EXHIBIT 4-G
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AMENDED AND RESTATED TRUST AGREEMENT, DATED AS OF OCTOBER 1, 1998, BY AND AMONG
ATLANTIC CITY ELECTRIC COMPANY, AS DEPOSITOR, THE BANK OF NEW YORK, AS PROPERTY
TRUSTEE, THE BANK OF NEW YORK (DELAWARE) AS DELAWARE TRUSTEE AND THE
ADMINISTRATIVE TRUSTEES NAMED THEREIN
AMENDED AND RESTATED
TRUST AGREEMENT
among
ATLANTIC CITY ELECTRIC COMPANY, as Depositor
and
THE BANK OF NEW YORK,
as Property Trustee,
and THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as Trustees
and the several Holders
Dated as of October 1, 1998
ATLANTIC CAPITAL II
Atlantic Capital II
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
------------------- ------------------
Section 310(a)(1).................................... 8.07
(a)(2)....................................... 8.07
(a)(3)....................................... 8.09
(a)(4)....................................... Not Applicable
(b).......................................... 8.08
Section 311(a)....................................... 8.13
(b).......................................... 8.13
Section 312(a)....................................... 5.07
(b).......................................... 5.07
(c).......................................... 5.07
Section 313(a)....................................... 8.14(a)
(a)(4)....................................... 8.14(b)
(b).......................................... 8.14(b)
(c).......................................... 8.14(a)
(d).......................................... 8.14(a), 8.14(b)
Section 314(a)....................................... 8.15
(a)(4)....................................... Not Applicable
(c).......................................... 8.16
(d).......................................... Not Applicable
(e).......................................... 1.01
Section 315(a)....................................... 8.01
(b).......................................... 8.02
(c).......................................... 8.01(a)
(d).......................................... 8.01, 8.03
(e).......................................... Not Applicable
Section 316(a)....................................... Not Applicable
(a)(1)(A).................................... Not Applicable
(a)(1)(B).................................... Not Applicable
(a)(2)....................................... Not Applicable
(b).......................................... Not Applicable
(c).......................................... Not Applicable
Section 317(a)(1).................................... Not Applicable
(a)(2)....................................... Not Applicable
(b).......................................... 5.09
Section 318(a)....................................... 10.09
--------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Trust Agreement.
TABLE OF CONTENTS
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ARTICLE I. Defined Terms
Section 1.01. Definitions............................... 2
ARTICLE II. Establishment of the Trust; Issuance of Trust Securities; Rights of
Securityholders
Section 2.01. Name...................................... 11
Section 2.02. Office of the Delaware Trustee; Principal
Place of Business........................ 11
Section 2.03. Initial Contribution of Trust Property;
Initial Ownership; Organizational
Expenses................................ 11
Section 2.04. Issuance of the Preferred Securities...... 11
Section 2.05. Subscription and Purchase of Debentures;
Issuance of the Common Securities........ 12
Section 2.06. Declaration of Trust; Appointment of
Additional Administrative Trustees....... 12
Section 2.07. Authorization to Enter into Certain
Transactions............................. 12
Section 2.08. Assets of Trust........................... 16
Section 2.09. Title to Trust Property................... 16
Section 2.10. Rights of Securityholders................. 16
ARTICLE III. Payment Account
Section 3.01. Payment Account........................... 16
ARTICLE IV. Distributions; Redemption
Section 4.01. Distributions............................. 18
Section 4.02. Redemption................................ 18
Section 4.03. Subordination of Common Securities........ 20
Section 4.04. Payment Procedures........................ 21
Section 4.05. Tax Returns and Reports................... 21
Section 4.06. Payments under Subordinated Indenture..... 21
ARTICLE V. Trust Securities Certificates
Section 5.01. The Trust Securities Certificates......... 22
Section 5.02. Ownership of Common Securities by
Depositor................................ 22
Section 5.03. Registration of Transfer and Exchange of
Preferred Securities Certificates........ 22
Section 5.04. Mutilated, Destroyed, Lost or Stolen
Trust Securities Certificates............ 24
Section 5.05. Cancellation by Registrar................. 24
Section 5.06. Persons Deemed Securityholders............ 24
Section 5.07. Lists of Holders.......................... 24
Section 5.08. Maintenance of Office or Agency........... 25
Section 5.09. Appointment of Paying Agent............... 25
Section 5.10. Book-Entry System......................... 25
ARTICLE VI. Acts of Securityholders; Meetings; Voting
Section 6.01. Limitations on Voting Rights.............. 26
Section 6.02. Notice of Meetings........................ 27
Section 6.03. Meetings of Holders of Preferred
Securities............................... 27
Section 6.04. Voting Rights............................. 27
Section 6.05. Proxies, etc.............................. 28
Section 6.06. Securityholder Action by Written Consent.. 28
Section 6.07. Record Date for Voting.................... 28
Section 6.08. Acts of Securityholders................... 28
Section 6.09. Inspection of Records..................... 29
ARTICLE VII. Representations and Warranties of the Property Trustee and
the Delaware Trustee
Section 7.01. Property Trustee.......................... 30
Section 7.02. Delaware Trustee.......................... 30
ARTICLE VIII. The Trustees
Section 8.01. Certain Duties and Responsibilities....... 31
Section 8.02. Certain Notices........................... 33
Section 8.03. Certain Rights of Property Trustee........ 34
Section 8.04. Not Responsible for Recitals or Issuance
of Securities............................ 36
Section 8.05. May Hold Securities....................... 36
Section 8.06. Compensation; Fees; Indemnity............. 36
Section 8.07. Certain Trustees Required; Eligibility.... 38
Section 8.08. Conflicting Interests..................... 38
Section 8.09. Co-Trustees and Separate Trustee.......... 39
Section 8.10. Resignation and Removal; Appointment of
Successor................................ 40
Section 8.11. Acceptance of Appointment by Successor.... 42
Section 8.12. Merger, Conversion, Consolidation or
Succession to Business................... 42
Section 8.13. Preferential Collection of Claims Against
Depositor or Trust....................... 42
Section 8.14. Reports by Property Trustee............... 43
Section 8.15. Reports to the Property Trustee........... 43
Section 8.16. Evidence of Compliance With Conditions
Precedent................................ 43
Section 8.17. Number of Trustees........................ 43
Section 8.18. Delegation of Power....................... 44
Section 8.19. Fiduciary Duty............................ 44
ARTICLE IX. Termination and Liquidation
Section 9.01. Termination Upon Expiration Date.......... 46
Section 9.02. Early Termination......................... 46
Section 9.03. Termination............................... 46
Section 9.04. Liquidation............................... 46
Section 9.05. Mergers, Consolidations, Amalgamations or
Replacements of the Trust................ 49
ARTICLE X. Miscellaneous Provisions
Section 10.01. Limitation of Rights of Securityholders.. 50
Section 10.02. Amendment................................ 50
Section 10.03. Separability............................. 52
Section 10.04. Governing Law............................ 52
Section 10.05. Successors............................... 52
Section 10.06. Headings................................. 52
Section 10.07. Notice and Demand........................ 52
Section 10.08. Agreement Not to Petition................ 53
Section 10.09. Conflict with Trust Indenture Act........ 53
AMENDED AND RESTATED TRUST AGREEMENT, dated as of October 1, 1998,
among (i) Atlantic City Electric Company, a New Jersey corporation (the
"Depositor"), (ii) The Bank of New York, a New York banking corporation duly
organized and existing under the laws of New York, as trustee (the "Property
Trustee"), (iii) The Bank of New York (Delaware), a Delaware banking corporation
duly organized and existing under the laws of Delaware, as Delaware trustee (the
"Delaware Trustee"), and (iv) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, each an
individual, as trustee, and each of whose address is c/o Atlantic City Electric
Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (each, an "Administrative
Trustee" and, collectively, the "Administrative Trustees") (the Property
Trustee, the Delaware Trustee and the Administrative Trustees being hereinafter
referred to collectively as the "Trustees") and the several Holders, as
hereinafter defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Depositor, the Property Trustee, the Delaware Trustee and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Administrative Trustee, have heretofore duly declared and
established a business trust pursuant to the Delaware Business Trust Act by the
entering into of that certain Trust Agreement, dated as of September 10, 1998
(the "Original Trust Agreement"), and by the execution by the Delaware Trustee,
the Property Trustee and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Administrative Trustee and filing
with the Secretary of State of the State of Delaware of the Certificate of
Trust, dated September 10, 1998 (the "Certificate of Trust"), a copy of which is
attached as Exhibit A; and
WHEREAS, the Depositor, the Property Trustee, the Delaware Trustee and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Administrative Trustee, desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the acquisition by the Trust from the Depositor of all
of the right, title and interest in the Debentures, (ii) the issuance of the
Common Securities by the Trust to the Depositor, (iii) the issuance of the
Preferred Securities by the Trust and (iv) the appointment of an additional
Administrative Trustee of the Trust;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
1
ARTICLE I.
Defined Terms
SECTION I.01. DEFINITIONS. For all purposes of this Trust Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Administrative Trustee" means each of the individuals identified as
an "Administrative Trustee" in the preamble to this Trust Agreement, solely in
their capacities as Administrative Trustees of the Trust created hereunder and
not in their individual capacities, or any successor trustee appointed as herein
provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
2
"Bankruptcy Event" means, with respect to any Person:
(i) the entry of a decree or order by a court having jurisdiction
in the premises judging such Person a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement,
adjudication or composition of or in respect of such Person under Federal
bankruptcy law or any other applicable Federal or State law, or appointing
a receiver, liquidator, assignee, trustee sequestrator or other similar
official of such Person or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance
of any such decree or order unstayed and in effect for a period of 60
consecutive days; or
(ii) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or of the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or
relief under Federal bankruptcy law or any other applicable Federal or
State law, or the consent by it to the filing of such petition or to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator or
similar official of such Person or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due.
"Bankruptcy Laws" has the meaning specified in Section 10.08.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors or a duly authorized committee thereof and
to be in full force and effect on the date of such certification, and delivered
to the appropriate Trustee.
"Business Day" means a day other than (a) a Saturday or a Sunday, (b)
a day on which banks in New York, New York are authorized or obligated by law or
executive order to remain closed and (c) a day on which either the Corporate
Trust Office or the Debenture Trustee's principal corporate trust office is
closed for business.
"Certificate of Trust" has the meaning specified in the preamble to
this Trust Agreement.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Closing Date" means the date of delivery of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
3
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Security" means an undivided beneficial ownership interest in
the assets of the Trust having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit B.
"Corporate Trust Office" means the principal corporate trust office of
the Property Trustee located in New York, New York, which at the date hereof is
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Covered Person" means: (a) any officer, director, shareholder,
partner, beneficial owner, member, representative, employee or agent of the
Trust or the Trust's Affiliates; and (b) any Securityholder.
"Debenture Event of Default" means an "Event of Default" as defined in
the Subordinated Indenture.
"Debenture Issuer" means Atlantic City Electric Company, a New Jersey
corporation, in its capacity as issuer of the Debentures.
"Debenture Redemption Date" means "Redemption Date" as defined in the
Subordinated Indenture.
"Debenture Trustee" means Wilmington Trust Company, as trustee under
the Subordinated Indenture.
"Debentures" means the $25,773,200 aggregate principal amount of the
Debenture Issuer's 7% Junior Subordinated Debentures, Series I, Due 2028,
issued pursuant to the Subordinated Indenture.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
-- ---
to time.
"Delaware Trustee" means the banking corporation identified as the
"Delaware Trustee" in the preamble to this Trust Agreement solely in its
capacity as Delaware Trustee of the Trust and not in its individual capacity, or
its successor in interest in such capacity, or any successor trustee appointed
as herein provided.
