. The Guarantor expressly acknowledges that (i)
this Guarantee Agreement will be deposited with the General Partner to be held
for the benefit of the Holders; (ii) in the event of the appointment of a
Special Representative, the Special Representative may enforce this Guarantee
Agreement for such purpose; (iii) if no Special Representative has been
appointed, the General Partner has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iv) the holders of Preferred Trust
Receipts, together with the holders of the Series B Preferred Securities other
than the Trust, representing not less than 10% in aggregate stated liquidation
preference of the Series B Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available in
respect of this Guarantee Agreement including the giving of directions to the
General Partner or the Special Representative as the case may be; and (v) if
the General Partner or the Special Representative fails to enforce this
Guarantee Agreement as above provided, any holder of Preferred Trust Receipts,
together with the holders of the Series B Preferred Securities other than the
Trust, representing Series B Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Guarantee
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Agreement, without first instituting a legal proceeding against PECO Energy
Capital or any other person or entity.
SECTION 2.05. This is a guarantee of payment and not of
collection. The General Partner or Special Representative may enforce this
Guarantee Agreement directly against the Guarantor, and the Guarantor will
waive any right or remedy to require that any action be brought against PECO
Energy Capital or any other person or entity before proceeding against the
Guarantor. The Guarantor agrees that this Guarantee Agreement shall not be
discharged except by payment of the Guarantee Payments in full (to the extent
not paid by PECO Energy Capital) and by complete performance of all obligations
of the Guarantor contained in this Guarantee Agreement.
SECTION 2.06. The Guarantor will be subrogated to all rights
of the Holders against PECO Energy Capital in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement and shall have the
right to waive payment by PECO Energy Capital pursuant to Section 2.01;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of a payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts remain due and unpaid under this Guarantee Agreement.
If any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to pay over such amount to the Holders.
SECTION 2.07. The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of PECO Energy Capital with
respect to the Series B Preferred Securities and that the Guarantor shall be
liable as principal and sole debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (f), inclusive,
of Section 2.03 hereof.
ARTICLE III
SECTION 3.01. So long as any Series B Preferred Securities
remain outstanding, neither the Guarantor nor any majority-owned subsidiary of
the Guarantor shall declare or pay any dividend on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
(other than dividends by a wholly owned subsidiary) if at such time the
Guarantor shall be in default with respect to its payment or other obligations
hereunder or there shall have occurred any event that, with the giving of
notice or the lapse
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of time or both, would constitute an Event of Default under the Indenture. The
Guarantor shall take all actions necessary to ensure the compliance of its
subsidiaries with this Section 3.01.
SECTION 3.02. So long as any Series B Preferred Securities
are outstanding, the Guarantor agrees to maintain its corporate existence;
provided that the Guarantor may consolidate with or merge with or into, or
sell, convey, transfer or lease all or substantially all of its assets (either
in one transaction or a series of transactions) to, any person, corporation,
partnership, limited liability company, joint venture association, joint stock
company, trust or unincorporated association if such entity formed by or
surviving such consolidation or merger or to which such sale, conveyance,
transfer or lease shall have been made, if other than the Guarantor, (i) is
organized and existing under the laws of the United States of America or any
state thereof or the District of Columbia, and (ii) shall expressly assume all
the obligations of the Guarantor under this Guarantee Agreement.
SECTION 3.03. This Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank subordinate and junior in
right of payment to all general liabilities of the Guarantor.
ARTICLE IV
This Guarantee Agreement shall terminate and be of no further
force and effect upon full payment of the Redemption Price of all Series B
Preferred Securities or upon full payment of the amounts payable to the Holders
upon liquidation of PECO Energy Capital; provided, however, that this Guarantee
Agreement shall continue to be effective or shall be reinstated, as the case
may be, if at any time the Holders must restore payments of any sums paid under
the Series B Preferred Securities or under this Guarantee Agreement for any
reason whatsoever.
ARTICLE V
SECTION 5.01. All guarantees and agreements contained in this
Guarantee Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders.
Except as provided in Section 3.02, the Guarantor may not assign its
obligations hereunder without the prior approval of the Holders of not less
than 66 2/3% of the aggregate stated liquidation preference of all Series B
Preferred Securities then outstanding.
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SECTION 5.02. This Guarantee Agreement may only be amended by
a written instrument executed by the Guarantor; provided that, so long as any
of the Series B Preferred Securities remain outstanding, any amendment that
materially adversely affects the Holders, any termination of this Guarantee
Agreement and any waiver of compliance with any covenant hereunder shall be
effected only with the prior approval of the holders of Preferred Trust
Receipts, together with the holders of Series B Preferred Securities other than
the Trust, representing not less than 66 2/3% of the aggregate liquidation
preference of all Series B Preferred Securities then outstanding.
SECTION 5.03. All notices, requests or other communications
required or permitted to be given hereunder to the Guarantor shall be deemed
given if in writing and delivered personally or by recognized overnight courier
or express mail service or by facsimile transmission (confirmed in writing) or
by registered or certified mail (return receipt requested), addressed to the
Guarantor at the following address (or at such other address as shall be
specified by like notice to the Holders):
PECO Energy Company
0000 Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Treasurer
All notices, requests or other communications required or
permitted to be given hereunder to the Holders shall be deemed given if in
writing and delivered by the Guarantor in the same manner as notices sent by
PECO Energy Capital to the Holders.
SECTION 5.04. This Guarantee Agreement is solely for the
benefit of the Holders and is not separately transferable from the Series B
Preferred Securities.
SECTION 5.05. This Guarantee Agreement shall be governed by
and construed and interpreted in accordance with the laws of the Commonwealth
of Pennsylvania without giving effect to the conflict of law principles
thereof.
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THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
PECO ENERGY COMPANY
By:
-----------------------------------
Name:
Title:
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