4
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.01(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
"Early Termination Event" has the meaning specified in Section 9.02.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of a Debenture Event of Default; or
(ii) default by the Trust or the Property Trustee in the
payment of any Distribution when it becomes due and payable, and
continuation of such default for a period of 30 days; or
(iii) default by the Trust or the Property Trustee in the
payment of any Redemption Price when it becomes due and payable; or
(iv) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this Trust
Agreement (other than a covenant or warranty a default in whose performance
or breach is specifically dealt with in clause (ii) or (iii), above) and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the Property Trustee by
the Holders of at least 25% in Liquidation Amount of the Outstanding
Preferred Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(v) the occurrence of a Bankruptcy Event with respect to the
Trust or the Property Trustee if a successor Property Trustee has not been
appointed within 90 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expiration Date" means December 31, 2043.
"Guarantee" means the Guarantee Agreement executed and delivered by
the Depositor and The Bank of New York, a New York banking corporation, as
trustee, contemporaneously with the execution and delivery of this Trust
Agreement, for the benefit of the Holders of the Preferred Securities, as
amended from time to time.
5
"Holder" has the meaning specified in the definition of
"Securityholder."
"Indemnified Person" means any Trustee, any Affiliate of any Trustee,
any officer, director, shareholder, member, partner, employee, representative or
agent of any Trustee, or any employee or agent of the Trust or its Affiliates.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Investment Company Event" means the occurrence of a change in law or regulation
or a change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority to the
effect that the Trust is or will be considered an "investment company" that is
required to be registered under the Investment Company Act, which change in law
becomes effective on or after the date of original issuance of the Preferred
Securities.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means, as the context requires, (i) Trust Securities
having a Liquidation Amount equal to the principal amount of Debentures at any
time to be repaid, whether at stated maturity or upon maturity by earlier
acceleration, redemption or otherwise and (ii) Debentures having a principal
amount equal to the Liquidation Amount of the Trust Securities with respect to
which such Debentures are to be distributed.
"Liquidation Amount" means the stated amount of $25 per Trust
Security.
"Liquidation Date" means the date on which Debentures are to be
distributed to Securityholders in connection with a termination and liquidation
of the Trust pursuant to Section 9.04(a).
"Liquidation Distribution" has the meaning specified in Section
9.04(e).
"No Recognition Opinion" means an opinion of nationally recognized
independent tax counsel experienced in such matters, which opinion may rely on
any then applicable published revenue rulings of the Internal Revenue Service,
to the effect that the Holders of the Preferred Securities will not recognize
any gain or loss for United States federal income tax purposes as a result of
the termination of the Trust and distribution of the Debentures.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board, the President, a Vice President, the Treasurer or an Assistant
Treasurer of the Depositor, and delivered to the appropriate Trustee. Any
Officer's Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
6
(a) a statement that the officer signing the Officer's Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the Officer's
Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, but not an
employee of the Trust, the Property Trustee or the Depositor, and who shall be
reasonably acceptable to the Property Trustee. Any Opinion of Counsel delivered
with respect to compliance with a condition or covenant provided for in this
Trust Agreement shall include statements comparable to the statements referred
to in the definition of "Officers' Certificate" herein.
"Original Trust Agreement" has the meaning specified in the recitals
to this Trust Agreement.
"Outstanding," when used with respect to Preferred Securities, means,
as of the date of determination, all Preferred Securities theretofore delivered
under this Trust Agreement, except:
(i) Preferred Securities theretofore canceled by the
Administrative Trustees or delivered to the Administrative Trustees for
cancellation;
(ii) Preferred Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Property
Trustee or any Paying Agent for the Holders of such Preferred Securities;
provided, however, that, if such Preferred Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this Trust
Agreement; and
(iii) Preferred Securities in exchange for or in lieu of which
other Preferred Securities have been delivered pursuant to this Trust
Agreement, including pursuant to Sections 5.03 or 5.04;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be
7
Outstanding, except that (a) in determining whether any Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Preferred Securities which such Trustee knows to
be so owned shall be so disregarded and (b) the foregoing shall not apply at any
time when all of the outstanding Preferred Securities are owned by the
Depositor, one or more of the Trustees and/or any such Affiliate. Preferred
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Administrative
Trustees the pledgee's right so to act with respect to such Preferred Securities
and that the pledgee is not the Depositor or any Affiliate of the Depositor.
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.09 and initially shall be The Bank of New York.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee at The Bank of New York, or
such other banking institution as the Depositor shall select, for the benefit of
the Securityholders in which all amounts paid in respect of the Debentures will
be held and from which the Paying Agent, pursuant to Section 5.09, shall make
payments to the Securityholders in accordance with Sections 4.01 and 4.02.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial ownership interest
in the assets of the Trust designated as a "7% Cumulative Trust Preferred
Capital Security" having a Liquidation Amount of $25 and having rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as Exhibit
C.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor trustee appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided, however, that each Debenture Redemption Date and Maturity
(as defined in the Subordinated Indenture) of the Debentures shall be a
Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Redemption Date of any
Trust Security, the Liquidation Amount of such Trust Security, plus accumulated
and unpaid Distributions thereon to the Redemption Date.
8
"Registrar" shall mean the registrar for the Preferred Securities
appointed by the Trust and shall be initially The Bank of New York.
"Responsible Officer," when used with respect to the Property Trustee
means an officer of the Property Trustee assigned by the Property Trustee to
administer its corporate trust matters.
"Securities Depository" shall be The Depository Trust Company, or a
successor thereto.
"Securities Register" shall mean the Securities Register described in
Section 5.03.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Business Trust Act.
"Special Event" means either a Tax Event or an Investment Company
Event.
"Subordinated Indenture" means the Indenture, dated as of October 1,
1998, between the Depositor and the Debenture Trustee, as amended or
supplemented from time to time.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein or as a result of any administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or which pronouncement,
action or decision is announced on or after the date of issuance of the
Preferred Securities under this Trust Agreement, there is more than an
insubstantial risk that at such time or within 90 days of the date thereof (i)
the Trust is, or will be, subject to United States federal income tax with
respect to income received or accrued on the Debentures, (ii) interest payable
by the Depositor on the Debentures is not, or will not be, fully deductible by
the Depositor for United States federal income tax purposes, or (iii) the Trust
is, or will be, subject to more than a de minimis amount of other taxes, duties
or other governmental charges.
"Transfer Agent" shall mean one or more transfer agents for the
Preferred Securities appointed by the Administrative Trustees on behalf of the
Trust and shall be initially The Bank of New York.
"Trust" means the Delaware business trust created by the Original
Trust Agreement and continued hereby and identified on the cover page to this
Trust Agreement.
9
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto and the provisions
of the Trust Indenture Act that are deemed to be a part of and govern this
Amended and Restated Trust Agreement and any such modification, amendment or
supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trust Property" means (i) the Debentures, (ii) any cash on deposit
in, or owing to, the Payment Account and (iii) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held by the Property Trustee pursuant to the trusts of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
October 28, 1998, among the Trust, the Depositor and the underwriters named
therein.
10
ARTICLE II.
Establishment of the Trust; Issuance of
TRUST SECURITIES; RIGHTS OF SECURITYHOLDERS
SECTION II.01. NAME. The Trust created hereby shall be known as
"Atlantic Capital II" in which name the Trustees may conduct the business of the
Trust, make and execute contracts and other instruments on behalf of the Trust
and ▇▇▇ and be sued.
SECTION II.02. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF
BUSINESS. The office of the Delaware Trustee in the State of Delaware is ▇/▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ (Delaware), ▇▇▇▇▇ ▇▇▇▇ Center, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, or at such other address in Delaware as the Delaware Trustee may
designate by written notice to the Securityholders and the Depositor. The
principal place of business of the Trust is c/o Atlantic City Electric Company,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION II.03. INITIAL CONTRIBUTION OF TRUST PROPERTY; INITIAL
OWNERSHIP; ORGANIZATIONAL EXPENSES. The Property Trustee acknowledges receipt
in trust from the Depositor in connection with the Original Trust Agreement of
the sum of $10, which constituted the initial Trust Property. Upon the creation
of the Trust by such contribution and until the issuance of the Trust
Securities, and at any time during which no Trust Securities are outstanding,
the Depositor shall be the sole beneficial owner of the Trust. Pursuant to the
Subordinated Indenture, the Debenture Issuer, as borrower, shall pay
organizational expenses of the Trust as they arise or shall, upon request of any
Trustee, promptly reimburse such Trustee for any such expenses paid by such
Trustee. The Depositor shall make no claim upon the Trust Property for the
payment of such expenses.
SECTION II.04. ISSUANCE OF THE PREFERRED SECURITIES. The Depositor
and an Administrative Trustee, on behalf of the Trust, executed and delivered
the Underwriting Agreement. Contemporaneously with the execution and delivery
of this Trust Agreement, one of the Administrative Trustees, on behalf of the
Trust in accordance with Section 5.01, executed manually and delivered a
Preferred Securities Certificate, registered in the name of the nominee of the
Securities Depository, evidencing 1,000,000 Preferred Securities having an
aggregate Liquidation Amount of $25,000,000, against receipt of the purchase
price of such Preferred Securities of $25,000,000, which amount such
Administrative Trustee shall promptly deliver to the Property Trustee.
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SECTION II.05. SUBSCRIPTION AND PURCHASE OF DEBENTURES; ISSUANCE OF THE COMMON
SECURITIES. Contemporaneously with the execution and delivery of this Trust
Agreement, one of the Administrative Trustees, on behalf of the Trust, shall
execute and deliver to the Depositor a Common Securities Certificate, registered
in the name of the Depositor, evidencing 30,928 Common Securities having an
aggregate Liquidation Amount of $773,200, against receipt of the purchase price
of such Common Securities of $773,200. The Administrative Trustees, on behalf
of the Trust, shall subscribe to and purchase from the Depositor Debentures,
registered in the name of the Property Trustee, in an aggregate principal amount
of $25,773,200, and, in satisfaction of the purchase price for such Debentures,
the Property Trustee, on behalf of the Trust, shall deliver to the Depositor the
sum of $25,773,200, representing the proceeds from the sale of the Trust
Securities.
SECTION II.06. DECLARATION OF TRUST; APPOINTMENT OF ADDITIONAL
ADMINISTRATIVE TRUSTEES. The exclusive purposes and functions of the Trust are
(i) to issue Trust Securities and invest the proceeds thereof in Debentures, and
(ii) to receive payments to be made with respect to the Debentures and disburse
such payments in accordance with the terms hereof, and (iii) to engage in those
activities necessary or incidental thereto. The Depositor hereby appoints the
Trustees as trustees of the Trust, to have all the rights, powers and duties to
the extent set forth herein. The Property Trustee hereby declares that it will
hold the Trust Property in trust upon and subject to the conditions set forth
herein for the benefit of the Securityholders. The Trustees shall have all
rights, powers and duties set forth herein and in accordance with applicable law
with respect to accomplishing the purposes of the Trust.
SECTION II.07. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS. (a)
The Trustees shall conduct the affairs of the Trust in accordance with the terms
of this Trust Agreement. Subject to the limitations set forth in paragraph (b)
of this Section 2.07 and Article VIII and in accordance with the following
provisions (i) and (ii), the Trustees shall have the authority to enter into all
transactions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, the Administrative Trustees, acting
singly or jointly, shall have the power, duty and authority to act on
behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) without the consent of any Person, the causing of the Trust
to enter into and to execute, deliver and perform on behalf of the
Trust such agreements or other documents as may be necessary or
desirable in connection with the consummation of the Underwriting
Agreement;
(C) the collection of interest, principal and any other payments
made in respect of the Debentures in the Payment Account;
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(D) the registration of the Preferred Securities under the
Securities Act of 1933, as amended, and under state securities or blue
sky laws, and the qualification of this Trust Agreement as a trust
indenture under the Trust Indenture Act;
(E) the listing of the Preferred Securities upon such securities
exchange or exchanges as shall be determined by the Depositor and the
registration of the Preferred Securities under the Exchange Act, and
the preparation and filing of all periodic and other reports and other
documents pursuant to the foregoing;
(F) the appointment of a Paying Agent, a Transfer Agent and a
Registrar in accordance with this Trust Agreement;
(G) the registration of transfers of the Trust Securities in
accordance with this Trust Agreement; and
(H) the taking of any action incidental to the foregoing as the
Administrative Trustees may from time to time determine is necessary
or advisable to protect and conserve the Trust Property for the
benefit of the Securityholders (without consideration of the effect of
any such action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect to the
following ministerial matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the deposit of interest, principal and any other payments
made in respect of the Debentures in the Payment Account;
(D) the distribution of amounts owed to the Securityholders in
respect of the Trust Securities in accordance with the terms of this
Trust Agreement;
(E) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the
Securityholders in accordance with the terms of this Trust Agreement;
(F) the distribution of the Trust Property in accordance with the
terms of this Trust Agreement;
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(G) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the execution of
the certificate of cancellation to be prepared and filed by the
Administrative Trustees with the Secretary of State of the State of
Delaware; and
(H) the taking of any ministerial action incidental to the
foregoing as the Property Trustee may from time to time determine is
necessary or advisable to protect and conserve the Trust Property for
the benefit of the Securityholders (without consideration of the
effect of any such action on any particular Securityholder).
Subject to this Section 2.07(a)(ii), the Property Trustee shall have none of the
duties, liabilities, powers or authority of the Administrative Trustees set
forth in Section 2.07(a)(i) or the Depositor set forth in Section 2.07(c). The
Property Trustee shall have the power and authority to exercise all of the
rights, powers and privileges of a holder of Debentures under the Subordinated
Indenture and, if an Event of Default occurs and is continuing, the Property
Trustee may, for the benefit of Holders of the Trust Securities, in its
discretion proceed to protect and enforce its rights as holder of the Debentures
subject to the rights of the Holders pursuant to the terms of this Trust
Agreement.
(b) The Trust (or the Trustees acting on behalf of the Trust) shall
not undertake any business, activities or transaction except as expressly
provided herein or contemplated hereby. In particular, the Trustees shall not
(i) acquire any investments or engage in any activities not authorized by this
Trust Agreement, (ii) sell, assign, transfer, exchange, pledge, set-off or
otherwise dispose of any of the Trust Property or interests therein, including
to Securityholders, except as expressly provided herein, (iii) take any action
that would cause the Trust to fail or cease to qualify as a "grantor trust" for
United States federal income tax purposes, (iv) incur any indebtedness for
borrowed money or (v) take or consent to any action that would result in the
placement of a Lien on any of the Trust Property. The Trustees shall defend all
claims and demands of all Persons at any time claiming any Lien on any of the
Trust Property adverse to the interest of the Trust or the Securityholders in
their capacity as Securityholders.
(c) In connection with the issuance of the Preferred Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) to prepare for filing by the Trust with the Commission and
to execute a registration statement on Form S-3 in relation to the
Preferred Securities, including any amendments thereto;
14
(ii) to determine the states in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which must
be taken by or on behalf of the Trust, and advise the Trustees of actions
they must take on behalf of the Trust, and prepare for execution and filing
any documents to be executed and filed by the Trust or on behalf of the
Trust, as the Depositor deems necessary or advisable in order to comply
with the applicable laws of any such states;
(iii) to prepare for filing by the Trust an application to the
New York Stock Exchange, any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities and to file or cause the Administrative Trustees to file
thereafter with such exchange such notifications and documents as may be
necessary from time to time to maintain such listing;
(iv) to prepare for filing by the Trust with the Commission and
to execute a registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12(b) of the
Exchange Act, including any amendments thereto;
(v) to execute and deliver on behalf of the Trust the
Underwriting Agreement and such other agreements as may be necessary or
desirable in connection with the consummation thereof;
(vi) to select the investment banker or bankers to act as
underwriters with respect to the offer and sale by the Trust of Preferred
Securities and negotiate the terms of an Underwriting Agreement and pricing
agreement providing for such offer; and
(vii) to take any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust will not be deemed to be an
"investment company" required to be registered under the Investment Company Act
of 1940, as amended, or classified other than as a "grantor trust" for United
States federal income tax purposes and so that the Debentures will be treated as
indebtedness of the Depositor for United States federal income tax purposes. In
this connection, subject to the provisions of Section 10.03, the Depositor and
the Administrative Trustees are authorized to take any action, not inconsistent
with applicable law or this Trust Agreement, that each of the Depositor and the
Administrative Trustees determines in its discretion to be necessary or
desirable for such purposes, as long as such action does not materially and
adversely affect the interests of the Holders of the Preferred Securities.
15
(e) Anything in this Trust Agreement to the contrary notwithstanding,
the Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties, liabilities or responsibilities, of the
Property Trustee or the Administrative Trustees set forth herein. The Delaware
Trustee shall be one of the Trustees of the Trust for the sole and limited
purpose of fulfilling the requirements of Section 3807 of the Delaware Business
Trust Act that the Trust have at least one trustee that has its principal place
of business in the State of Delaware. The duties of the Delaware Trustee shall
be limited to (a) accepting legal process served on the Trust in the State of
Delaware and (b) the execution of any certificates required to be filed with the
Delaware Secretary of State which the Delaware Trustee is required to execute
under Section 3811 of the Delaware Business Trust Act.
SECTION II.08. ASSETS OF TRUST. The assets of the Trust shall
consist of the Trust Property.
SECTION II.09. TITLE TO TRUST PROPERTY. Legal title to all Trust
Property shall be vested at all times in the Property Trustee (in its capacity
as such) and shall be held and administered by the Property Trustee for the
benefit of the Securityholders in accordance with this Trust Agreement.
SECTION 2.10. RIGHTS OF SECURITYHOLDERS . The legal title to the
Trust Property is vested exclusively in the Property Trustee (in its capacity as
such) in accordance with Section 2.09, and the Securityholders shall not have
any right or title therein other than an undivided beneficial ownership interest
in the assets of the Trust conferred by their Trust Securities and they shall
have no right to call for any partition or division of property, profits or
rights of the Trust except as described below. The Trust Securities shall be
personal property giving only the rights specifically set forth therein and in
this Trust Agreement. By acceptance of a beneficial interest in the Trust
Securities, Securityholders agree to treat the Debentures as indebtedness for
all United States tax purposes. The Preferred Securities shall have no
preemptive or similar rights and when issued and delivered to Securityholders
against payment of the purchase price therefor will be fully paid and
nonassessable interests in the Trust.
ARTICLE III.
Payment Account
SECTION III.01. PAYMENT ACCOUNT. (a) On or prior to the Closing
Date, the Property Trustee shall establish the Payment Account. The Property
Trustee and the Paying Agent appointed by the Administrative Trustees shall have
exclusive control with respect to the Payment Account for the purpose of making
deposits in and withdrawals from the Payment Account in accordance with this
Trust Agreement. All monies and other property deposited or held from time to
time in the Payment Account shall be held by the Property Trustee in the Payment
Account for the exclusive benefit of the Holders of Trust Securities and for
distribution as herein provided.
16
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
17
ARTICLE IV.
Distributions; Redemption
SECTION IV.01. DISTRIBUTIONS. (a) Distributions on the Trust
Securities shall be cumulative, and will accumulate whether or not there are
funds of the Trust available for the payment of Distributions. Distributions
shall accumulate from the Closing Date, and, except in the event that the
Depositor exercises its right to extend the interest payment period for the
Debentures pursuant to Section 311 of the Subordinated Indenture, shall be
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, commencing on December 31, 1998. If any date on which
Distributions are otherwise payable on the Trust Securities is not a Business
Day, then the payment of such Distribution shall be made on the next succeeding
day that is a Business Day except that, if such Business Day is in the next
succeeding calendar year, payment of such distribution shall be made on the
immediately preceding Business Day, in each case, with the same force and effect
as if made on such date (each date on which distributions are payable in
accordance with this Section 4.01(a) a "Distribution Date").
(b) Distributions payable on the Trust Securities shall be fixed at a
rate of 7-3/8% per annum of the Liquidation Amount of the Trust Securities. The
amount of Distributions payable on December 31, 1998 will be computed on the
basis of 57 days in a 360-day year. The amount of Distributions payable for any
full quarterly period shall be computed on the basis of twelve 30-day months and
a 360-day year and for any period shorter than a full month, on the basis of the
actual number of days elapsed. If the interest payment period for the
Debentures is extended pursuant to Section 311 of the Subordinated Indenture,
then Distributions on the Preferred Securities will be deferred for the period
equal to the extension of the interest payment period for the Debentures and
additional Distributions on the Trust Securities shall accumulate by the
aggregate amount of interest (including, to the extent permitted by law,
interest payable on unpaid interest at the percentage rate per annum set forth
above, compounded quarterly) that accrues during any such extended interest
payment period on the Debentures.
(c) Distributions on the Trust Securities shall be made and shall be
deemed payable on each Distribution Date only to the extent that the Trust has
funds immediately available in the Payment Account for the payment of such
Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record date, which
shall be 15 days prior to such Distribution Date.
SECTION IV.02. REDEMPTION. (a) On each Debenture Redemption Date and
at Maturity for the Debentures, the Property Trustee will be required to redeem
a Like Amount of Trust Securities at the Redemption Price.
18
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to
be redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will
become due and payable upon each such Trust Security to be redeemed and
that Distributions thereon will cease to accrue on and after said date;
(vi) the place or places where such Trust Securities are to be
surrendered for payment of the Redemption Price; and
(vii) such other matters as the Property Trustee shall deem
desirable or appropriate.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be deemed payable on each Redemption Date only if the
Trust has funds immediately available in the Payment Account for such payment.
(d) If the Property Trustee gives a notice of redemption in respect
of any Preferred Securities, then, by 12:00 noon, New York time, on the
Redemption Date, subject to Section 4.02(c), the Property Trustee shall
irrevocably deposit with the Paying Agent funds sufficient to pay the applicable
Redemption Price and will give the Paying Agent irrevocable instructions to pay
the Redemption Price to the Holders thereof upon surrender of their Trust
Securities Certificates. Notwithstanding the foregoing, Distributions payable
on or prior to the Redemption Date for any Trust Securities called for
redemption shall be payable to the Holders of such Trust Securities as they
appear on the Securities Register for the Trust Securities on the relevant
record dates for the related Distribution Dates. If notice of redemption shall
have been given and funds deposited as required, then on the Redemption Date all
rights of Securityholders holding Trust Securities so called for redemption will
cease, except the right of such Securityholders to receive the Redemption Price,
and such Trust Securities will cease to be outstanding. In the event that any
Redemption Date is not a Business Day, then payment of the
19
Redemption Price payable on such date shall be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay). In the event that payment of the Redemption Price in respect of
any Trust Securities called for redemption is not paid either by the Trust or by
the Depositor pursuant to the Guarantee, Distributions on such Trust Securities
will continue to accrue, at the then applicable rate, from the Redemption Date
originally established to the date on which such Redemption Price shall actually
be paid.
(e) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated pro rata to the Common Securities
and the Preferred Securities. The particular Preferred Securities to be
redeemed shall be selected pro rata not more than 60 days prior to the
Redemption Date by the Property Trustee from the Outstanding Preferred
Securities not previously called for redemption which may provide for the
selection for redemption of portions (equal to $25 or integral multiples
thereof) of the Liquidation Amount of Preferred Securities of a denomination
larger than $25. The Property Trustee shall promptly notify the Transfer Agent
and Registrar in writing of the Preferred Securities selected for redemption
and, in the case of any Preferred Securities selected for partial redemption,
the Liquidation Amount thereof to be redeemed. For all purposes of this Trust
Agreement, unless the context otherwise requires, all provisions relating to the
redemption of Preferred Securities shall relate, in the case of any Preferred
Securities redeemed or to be redeemed only in part, to the portion of the
Liquidation Amount of Preferred Securities which has been or is to be redeemed.
SECTION IV.03. SUBORDINATION OF COMMON SECURITIES. (a) If on any
Distribution Date or Redemption Date any Event of Default resulting from a
Debenture Event of Default shall have occurred and be continuing, no payment of
any Distribution on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all Outstanding Preferred Securities for all
distribution periods terminating on or prior thereto, or in the case of payment
of the Redemption Price, payment in full of such Redemption Price on all
Outstanding Preferred Securities, shall have been made or provided for.
(b) In the case of the occurrence of an Event of Default resulting
from a Debenture Event of Default, the Holder of Common Securities will be
deemed to have waived such Event of Default until the effect of all such Events
of Default with respect to the Preferred Securities shall have been cured,
waived or otherwise eliminated. Until all Events of Default with respect to the
Preferred Securities shall have been so cured, waived or otherwise eliminated,
the Property Trustee shall act solely on behalf of the Holders of the Preferred
Securities, and only the Holders of the Preferred Securities will have the right
to direct the Property Trustee to act.
20
SECTION IV.04. PAYMENT PROCEDURES. Payments in respect of the
Preferred Securities shall be made by check mailed to the address of the Person
entitled thereto as such address shall appear on the Securities Register.
Payments in respect of the Common Securities shall be made in such manner as
shall be mutually agreed between the Administrative Trustees and the Holder of
the Common Securities.
SECTION IV.05. TAX RETURNS AND REPORTS. The Administrative Trustees
shall prepare (or cause to be prepared), at the Depositor's expense and
direction, and file all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the Internal Revenue Service Form 1041 (or
any successor form) required to be filed in respect of the Trust in each taxable
year of the Trust and (b) prepare and furnish (or cause to be prepared and
furnished) to each Securityholder the related Internal Revenue Service Form
1099, or any successor form or the information required to be provided on such
form. The Administrative Trustees shall provide the Depositor and the Property
Trustee with a copy of all such returns, reports and schedules promptly after
such filing or furnishing. The Trustees shall comply with United States federal
withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Securityholders under the Trust
Securities.
SECTION IV.06. PAYMENTS UNDER SUBORDINATED INDENTURE. Any amount
payable hereunder to any Holder of Preferred Securities shall be reduced by the
amount of any corresponding payment such Holder has directly received pursuant
to Section 808 of the Subordinated Indenture. Notwithstanding the provisions
hereunder to the contrary, Securityholders acknowledge that any Holder of
Preferred Securities that receives payment under Section 808 of the Subordinated
Indenture may receive amounts greater than the amount such Holder may be
entitled to receive pursuant to the other provisions of this Trust Agreement.
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ARTICLE V.
Trust Securities Certificates
SECTION V.01. THE TRUST SECURITIES CERTIFICATES. The Trust
Securities Certificates shall be issued in denominations of $25 Liquidation
Amount and integral multiples thereof. Subject to Section 2.04 relating to the
original issuance of the Preferred Securities Certificate registered in the name
of the nominee of the Securities Depository, the Trust Securities Certificates
shall be executed on behalf of the Trust by manual or facsimile signature of at
least one Administrative Trustee and, if executed on behalf of the Trust by
facsimile signature, countersigned by a Transfer Agent or its agent. Trust
Securities Certificates bearing the signatures of individuals who were, at the
time when such signatures shall have been affixed, authorized to sign on behalf
of the Trust and, if executed on behalf of the Trust by facsimile signature and
countersigned by a Transfer Agent or its agent, shall be validly issued and
entitled to the benefits of this Trust Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
delivery of such Trust Securities Certificates or did not hold such offices at
the date of delivery of such Trust Securities Certificates. Trust Securities
Certificates may be typewritten, printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Administrative
Trustees, as evidenced by the execution thereof by the Administrative Trustees,
or any one of them.
SECTION V.02. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR. On the
Closing Date, the Depositor shall acquire, and thereafter retain, beneficial and
record ownership of the Common Securities. Any attempted transfer of the Common
Securities (other than a transfer in connection with a merger or consolidation
of the Depositor with or into another corporation pursuant to Section 1101 of
the Subordinated Indenture) shall be void. The Administrative Trustees shall
cause each Common Securities Certificate issued to the Depositor to contain a
legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE." A single Common
Securities Certificate representing the Common Securities shall be issued to the
Depositor in the form of a typewritten or definitive Common Securities
Certificate.
SECTION V.03. REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED
SECURITIES CERTIFICATES. (a) The Registrar shall keep or cause to be kept, at
its principal corporate office, a Securities Register in which, subject to such
reasonable regulations as it may prescribe, the Registrar shall provide for the
registration of Preferred Securities Certificates and the registration of
transfers and exchanges of Preferred Securities Certificates as herein provided.
22
(b) Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
5.08, the Administrative Trustees, or any one of them, shall execute on behalf
of the Trust by manual or facsimile signature and, if executed on behalf of the
Trust by facsimile signature, cause a Transfer Agent or its agent to countersign
and deliver, in the name of the designated transferee or transferees, one or
more new Preferred Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount. At the option of a Holder, Preferred Securities
Certificates may be exchanged for other Preferred Securities Certificates in
authorized denominations of the same class and of a like aggregate Liquidation
Amount upon surrender of the Preferred Securities Certificates to be exchanged
at the office or agency maintained pursuant to Section 5.08.
(c) Every Preferred Securities Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Administrative Trustees and a
Transfer Agent duly executed by the Holder or such Holder's attorney duly
authorized in writing. The Trust shall not be required to (i) issue, register
the transfer of, or exchange any Preferred Securities during a period beginning
at the opening of business 15 calendar days before the day of mailing of a
notice of redemption of any Preferred Securities called for redemption and
ending at the close of business on the day of such mailing or (ii) register the
transfer of or exchange any Preferred Securities so selected for redemption, in
whole or in part, except the unredeemed portion of any such Preferred Securities
being redeemed in part.
(d) No service charge shall be made for any registration of transfer
or exchange of Preferred Securities Certificates, but a Transfer Agent may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
23
SECTION V.04. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES. If (i) any mutilated Trust Securities Certificate shall be
surrendered to a Transfer Agent, or if a Transfer Agent shall receive evidence
to its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate and (ii) there shall be delivered to the Transfer Agent and the
Administrative Trustees such security or indemnity as may be required by them to
save each of them and the Depositor harmless, then in the absence of notice that
such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust, shall execute by manual or facsimile signature such Trust Securities
Certificate and, if execution on behalf of the Trust is by facsimile signature,
such Certificate shall be countersigned by a Transfer Agent; and the
Administrative Trustees, or any one of them, shall make available for delivery,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Trust Securities Certificate, a new Trust Securities Certificate of like class,
tenor and denomination. In connection with the issuance of any new Trust
Securities Certificate under this Section 5.04, the Administrative Trustees or
the Transfer Agent may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection therewith. Any
duplicate Trust Securities Certificate issued pursuant to this Section 5.04
shall constitute conclusive evidence of an ownership interest in the Trust, as
if originally issued, whether or not the lost, stolen or destroyed Trust
Securities Certificate shall be found at any time.
SECTION V.05. CANCELLATION BY REGISTRAR. All Trust Securities
Certificates surrendered for payment, redemption, registration of transfer or
exchange shall, if surrendered to any Person other than the Registrar, be
delivered to the Registrar and, if not theretofore canceled, shall promptly be
canceled by the Registrar. No Trust Securities Certificates shall be issued in
lieu of or in exchange for any Trust Securities Certificates canceled as
provided in this Section, except as expressly permitted by this Trust Agreement.
All canceled Trust Securities Certificates held by the Registrar shall be
disposed of in accordance with customary practices.
SECTION V.06. PERSONS DEEMED SECURITYHOLDERS. Prior to due
presentation of a Preferred Securities Certificate for registration of transfer,
the Trustees and the Registrar shall be entitled to treat the Person in whose
name any Preferred Securities Certificate shall be registered in the Securities
Register as the Holder of such Preferred Securities Certificate for the purpose
of receiving Distributions and for all other purposes whatsoever, and neither
the Trustees nor the Registrar shall be bound by any notice to the contrary.
SECTION V.07. LISTS OF HOLDERS. Semiannually, not later than January
15 and July 15 in each year, commencing January 15, 1999, and at such other
times as the Property Trustee may request in writing, the Administrative
Trustees shall furnish or cause to be furnished to the Property Trustee
information as to the names and addresses of the Holders, and the Property
Trustee shall preserve such information and similar information received by it
in any other capacity and afford to the Holders access to information so
preserved by it, all to such extent, if any, and in such manner as shall be
required by the Trust Indenture Act; provided, however, that no such list need
be furnished so long as the Property Trustee shall be the Registrar.
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SECTION V.08. MAINTENANCE OF OFFICE OR AGENCY. The Administrative
Trustees shall or shall cause the Transfer Agent to maintain, in the Borough of
Manhattan, the City of New York, an office or offices or agency or agencies
where Preferred Securities Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustees or
the Transfer Agent in respect of the Trust Securities Certificates may be
served. The Administrative Trustees shall or shall cause the Transfer Agent to
give prompt written notice to the Property Trustee and to the Securityholders of
any change in any such office or agency.
SECTION V.09. APPOINTMENT OF PAYING AGENT. The Paying Agent shall
make Distributions to Securityholders from the Payment Account and shall report
the amounts of such Distributions to the Administrative Trustees and the
Property Trustee. Any Paying Agent shall have the revocable power to withdraw
funds from the Payment Account for the purpose of making the Distributions. The
Property Trustee shall be entitled to rely upon a certificate of the Paying
Agent stating in effect the amount of such funds so to be withdrawn and that
same are to be applied by the Paying Agent in accordance with this Section 5.09.
The Administrative Trustees or any one of them may revoke such power and remove
the Paying Agent if the Administrative Trustees or any one of them determines in
its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect. The Paying
Agent may choose any co-paying agent that is acceptable to the Administrative
Trustees and the Depositor. The Paying Agent shall be permitted to resign upon
30 days' written notice to the Administrative Trustees and the Depositor. In
the event of the removal or resignation of the Paying Agent, the Administrative
Trustees shall appoint a successor that is reasonably acceptable to the Property
Trustee and the Depositor to act as Paying Agent (which shall be a bank, trust
company or an Affiliate of the Depositor). The Administrative Trustees shall
cause such successor Paying Agent or any additional Paying Agent appointed by
the Administrative Trustees to execute and deliver to the Trustees an instrument
in which such successor Paying Agent or additional Paying Agent shall agree with
the Trustees that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders entitled thereto
until such sums shall be paid to such Securityholders. The Paying Agent shall
return all unclaimed funds to the Property Trustee and upon resignation or
removal of a Paying Agent such Paying Agent also shall return all other funds in
its possession to the Property Trustee. The provisions of Sections 8.01 through
8.06 shall apply to the Paying Agent appointed hereunder, and the Paying Agent
shall be bound by the requirements with respect to paying agents of securities
issued pursuant to the Trust Indenture Act. Any reference in this Trust
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
SECTION V.10. BOOK-ENTRY SYSTEM . (a) The Administrative Trustees,
at the direction and expense of the Debenture Issuer, as borrower, may from time
to time appoint a Securities Depository or a successor thereto and enter into a
letter of representations or other agreement with such Securities Depository to
establish procedures with respect to the Preferred Securities. Any Securities
Depository shall be a Clearing Agency.
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(b) The Depositor and the Trustees covenant and agree to meet the
requirements of a Securities Depository for the Preferred Securities with
respect to required notices and other provisions of the letter of
representations or agreement executed with respect to such Preferred Securities.
(c) Whenever the beneficial ownership of any Preferred Securities is
determined through the books of a Securities Depository, the requirements in
this Trust Agreement of holding, delivering or transferring, and making payments
in respect of, such Preferred Securities shall be deemed modified with respect
to such Preferred Securities to meet the requirements of the Securities
Depository with respect to actions of the Trustees, the Depositor and the Paying
Agent. Any provisions hereof permitting or requiring delivery of such Preferred
Securities shall, while such Preferred Securities are in a book-entry system, be
satisfied by the notation on the books of the Securities Depository in
accordance with applicable state law.
ARTICLE VI.
Acts of Securityholders; Meetings; Voting
SECTION VI.01. LIMITATIONS ON VOTING RIGHTS . (a) Except as
provided in this Section 6.01, in Section 10.02 and as otherwise required by
law, no Holder of Preferred Securities shall have any right to vote or in any
manner otherwise control the administration, operation and management of the
Trust or the obligations of the parties hereto, nor shall anything herein set
forth, or contained in the terms of the Trust Securities Certificates, be
construed so as to constitute the Securityholders from time to time as partners
or members of an association. If the Property Trustee fails to enforce its
rights under the Debentures or this Trust Agreement, a Holder of Preferred
Securities may institute a legal proceeding directly against the Depositor to
enforce the Property Trustee's rights under the Debentures or this Trust
Agreement, to the fullest extent permitted by law, without first instituting any
legal proceeding against the Property Trustee or any other person.
Notwithstanding the foregoing, a Holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such Holder directly of
principal of or interest on the Debentures having a principal amount equal to
the aggregate Liquidation Amount of the Preferred Securities of such Holder on
or after the due dates specified in the Debentures. In connection with any such
proceeding, the Depositor will be subrogated to the rights of any Holder of
Preferred Securities to the extent of any payment made by the Depositor to such
Holder.
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(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Section 813 of
the Subordinated Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the Subordinated
Indenture or the Debentures, where such consent shall be required, without, in
each case, obtaining the prior approval of the Holders of at least 66 2/3% of
the aggregate Liquidation Amount of the Outstanding Preferred Securities;
provided, however, that where a consent under the Subordinated Indenture would
require the consent of each holder of Debentures affected thereby, no such
consent shall be given by any Trustee without the prior written consent of each
holder of Preferred Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Preferred Securities, except
pursuant to a subsequent vote of the Preferred Securities.
SECTION VI.02. NOTICE OF MEETINGS . Notice of all meetings of the
Holders of a Preferred Securities, stating the time, place and purpose of the
meeting, shall be given by the Administrative Trustees pursuant to Section 10.07
to each Holder of a Preferred Security, at his registered address, at least 15
days and not more than 90 days before the meeting. At any such meeting, any
business properly before the meeting may be so considered whether or not stated
in the notice of the meeting. Any adjourned meeting may be held as adjourned
without further notice.
SECTION VI.03. MEETINGS OF HOLDERS OF PREFERRED SECURITIES . (a) No
annual meeting of Securityholders is required to be held. The Administrative
Trustees, however, shall call a meeting of Securityholders to vote on any matter
upon the written request of the Holders of at least 25% of the aggregate
Liquidation Amount of the Outstanding Preferred Securities and may, at any time
in their discretion, call a meeting of Holders of Preferred Securities to vote
on any matters as to which the Holders of Preferred Securities are entitled to
vote.
(b) Holders of at least 50% of the aggregate Liquidation Amount of the
Outstanding Preferred Securities, present in person or by proxy, shall
constitute a quorum at any meeting of Securityholders.
(c) If a quorum is present at a meeting, an affirmative vote by the
Holders of a majority of the aggregate Liquidation Amount of the Outstanding
Preferred Securities shall constitute the action of the Securityholders, unless
this Trust Agreement shall require a greater affirmative vote.
SECTION VI.04. VOTING RIGHTS . Securityholders shall be entitled to
one vote for each $25 of Liquidation Amount represented by their Trust
Securities in respect of any matter as to which such Securityholders are
entitled to vote.
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SECTION VI.05. PROXIES, ETC. At any meeting of Securityholders, any
Securityholder entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons, any
one of them may vote at any meeting in person or by proxy in respect of such
Trust Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger.
SECTION VI.06. SECURITYHOLDER ACTION BY WRITTEN CONSENT . Any
action which may be taken by Securityholders at a meeting may be taken without a
meeting if Holders of at least a majority of the aggregate Liquidation Amount of
the Outstanding Trust Securities entitled to vote in respect of such action (or
such larger proportion thereof as shall be required by any express provision of
this Trust Agreement) shall consent to the action in writing.
SECTION VI.07. RECORD DATE FOR VOTING . For the purposes of
determining the Securityholders who are entitled to notice of and to vote at any
meeting or by written consent, or for the purpose of any other action, the
Administrative Trustees may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Securityholders or other action, as the case
may be, as a record date for the determination of the identity of the
Securityholders of record for such purposes.
SECTION VI.08. ACTS OF SECURITYHOLDERS . (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Trust Agreement to be given, made or taken by Securityholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Securityholders in person or by an agent duly
appointed in writing; and, except as otherwise expressly provided herein, such
action shall become effective when such instrument or instruments are delivered
to the Administrative Trustees. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Securityholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Trust Agreement and (subject to Section
8.01) conclusive in favor of the Trustees, if made in the manner provided in
this Section 6.08.
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(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee deems sufficient.
(c) The ownership of Preferred Securities shall be proved by the
Securities Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Trust Security shall bind every future
Holder of the same Trust Security and the Holder of every Trust Security issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustees or the Trust in reliance thereon, whether or not notation of such
action is made upon such Trust Security.
(e) Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any particular Trust
Security may do so with regard to all or any part of the Liquidation Amount of
such Trust Security or by one or more duly appointed agents each of which may do
so pursuant to such appointment with regard to all or any part of such
Liquidation Amount.
(f) If any dispute shall arise between or among the Securityholders
and the Administrative Trustees with respect to the authenticity, validity or
binding nature of any request, demand, authorization, direction, consent, waiver
or other Act of such Securityholder or Trustee under this Article VI, then the
determination of such matter by the Property Trustee shall be conclusive with
respect to such matter.
SECTION VI.09. INSPECTION OF RECORDS . Subject to Section 5.07
concerning access to the list of Securityholders, upon reasonable notice to the
Administrative Trustees and the Property Trustee, the records of the Trust shall
be open to inspection by Securityholders during normal business hours for any
purpose reasonably related to such Securityholder's interest as a
Securityholder.
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ARTICLE VII.
Representations and Warranties
OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE
SECTION VII.01. PROPERTY TRUSTEE . The Property Trustee hereby
represents and warrants for the benefit of the Depositor and the Securityholders
that:
(i) the Property Trustee is a banking corporation or trust
company duly organized, validly existing and in good standing under the
laws of the State of New York;
(ii) the Property Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under this
Trust Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Agreement;
(iii) this Trust Agreement has been duly authorized, executed
and delivered by the Property Trustee and constitutes the valid and legally
binding agreement of the Property Trustee enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(iv) the execution, delivery and performance by the Property
Trustee of this Trust Agreement will not violate, conflict with or
constitute a breach of the Property Trustee's charter or by-laws; and
(v) neither the authorization, execution or delivery by the
Property Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Property Trustee contemplated herein require the
consent or approval of, the giving of notice to, the registration with or
the taking of any other action with respect to any governmental authority
or agency under any existing Federal or New York law governing the banking
or trust powers of the Property Trustee.
SECTION VII.02. DELAWARE TRUSTEE . The Delaware Trustee hereby
represents and warrants for the benefit of the Depositor and the Securityholders
that:
(i) the Delaware Trustee is a banking corporation or trust
company duly organized, validly existing and in good standing under the
laws of the State of Delaware;
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(ii) the Delaware Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under this
Trust Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Agreement;
(iii) this Trust Agreement has been duly authorized, executed
and delivered by the Delaware Trustee and constitutes the valid and legally
binding agreement of the Delaware Trustee enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(iv) the execution, delivery and performance by the Delaware
Trustee of this Trust Agreement will not violate, conflict with or
constitute a breach of the Delaware Trustee's charter or by-laws; and
(v) neither the authorization, execution or delivery by the
Delaware Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Delaware Trustee contemplated herein require the
consent or approval of, the giving of notice to, the registration with or
the taking of any other action with respect to any governmental authority
or agency under any existing Federal or Delaware law governing the banking
or trust powers of the Delaware Trustee.
ARTICLE VIII.
The Trustees
SECTION VIII.01. CERTAIN DUTIES AND RESPONSIBILITIES . (a) The
Property Trustee, before the occurrence of any Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Trust Agreement and no implied covenants or obligations shall be read into this
Trust Agreement against the Property Trustee. In case an Event of Default has
occurred (that has not been cured or waived), the Property Trustee shall
exercise such of the rights and powers vesting in it by this Trust Agreement,
and use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
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(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Trust Agreement
and the Property Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Trust Agreement, and no implied covenants or obligations
shall be read into this Trust Agreement against the Property Trustee;
and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Trust Agreement;
provided, however, that in the case of any such certificates or
opinions that by any provision hereof are specifically required to be
furnished to the Property Trustee, the Property Trustee shall be under
a duty to examine the same to determine whether or not they conform to
the requirements of this Trust Agreement.
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of at least a majority of the aggregate
Liquidation Amount of the Outstanding Preferred Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Trust Agreement;
(iv) no provision of this Trust Agreement shall require any of
the Trustees to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Trust Property shall
be to deal with such property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to the
protections, exculpations and limitations on liability afforded to the
Property Trustee under this Trust Agreement, the Trust Indenture Act, the
Delaware Business Trust Act and, to the extent applicable, Rule 3a-7 under
the Investment Company Act of 1940, as amended;
32
(vi) the Property Trustee shall have no duty or liability for,
or with respect to the value, genuineness, existence or sufficiency of, the
Trust Property or the payment of any taxes or assessments levied thereon or
in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree with
the Depositor. Money held by the Property Trustee need not be segregated
from other funds held by it except in relation to the Payment Account
established by the Property Trustee pursuant to this Trust Agreement and
except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the Depositor
with their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for the default or misconduct of the
Administrative Trustees or the Depositor.
(C) all payments made by the Property Trustee or a Paying Agent
in respect of the Trust Securities shall be made only from the income
and proceeds from the Trust Property and only to the extent that there
shall be sufficient income or proceeds from the Trust Property to
enable the Property Trustee or Paying Agent to make payments in
accordance with the terms hereof. Each Securityholder, by its
acceptance of a Trust Security, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available
for distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in respect of
any Trust Security or for any other liability in respect of any Trust
Security. This Section 8.01(c) does not limit the liability of the
Trustees expressly set forth elsewhere in this Trust Agreement or, in
the case of the Property Trustee, in the Trust Indenture Act.
(D) Neither the Delaware Trustee nor any Administrative Trustee
shall be liable for any act or omission to act hereunder, except for
its own gross negligence or wilful misconduct.
SECTION VIII.02. CERTAIN NOTICES . (a) Within five Business Days
after the occurrence of any Event of Default actually known to the Property
Trustee, the Property Trustee shall transmit, in the manner and to the extent
provided in Section 10.08, notice of any Event of Default known to the Property
Trustee to the Securityholders, the Administrative Trustees and the Depositor,
unless such Event of Default shall have been cured or waived.
(b) Within five Business Days after receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Subordinated Indenture, an Administrative Trustee
shall transmit, in the manner and to the extent provided in Section 10.08,
notice of such exercise to the Securityholders and the Property Trustee.
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SECTION VIII.03. CERTAIN RIGHTS OF PROPERTY TRUSTEE . Subject to
the provisions of Section 8.01 and except as provided by law:
(i) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution, Opinion
of Counsel, certificate, written representation of a Holder or transferee,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, appraisal,
bond, debenture, note, other evidence of indebtedness or other paper or
document reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) if (A) in performing its duties under this Trust Agreement
the Property Trustee is required to decide between alternative courses of
action or (B) in construing any of the provisions in this Trust Agreement
the Property Trustee finds the same ambiguous or inconsistent with any
other provisions contained herein or (C) the Property Trustee is unsure of
the application of any provision of this Trust Agreement, then, except as
to any matter as to which the Preferred Securityholders are entitled to
vote under the terms of this Trust Agreement, the Property Trustee shall be
entitled to deliver a notice to the Depositor requesting written
instructions of the Depositor as to the course of action to be taken. The
Property Trustee may, but shall be under no duty to, take such action, or
refrain from taking such action, as the Property Trustee shall be
instructed in writing to take, or to refrain from taking, by the Depositor
in which event the Property Trustee shall have no liability except for its
own bad faith, negligence or wilful misconduct; provided, however, that if
the Property Trustee does not receive such instructions of the Depositor
within ten Business Days after it has delivered such notice, or such
reasonably shorter period of time set forth in such notice (which to the
extent practicable shall not be less than two Business Days), it may, but
shall be under no duty to, take or refrain from taking such action not
inconsistent with this Trust Agreement as it shall deem advisable and in
the best interests of the Securityholders, in which event the Property
Trustee shall have no liability except for its own bad faith, negligence or
willful misconduct;
(iii) whenever in the administration of this Trust Agreement
the Property Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, request and rely
upon an Officer's Certificate which, upon receipt of any such requests,
shall be promptly delivered by the Depositor or the Administrative
Trustees;
(iv the Property Trustee may consult with counsel of its
selection and the advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon;
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(v the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Agreement
at the request or direction of any of the Securityholders pursuant to this
Trust Agreement, unless such Securityholders shall have offered to the
Property Trustee reasonable security or indemnity against the costs,
expenses (including reasonable attorneys' fees and expenses) and
liabilities which might be incurred by it in complying with such request or
direction;
(vi the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, approval, bond, debenture, note or other
evidence of indebtedness or other paper or document reasonably believed by
it to be genuine, but the Property Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it may
see fit;
(vii the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through its agents or attorneys, and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(viii the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Trust Agreement;
(ix the Property Trustee shall not be charged with knowledge
of any default or Event of Default with respect to the Trust Securities
unless either (A) a Responsible Officer of the Property Trustee shall have
actual knowledge of the default or Event of Default or (B) written notice
of such default or Event of Default shall have been given to the Property
Trustee by the Depositor, the Administrative Trustees or by any
Securityholder;
(x no provision of this Trust Agreement shall be deemed to
impose any duty or obligation on the Property Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed
on it in any jurisdiction in which it shall be illegal, or in which the
Property Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation; and no permissive or discretionary power
or authority available to the Property Trustee shall be construed to be a
duty;
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(xi no provision of this Trust Agreement shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if the Property Trustee shall
have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Trust
Agreement or adequate indemnity against such risk or liability is not
reasonably assured to it;
(xii the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any tax form or securities) (or any
rerecording, refiling or reregistration thereof);
(xiii the Property Trustee shall have the right at any time
to seek instructions concerning the administration of this Trust Agreement
from any court of competent jurisdiction; and
(xiv whenever in the administration of this Trust Agreement
the Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (A) may request instructions from the
Securityholders, which instructions may only be given by the Holders of the
same Liquidation Amount of the Trust Securities as would be entitled to
direct the Property Trustee under the terms of this Trust Agreement in
respect of such remedies, rights or actions, (B) may refrain from enforcing
such remedy or right or taking such other action until such instructions
are received, and (C) shall be protected in acting in accordance with such
instructions.
SECTION VIII.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES . The recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Depositor, and the Trustees
do not assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust or any
part thereof or as to the title of the Trust thereto or as to the security
afforded thereby or hereby, or as to the validity or genuineness of any
securities at any time pledged and deposited with any Trustees hereunder, nor as
to the validity or sufficiency of this Trust Agreement or the Trust Securities.
The Trustees shall not be accountable for the use or application by the Trust of
the proceeds of the sale of the Trust Securities in accordance with Section
2.05.
SECTION VIII.05. MAY HOLD SECURITIES . Except as provided in the
definition of the term "Outstanding" in Article I, any Trustee or any agent of
any Trustee or the Trust, in its individual or any other capacity, may become
the owner or pledgee of Trust Securities and may otherwise deal with the Trust
with the same rights it would have if it were not a Trustee or such agent.
SECTION VIII.06. COMPENSATION; FEES; INDEMNITY. (a) Pursuant to the
Indenture, the Debenture Issuer, as borrower, agrees:
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(i to pay to the Trustees from time to time reasonable
compensation for all services rendered by the Trustees hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(ii except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (including the
reasonable compensation and the expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence (gross negligence, in the case of any
Administrative Trustee), bad faith or willful misconduct; and
(iii to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any and all loss, damage, claims,
liability or expense incurred without negligence (gross negligence, in the
case of the Delaware Trustee or any Administrative Trustee), bad faith or
willful misconduct on its part, arising out of or in connection with the
acceptance of the trusts created by, or the administration of, this Trust
Agreement, including the reasonable costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
(b As security for the performance of the obligations of the
Depositor Issuer under this Section, each of the Trustees shall have a lien
prior to the Trust Securities upon all property and funds held or collected by
such Trustee as such.
(c In addition to the rights provided to each Trustee to the
provisions of the immediately preceding paragraph of this Section 8.06, when a
Trustee incurs expenses or renders services in connection with an Event of
Default resulting from a Bankruptcy Event with respect to the Trust, the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
(d The provisions of this Section 8.06 shall survive the termination
of this Trust Agreement.
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SECTION VIII.07. CERTAIN TRUSTEES REQUIRED; ELIGIBILITY . (a) There
shall at all times be a Property Trustee hereunder with respect to the Trust
Securities. The Property Trustee shall be a Person that has a combined capital
and surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section
8.07(a), the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the provisions of
this Section 8.07(a), it shall resign immediately in the manner and with the
effect hereinafter specified in this Article VIII.
(b There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind such
entity.
(c There shall at all times be a Delaware Trustee with respect to
the Trust Securities. The Delaware Trustee shall either be (i) a natural person
who is at least 21 years of age and a resident of the State of Delaware or (ii)
a legal entity with its principal place of business in the State of Delaware
that otherwise meets the requirements of applicable Delaware law and that shall
act through one or more persons authorized to bind such entity.
SECTION VIII.08. CONFLICTING INTERESTS. If the Property Trustee
has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Property Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Trust Agreement. The
Subordinated Indenture and the Guarantee Agreement shall be deemed to be
specifically described in this Trust Agreement for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act. For
purposes of Section 310(b)(1) of the Trust Indenture Act and to the extent
permitted thereby, the Property Trustee, shall not be deemed to have a
conflicting interest arising from its capacity as indenture trustee under the
Junior Subordinated Indenture dated October 1, 1996 relating to the Depositor's
8.25% Junior Subordinated Deferrable Interest Debentures, under the Amended and
Restated Trust Agreement dated October 1, 1996, under the Guarantee dated
October 1, 1996 and under the Guarantee.
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SECTION VIII.09. CO-TRUSTEES AND SEPARATE TRUSTEE . (a) Unless an
Event of Default shall have occurred and be continuing, at any time or times,
for the purpose of meeting the legal requirements of the Trust Indenture Act or
of any jurisdiction in which any part of the Trust Property may at the time be
located, the Depositor and the Property Trustee shall have power to appoint, and
upon the written request of the Property Trustee, the Depositor shall for such
purpose join with the Property Trustee in the execution, delivery, and
performance of all instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Property Trustee either to act as co-
trustee, jointly with the Property Trustee, of all or any part of such Trust
Property, or to act as separate trustee of any such property, in either case
with such powers as may be provided in the instrument of appointment, and to
vest in such Person or Persons in the capacity aforesaid, any property, title,
right or power deemed necessary or desirable, subject to the other provisions of
this Section 8.09. If the Depositor does not join in such appointment within 15
days after the receipt by it of a request so to do, or in case a Debenture Event
of Default has occurred and is continuing, the Property Trustee alone shall have
power to make such appointment.
(b Should any written instrument from the Depositor be required by
any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right, or power, any
and all such instruments shall, on request, be executed, acknowledged, and
delivered by the Depositor.
(c Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms, namely:
(i The Trust Securities shall be executed and delivered and
all rights, powers, duties, and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees designated for such
purpose hereunder, shall be exercised, solely by such Trustees.
(ii The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and
exercised or performed by the Property Trustee or by the Property Trustee
and such co-trustee or separate trustee jointly, as shall be provided in
the instrument appointing such co-trustee or separate trustee, except to
the extent that under any law of any jurisdiction in which any particular
act is to be performed, the Property Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties, and obligations shall be exercised and performed by such co-trustee
or separate trustee.
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(iii The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section 8.09, and, in case a Debenture Event of
Default has occurred and is continuing, the Property Trustee shall have
power to accept the resignation of, or remove, any such co-trustee or
separate trustee without the concurrence of the Depositor. Upon the
written request of the Property Trustee, the Depositor shall join with the
Property Trustee in the execution, delivery, and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this
Section 8.09.
(iv No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee, or any
other such trustee hereunder.
(v The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.
(vi Any Act of Holders delivered to the Property Trustee
shall be deemed to have been delivered to each such co-trustee and separate
trustee.
SECTION VIII.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR .
(a) No resignation or removal of any Trustee (as the case may be, the "Relevant
Trustee") and no appointment of a successor Relevant Trustee pursuant to this
Article shall become effective until the acceptance of appointment by the
successor Relevant Trustee in accordance with the requirements of Section 8.11.
(b The Relevant Trustee may resign at any time by giving written
notice thereof to the Depositor and the Securityholders. If the instrument of
acceptance by a successor Relevant Trustee required by Section 8.11 shall not
have been delivered to the resigning Relevant Trustee within 30 days after the
giving of such notice of resignation, the resigning Relevant Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Relevant Trustee.
(c Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Common
Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time by Act of the Securityholders of a majority of the
aggregate Liquidation Amount of the Outstanding Preferred Securities, delivered
to such Relevant Trustee (in its individual capacity and on behalf of the
Trust).
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(d If the Relevant Trustee shall resign, be removed or become
incapable of continuing to act as the Relevant Trustee at a time when no
Debenture Event of Default shall have occurred and be continuing, the Common
Securityholder, by Act of the Common Securityholder delivered to the retiring
Relevant Trustee, shall promptly appoint a successor Relevant Trustee, and the
retiring Relevant Trustee so succeeded shall comply with the requirements of
Section 8.11. If the Relevant Trustee shall resign, be removed or become
incapable of continuing to act as the Relevant Trustee at a time when a
Debenture Event of Default shall have occurred and be continuing, the Preferred
Securityholders, by Act of the Holders of at least a majority of the aggregate
Liquidation Amount of the Outstanding Preferred Securities delivered to the
retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee
or Trustees, and the Relevant Trustee so succeeded shall comply with the
requirements of Section 8.11. If no successor Relevant Trustee shall have been
so appointed by the Common Securityholders or the Preferred Securityholders and
accepted appointment in the manner required by Section 8.11, any Securityholder
who has been a Securityholder for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Relevant Trustee.
(e A retiring Relevant Trustee shall give notice of each resignation
and each removal of such Relevant Trustee and of the appointment of its
successor Trustee to all Securityholders in the manner provided in Section 10.08
and shall give notice to the Depositor. Each notice shall include the name and
address of the successor Relevant Trustee and in the case of the Property
Trustee, the address of its Corporate Trust Office.
(f Notwithstanding the foregoing or any other provision of this
Trust Agreement, in the event any Administrative Trustee or a Delaware Trustee
who is a natural person dies or becomes incompetent or incapacitated, the
vacancy created by such death, incompetence or incapacity may be filled by (i)
the unanimous act of remaining Administrative Trustees if there are at least two
of them or (ii) otherwise by the Depositor (with the successor in each case
being an individual who satisfies the eligibility requirements for
Administrative Trustees or Delaware Trustee, as the case may be, set forth in
Section 8.07). Additionally, notwithstanding the foregoing or any other
provision of this Trust Agreement, in the event the Depositor reasonably
believes that any Administrative Trustee who is a natural person has become
incompetent or incapacitated, the Depositor, by notice to the remaining
Trustees, may terminate the status of such Person as an Administrative Trustee
(in which case the vacancy so created will be filled in accordance with the
preceding sentence).
(g No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any successor Property Trustee or Delaware Trustee.
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SECTION VIII.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR . (a) In
case of the appointment hereunder of a successor Relevant Trustee, the retiring
Relevant Trustee and each successor Trustee shall execute and deliver an
amendment hereto wherein each successor Relevant Trustee shall accept such
appointment and which (i) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Relevant
Trustee all the rights, powers, trusts and duties of the retiring Relevant
Trustee with respect to the Trust Securities and the Trust and (ii) shall add to
or change any of the provisions of this Trust Agreements as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Relevant Trustee, it being understood that nothing herein or in such
amendment shall constitute such Relevant Trustee co-trustees of the same trust
and that each such Relevant Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Relevant Trustee and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant
Trustee all Trust Property, all proceeds thereof and money held by such retiring
Relevant Trustee hereunder with respect to the Trust Securities.
(b Upon request of any such successor Relevant Trustee, the retiring
Relevant Trustee shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Relevant Trustee all such
rights, powers and trusts referred to in the preceding paragraph.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance the successor Relevant Trustee shall be qualified
and eligible under this Article VIII.
SECTION VIII.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS . Any Person into which the Property Trustee or the Delaware Trustee
or any Trustee that is not a natural person may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Relevant Trustee shall be a party, or
any Person succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided such Person shall be otherwise qualified and eligible under
this Article VIII, without the execution or filing of any paper, the giving of
any notice or the taking of any further act on the part of any of the parties
hereto.
SECTION VIII.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR
OR TRUST . If and when the Property Trustee shall be or become a creditor of
the Depositor or the Trust (or any other obligor upon the Debentures or the
Trust Securities), the Property Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Depositor
or Trust (or any such other obligor).
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SECTION VIII.14. REPORTS BY PROPERTY TRUSTEE . (a) The Property
Trustee shall transmit to Securityholders such reports concerning the Property
Trustee and its actions under this Trust Agreement as may be required pursuant
to the Trust Indenture Act at the times and in the manner provided pursuant
thereto. Such of those reports as are required to be transmitted by the
Property Trustee pursuant to Section 313(a) of the Trust Indenture Act shall be
so transmitted within 60 days after July 1 of each year, commencing July 1,
1999.
(b A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Property Trustee with each
stock exchange upon which the Preferred Securities are listed, with the
Commission and with the Depositor. The Depositor will notify the Property
Trustee when any Preferred Securities shall have been listed on any stock
exchange.
SECTION VIII.15. REPORTS TO THE PROPERTY TRUSTEE . The Depositor
and the Administrative Trustees on behalf of the Trust shall provide to the
Property Trustee such documents, reports, compliance certificates and
information as may be required by Section 314 of the Trust Indenture Act, in the
form, in the manner and at the times required thereby. Delivery of such
reports, information and documents by the Company to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).
SECTION VIII.16. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT .
Each of the Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement (including
any covenants compliance with which constitutes a condition precedent) that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officer's Certificate. Any opinion of counsel required to be given pursuant to
Section 314(c)(2) of the Trust Indenture Act shall be given in the form of an
Opinion of Counsel.
SECTION VIII.17. NUMBER OF TRUSTEES. (a) The number of Trustees
shall be four, provided that the Depositor, by written instrument, may increase
or decrease the number of Administrative Trustees so long as there is at least
one.
(b If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), the vacancy created
thereby shall be filled with a Trustee appointed in accordance with Section
8.10.
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(c The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 8.10, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.
SECTION VIII.18. DELEGATION OF POWER. (a Any Administrative
Trustee may, by power of attorney consistent with applicable law, delegate to
any other natural person over the age of 21 his or her power for the purpose of
executing any documents contemplated in Section 2.07(a), including any
registration statement or amendment thereto filed with the Commission, or making
any other governmental filing; and
(b the Administrative Trustees shall have power to delegate from
time to time to such of their number the doing of such things and the execution
of such instruments either in the name of the Trust or the names of the
Administrative Trustees or otherwise as the Administrative Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION VIII.19. FIDUCIARY DUTY . (a) To the extent that, at law
or in equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Trust Agreement shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Trust Agreement; provided, however, that an Indemnified
Person shall be liable for any loss, damage or claim incurred by reason of such
Indemnified Person's gross negligence or willful misconduct, (subject, with
respect to the Property Trustee, to Section 8.01). The provisions of this Trust
Agreement, to the extent that they restrict the duties and liabilities of an
Indemnified Person otherwise existing at law or in equity (other than the duties
imposed on the Property Trustee under the Trust Indenture Act), are agreed by
the parties hereto to replace such other duties and liabilities of such
Indemnified Person.
(b Unless otherwise expressly provided herein and subject to the
provisions of the Trust Indenture Act:
(i whenever a conflict of interest exists or arises between
an Indemnified Person and the Trust or any Covered Person; or
44
(ii whenever this Trust Agreement or any other agreement
contemplated herein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Securityholder, the Indemnified Person shall resolve such
conflict of interest, take such action or provide such terms, considering
in each case the relative interest of each party (including its own
interest) to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or accepted
industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified
Person, the resolution, action or terms so made, taken or provided by the
Indemnified Person shall not constitute a breach of this Trust Agreement or
any other agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise; and
(c Unless otherwise expressly provided herein and subject to the
provisions of the Trust Indenture Act, whenever in this Trust Agreement an
Indemnified Person is permitted or required to make a decision
(i in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it reasonably desires, including its own interests, and shall
have no duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and, to the
extent permitted by applicable law, shall not be subject to any other or
different standard imposed by this Trust Agreement or by applicable law.
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ARTICLE IX.
Termination and Liquidation
SECTION IX.01. TERMINATION UPON EXPIRATION DATE . The Trust shall
automatically terminate on the Expiration Date and the Trust Property shall be
distributed in accordance with Section 9.04.
SECTION IX.02. EARLY TERMINATION . Upon the first to occur of (such
first occurrence, an "Early Termination Event"):
(i a Bankruptcy Event in respect of, or the dissolution or
liquidation of, the Depositor;
(ii the redemption of all of the Preferred Securities;
(iii the occurrence of a Special Event and the election by
the Depositor to terminate that Trust pursuant to Section 9.04(d);
(iv the entrance by a court of competent jurisdiction of an
order for judicial termination of the Trust;
the Trust shall terminate and the Trustees shall take such action as is required
by Section 9.04.
SECTION IX.03. TERMINATION . The respective obligations and
responsibilities of the Trust and the Trustees created hereby shall terminate
upon the latest to occur of the following: (i) the distribution by the Property
Trustee to Securityholders upon the liquidation of the Trust pursuant to Section
9.04, or upon the redemption of all of the Trust Securities pursuant to Section
4.02 or 9.04(d), of all amounts required to be distributed hereunder upon the
final payment of the Trust Securities; (ii) the payment of all amounts due to
creditors of the Trust; (iii) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders and (iv) the filing
of a certificate of cancellation with the Delaware Secretary of State.
SECTION IX.04. LIQUIDATION . (a) On the Expiration Date or earlier
if an Early Termination Event specified in clause (i), (iii) or (iv) of Section
9.02 shall occur, subject to Section 9.04(e), after satisfaction of all amounts
due to creditors of the Trust, if any, as provided by applicable law, the Trust
shall be liquidated by the Property Trustee by distributing to each
Securityholder a Like Amount of Debentures. Notice of liquidation shall be
given by the Administrative Trustees by first-class mail, postage prepaid,
mailed not later than 30 nor more than 60 days prior to the Liquidation Date to
each Securityholder at such Holder's address appearing in the Securities
Register. All notices of liquidation shall:
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(i state the Liquidation Date, which, in the case of an Early
Termination Event specified in clause (iii) of Section 9.02 shall be no
later than the 90th day following the occurrence of the Special Event;
(ii state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii provide such information with respect to the mechanics
by which Holders may exchange Trust Securities Certificates for Debentures,
or in the case of a Section 9.04(e) liquidation, receive a Liquidation
Distribution, as the Administrative Trustees or the Property Trustee shall
deem appropriate.
(b In order to effect the distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
outstanding Trust Securities Certificates.
(c After the Liquidation Date, (i) the Trust Securities will no
longer be deemed to be Outstanding, (ii) certificates representing a Like Amount
of Debentures will be issued to Holders of Trust Securities Certificates, upon
surrender of such Trust Securities Certificates to the Property Trustee or its
agent for exchange, (iii) the Depositor shall use its best efforts to have the
Debentures listed on the New York Stock Exchange or on such other stock exchange
or other organization as the Preferred Securities are then listed or traded,
(iv) any Trust Securities Certificate not so surrendered for exchange will be
deemed to represent a Like Amount of Debentures, accruing interest at the rate
provided for in the Debentures from the last Distribution Date on which a
Distribution was made on such Trust Securities Certificate until such Trust
Securities Certificate shall be so surrendered (and until such Trust Securities
Certificates shall be so surrendered, no payments of interest or principal will
be made to Holders of such Trust Securities Certificates) and (v) all rights of
Securityholders will cease, except the right to receive Debentures and payments
of interest and principal received by the Trustee with respect to the Debentures
represented by Trust Security Certificates not surrendered for exchange upon
surrender of Trust Securities Certificates.
(d If at any time a Special Event shall occur and be continuing, the
Depositor may elect to (i) redeem the Debentures in whole but not in part and
therefore cause a mandatory redemption of all the Preferred Securities at the
Redemption Price within 90 days following the occurrence of such Special Event,
or (ii) cause the termination of the Trust; provided, however, that, in the case
of a Tax Event, any such termination shall be conditioned upon receipt by the
Administrative Trustees of a No Recognition Opinion.
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(e In the event that, notwithstanding the other provisions of this
Section 9.04, whether because of an order for termination entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders will be entitled
to receive out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of all amounts due to creditors of the
Trust, if any, as provided by applicable law, an amount equal to the Liquidation
Amount per Trust Security plus accumulated and unpaid Distributions thereon to
the date of payment (such amount being the "Liquidation Distribution"). If,
upon any such dissolution, winding up or termination, the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then, subject
to the next succeeding sentence, the amounts payable by the Trust on the Trust
Securities shall be paid on a pro rata basis (based upon Liquidation Amounts).
The Holder of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination pro rata
(determined as aforesaid) with Holders of Preferred Securities, except that, if
a Debenture Event of Default has occurred and is continuing or if a Debenture
Event of Default has not occurred solely by reason of a requirement that time
lapse or notice be given, the Liquidation Distribution with respect to the
Preferred Securities shall be paid in full prior to the making of any
Liquidation Distribution with respect to the Common Securities.
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SECTION IX.05. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS
OF THE TRUST . The Trust may not merge with or into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except pursuant
to this Section 9.05. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the Property Trustee, the
Delaware Trustee or the Holders of the Preferred Securities, the Trust may merge
with or into, consolidate, amalgamate, be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to a trust
organized as such under the laws of any state; provided, however, that (i) such
successor entity either (a) expressly assumes all of the obligations of the
Trust with respect to the Preferred Securities or (b) substitutes for the
Preferred Securities other securities having substantially the same terms as the
Preferred Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Preferred Securities rank in priority with
respect to distributions and payments upon liquidation, redemption and
otherwise, (ii) the Depositor expressly appoints a trustee of such successor
entity possessing substantially the same powers and duties as the Property
Trustee as the holder of the Debentures, (iii) the Successor Securities are
listed or traded, or any Successor Securities will be listed or traded upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any, (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of Preferred Securities (including any Successor
Securities) in any material respect, (vi) such successor entity has a purpose
substantially identical to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Depositor has received an Opinion of Counsel to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders of the
Preferred Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor any successor
entity will be required to register as an investment company under the
Investment Company Act and (viii) the Depositor owns all of the Common
Securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. Notwithstanding the foregoing, the Trust shall not, except
with the consent of Holders of 100% of the aggregate Liquidation Amount of the
Outstanding Preferred Securities, consolidate, amalgamate, merge with or into,
or be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to any other Person or permit any other Person to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or the successor entity to be classified as other than a
grantor trust for United States Federal income tax purposes.
49
ARTICLE X.
Miscellaneous Provisions
SECTION X.01. LIMITATION OF RIGHTS OF SECURITYHOLDERS . The death
or incapacity of any person having an interest, beneficial or otherwise, in a
Trust Security shall not operate to terminate this Trust Agreement, nor entitle
the legal representatives or heirs of such person or any Securityholder for such
person, to claim an accounting, take any action or bring any proceeding in any
court for a partition or winding up of the arrangements contemplated hereby, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
SECTION X.02. AMENDMENT . (a) This Trust Agreement may be amended
from time to time by the Trustees and the Depositor, without the consent of any
Securityholders, (i) to cure any ambiguity, correct or supplement any provision
herein or therein which may be inconsistent with any other provision herein or
therein, or to make any other provisions with respect to matters or questions
arising under this Trust Agreement, which shall not be inconsistent with the
other provisions of this Trust Agreement; provided, however, that such action
shall not adversely affect in any material respect the interests of any
Securityholder, (ii) to modify, eliminate or add to any provisions of this Trust
Agreement to such extent as shall be necessary to ensure that the Trust will not
be classified for United States federal income tax purposes other than as a
"grantor trust" at any time that any Trust Securities are Outstanding or to
ensure the Trust's exemption from the status of an "investment company" under
the Investment Company Act of 1940, as amended, or (iii) to effect the
acceptance of a successor Trustee's appointment. Any amendment of this Trust
Agreement pursuant to clause (i) above shall become effective only when notice
thereof shall have been given to the Securityholders.
50
(b Except as provided in Sections 6.01(c) and 10.02(c), any
provision of this Trust Agreement may be amended by the Trustees and the
Depositor with (i) the approval of the Holders of at least a majority of the
aggregate Liquidation Amount of the Outstanding Trust Securities and (ii)
receipt by the Trustees of an Opinion of Counsel to the effect that such
amendment or the exercise of any power granted to the Trustees in accordance
with such amendment will not affect the Trust's status as a grantor trust for
United States federal income tax purposes or the Trust's exemption from status
of an "investment company" under the Investment Company Act of 1940, as amended;
provided, however, that, subject to Section 10.02(c), if any proposed amendment
to the Trust Agreement provides for, or the Trustees otherwise propose to
effect, (A) any action that would materially adversely affect the powers,
preferences or special rights of the Preferred Securities, whether by way of
amendment to the Trust Agreement or otherwise, or (B) the dissolution, winding-
up or termination of the Trust, other than pursuant to the terms of this Trust
Agreement, then such amendment or proposal shall not be effective except with
the approval of the Holders of at least 66 2/3% of the aggregate Liquidation
Amount of the Outstanding Preferred Securities.
(c In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 6.03 or 6.06), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date, (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date or (iii) change
the provisions of this Section 10.02(c).
(d Notwithstanding any other provisions of this Trust Agreement, no
Administrative Trustee shall enter into or consent to any amendment to this
Trust Agreement which would cause the Trust to fail or cease to qualify for the
exemption from status of an "investment company" under the Investment Company
Act of 1940, as amended, afforded by Rule 3a-5 thereunder or which would cause
the Trust to be classified as other than a grantor trust for United States
federal income tax purposes.
(e Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the affected party, this Trust Agreement may not be
amended in a manner which imposes any additional obligation on the Depositor or
any Trustee.
(f In the event there shall be that any amendment to this Trust
Agreement, the Administrative Trustees shall promptly provide to the Depositor a
copy of such amendment.
(g The Trustees are entitled to receive an Opinion of Counsel as
conclusive evidence that any amendment to this Trust Agreement executed pursuant
to this Section 10.02 is authorized or permitted by, and conforms to, the terms
of this Section 10.02, has been duly authorized by and lawfully executed and
delivered on behalf of the other requisite parties, and that it is proper for
the Trustees under the provisions of this Section 10.02 to join in the execution
thereof.
51
SECTION X.03. SEPARABILITY . In case any provision in this Trust
Agreement or in the Trust Securities Certificates shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION X.04. GOVERNING LAW . This Trust Agreement and the rights
and obligations of each of the Securityholders, the Trust and the Trustees with
respect to this Trust Agreement and the Trust Securities shall be construed in
accordance with and governed by the laws of the State of Delaware (without
regard to conflict of laws principles).
SECTION X.05. SUCCESSORS . This Trust Agreement shall be binding
upon and shall inure to the benefit of any successor to the Trust or the
Trustees, including any successor by operation of law.
SECTION X.06. HEADINGS . The Article and Section headings are for
convenience only and shall not affect the construction of this Trust Agreement.
SECTION X.07. NOTICE AND DEMAND . (a) Any notice, demand or other
communication which by any provision of this Trust Agreement is required or
permitted to be given or served to or upon any Securityholder or the Depositor
may be given or served in writing by deposit thereof, postage prepaid, in the
United States mail, hand delivery or facsimile transmission, in each case,
addressed, (i) in the case of a Preferred Securityholder, to such Preferred
Securityholder as such Securityholder's name and address may appear on the
Securities Register and (ii) in the case of the Common Securityholder or the
Depositor, to Atlantic City Electric Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer, facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇, with a copy
to the Secretary, facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇. Such notice, demand or other
communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
(b) Any notice, demand or other communication which by any provision
of this Trust Agreement is required or permitted to be given or served to or
upon the Trust, the Property Trustee, the Delaware Trustee or the Administrative
Trustees shall be given in writing addressed (until another address is published
by the Trust) as follows: (i) with respect to the Property Trustee, to The Bank
of New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ marked
"Attention: Corporate Trust Department" (ii) with respect to the Delaware
Trustee, to The Bank of New York (Delaware), ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and (iii) with respect to the Trust or the Administrative
Trustees, at the address above for notice to the Depositor, marked "Attention:
Administrative Trustees for Atlantic Capital II". Such notice, demand or other
communication to or upon the Trust or the Property Trustee shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing by
the Trust or the Property Trustee.
52
SECTION X.08. AGREEMENT NOT TO PETITION . Each of the Trustees and
the Depositor agrees for the benefit of the Securityholders that, until at least
one year and one day after the Trust has been terminated in accordance with
Article IX, it shall not file, or join in the filing of, a petition against the
Trust under any bankruptcy, reorganization, arrangement, insolvency, liquidation
or other similar law (including, without limitation, the United States
Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in the
commencement of any proceeding against the Trust under any Bankruptcy Law. In
the event the Depositor takes action in violation of this Section 10.08, the
Property Trustee agrees, for the benefit of Securityholders, that it shall file
an answer with the bankruptcy court or otherwise properly contest the filing of
such petition by the Depositor against the Trust or the commencement of such
action and raise the defense that the Depositor has agreed in writing not to
take such action and should be stopped and precluded therefrom and such other
defenses, if any, as counsel for the Property Trustee or the Trust may assert.
The provisions of this Section 10.08 shall survive the termination of this Trust
Agreement.
SECTION X.09. CONFLICT WITH TRUST INDENTURE ACT. (a) If any
provision hereof limits, qualifies or conflicts with another provision hereof
which is required or deemed to be included in this Trust Agreement by, or is
otherwise governed by, any of the provisions of the Trust Indenture Act, such
other provisions shall control; and if any provision hereof otherwise conflicts
with the Trust Indenture Act, the Trust Indenture Act shall control.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Trust Securities as equity
securities representing interests in the Trust.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON
BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST
SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND THE
SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE INDENTURE AND
SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS
THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
53
IN WITNESS WHEREOF, the parties have caused this Trust Agreement to be
duly executed, all as of the day and year first above written.
ATLANTIC CITY ELECTRIC COMPANY
By: __________________
Title: Senior Vice President and Chief Financial
Officer
THE BANK OF NEW YORK,
as Property Trustee
By: __________________
Title:
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: __________________
Title:
-----------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, solely in his capacity
as Administrative Trustee
-----------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, solely in her capacity
as Administrative Trustee
54
EXHIBIT A
CERTIFICATE OF TRUST
OF
ATLANTIC CAPITAL II
THIS CERTIFICATE OF TRUST of Atlantic Capital II (the "Trust"), dated
as of September 10, 1998, is being duly executed and filed by the undersigned,
as trustees, to create a business trust under the Delaware Business Trust Act
(12 Del. C. (S) 3801, et seq.).
------- ------
1. Name. The name of the business trust being created hereby is
Atlantic Capital II.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are as
follows:
The Bank of New York (Delaware)
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
3. Effective Date. This Certificate of Trust shall be effective as
of its filing.
IN WITNESS WHEREOF, the undersigned, being the only trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE BANK OF NEW YORK (DELAWARE), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
not in its individual capacity but not in his individual capacity
solely as Trustee but solely as Trustee
By: _________________
Name:
Title:
THE BANK OF NEW YORK,
not in its individual capacity but
solely as Trustee
By: ________________
Name:
Title:
1
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-[ ]
Certificate Evidencing Common Securities
of
ATLANTIC CAPITAL II
Common Securities
(Liquidation Amount $25 per Common Security)
Atlantic Capital II, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that Atlantic City
Electric Company (the "Holder") is the registered owner of the number set forth
above of common securities of the Trust representing undivided beneficial
ownership interests in the assets of the Trust and designated as Common
Securities (Liquidation Amount $25 per Common Security) (the "Common
Securities"). In accordance with Section 5.02 of the Trust Agreement (as
defined below) the Common Securities are not transferable and any attempted
transfer hereof shall be void. The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust dated
as of October 1, 1998, as the same may be amended from time to time (the "Trust
Agreement"). The Trust will furnish a copy of the Trust Agreement to the holder
of this certificate without charge upon written request to the Trust at its
principal place of business or registered office.
Upon receipt of this certificate, the holder of this certificate is
bound by the Trust Agreement and is entitled to the benefits thereunder.
B-1
IN WITNESS WHEREOF, an Administrative Trustee of the Trust has
executed this certificate for and on behalf of the Trust on this day of
, 199 .
ATLANTIC CAPITAL II
By:________________________
not in his (her) individual capacity, but
solely as Administrative Trustee
B-2
[Clearing Agency Legend]
EXHIBIT C
Certificate Number Number of Preferred Securities
P- CUSIP NO.
Certificate Evidencing Preferred Securities
of
ATLANTIC CAPITAL II
% Cumulative Trust Preferred Capital Securities
(Liquidation Amount $25 per Preferred Security)
Atlantic Capital II, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that (the
"Holder") is the registered owner of the number set forth above of preferred
securities of the Trust representing undivided beneficial ownership interests in
the assets of the Trust and designated as % Cumulative Trust Preferred Capital
Securities (Liquidation Amount $25 per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer as provided in
the Trust Agreement (as defined below). The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities are set forth in, and this certificate and the Preferred Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust, dated
as of October 1, 1998, as the same may be amended from time to time (the "Trust
Agreement"). The holder of this certificate is entitled to the benefits and
agrees to the subordination provisions and other terms of the Guarantee
Agreement of Atlantic City Electric Company, a New Jersey corporation, and The
Bank of New York, as guarantee trustee, dated as of October 1, 1998 (the
"Guarantee"), to the extent provided therein. The Trust will furnish a copy of
the Trust Agreement and the Guarantee to the holder of this certificate without
charge upon written request to the Trust at its principal place of business or
registered office.
Upon receipt of this certificate, the holder of this certificate is
bound by the Trust Agreement and is entitled to the benefits thereunder.
C-1
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate for and on behalf of the Trust.
Dated:
ATLANTIC CAPITAL II
By:____________________________________
[ ]
not in his (her) individual capacity,
but solely as Administrative Trustee
C-2
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
of the Preferred Securities represented by this Preferred Securities Certificate
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
attorney to transfer such Preferred Securities Certificate on the books of the
Trust. The attorney may substitute another to act for him or her.
Date:____________________
Signature:
(Sign exactly as your name appears on the other side of this Preferred
Securities Certificate)
Signature:
(Sign exactly as your name appears on the other side of this Preferred
Securities Certificate)
C-3