-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Gkt/Nq0bE5awC3OiIyAey4eaAXIGiJ1kWye6xtCPmXpQF268gW6lYhwb+H9Qesxu R1r0SHhb1/IJ061JCA361A== 0000893220-95-000437.txt : 199507060000893220-95-000437.hdr.sgml : 19950706 ACCESSION NUMBER: 0000893220-95-000437 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 19 FILED AS OF DATE: 19950705 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PECO ENERGY CO CENTRAL INDEX KEY: 0000078100 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 230970240 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 033-60859 FILM NUMBER: 95551972 BUSINESS ADDRESS: STREET 1: 2301 MARKET ST STREET 2: P O BOX 8699 CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 2158414000 FORMER COMPANY: FORMER CONFORMED NAME: PHILADELPHIA ELECTRIC CO DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PECO ENERGY CAPITAL LP CENTRAL INDEX KEY: 0000925910 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 51035522 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 033-60859-01 FILM NUMBER: 95551973 BUSINESS ADDRESS: STREET 1: 1013 CENTRE RD, STE 350F CITY: WILMINGTON STATE: DE ZIP: 19805 BUSINESS PHONE: 3029980592 MAIL ADDRESS: STREET 1: C/O PECO ENERGY CO STREET 2: 2301 MARKET ST CITY: PHILADELPHIA STATE: PA ZIP: 19101 S-4 1 FORM S-4 REGISTRATION STATEMENT FOR PECO ENERGY 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 5, 1995 REGISTRATION NOS. 33- 33- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- PECO ENERGY COMPANY PECO ENERGY CAPITAL, L.P. (EXACT NAME OF REGISTRANT (EXACT NAME OF REGISTRANT AS SPECIFIED IN AS SPECIFIED IN ITS CHARTER) ITS CERTIFICATE OF LIMITED PARTNERSHIP) Pennsylvania Delaware (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) 4931 6799 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 23-0970240 51-0355322 (I.R.S. EMPLOYER IDENTIFICATION NO.) P.O. Box 8699, 2301 Market Street 1013 Centre Road, Suite 350F Philadelphia, PA 19101 Wilmington, DE 19805 (215) 841-4000 (302) 998-0592 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF PRINCIPAL EXECUTIVE OFFICES) J. B. MITCHELL J. B. MITCHELL Vice President -- Finance and Treasurer President P.O. Box 8699, 2301 Market Street P.O. Box 8699, 2301 Market Street Philadelphia, PA 19101 Philadelphia, PA 19101 (215) 841-4000 (215) 841-4000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) with copies to: JAMES W. DURHAM, ESQ. Senior Vice President and General Counsel P.O. Box 8699, 2301 Market Street, Philadelphia, PA 19101 ROBERT C. GERLACH, ESQ. ROBERT M. JONES, JR., ESQ. Ballard Spahr Andrews & Ingersoll Drinker Biddle & Reath 1735 Market Street 1345 Chestnut Street Philadelphia, PA 19103-7599 Philadelphia, PA 19107
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the Registration Statement becomes effective. --------------------- If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. / / --------------------- CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------ PROPOSED PROPOSED AMOUNT MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF TITLE OF EACH CLASS OF TO BE PRICE PER OFFERING REGISTRATION SECURITIES TO BE REGISTERED REGISTERED(1) UNIT(2)(3) PRICE(2)(3) FEE(4) - ------------------------------------------------------------------------------------------------------------ Trust Receipts representing PECO Energy Capital, L.P. % Cumulative Monthly Income Preferred Securities, Series B..... $ % $ $ - ------------------------------------------------------------------------------------------------------------ PECO Energy Company Guarantee with respect to PECO Energy Capital, L.P. % Cumulative Monthly Income Preferred Securities, Series B...................... $ % $ $ - ------------------------------------------------------------------------------------------------------------ PECO Energy Company, % Deferrable Interest Subordinated Debentures, Series B......................................... $ % $ $ - ------------------------------------------------------------------------------------------------------------ Total....................................... $135,000,000 100% $135,000,000 $46,552 - ------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------
(1) There are being registered hereunder a presently indeterminate number of Trust Receipts, each representing a % Cumulative Monthly Income Preferred Security, Series B of PECO Energy Capital, L.P., with an aggregate initial offering price not to exceed $135,000,000 and related Guarantee and % Deferrable Interest Subordinated Debentures, Series B of PECO Energy Company for which no separate consideration will be received. (2) Estimated solely for the purpose of determining the registration fee. (3) Exclusive of accrued interest and dividends, if any. (4) Pursuant to Rule 457(n) and (o), the registration fee is calculated on the basis of the proposed maximum offering price of the Trust Receipts. --------------------- THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 CROSS REFERENCE SHEET PECO ENERGY COMPANY PECO ENERGY CAPITAL, L.P. PURSUANT TO ITEM 501(B) OF REGULATION S-K SHOWING LOCATION IN OFFERING CIRCULAR/PROSPECTUS OF ITEMS OF FORM S-4
FORM S-4 ITEM NO. CAPTION IN OFFERING CIRCULAR/PROSPECTUS ------------------------------------------- ------------------------------------------- 1. Forepart of Registration Statement and Outside Front Cover Page of Prospectus... Outside Front Cover Page; Inside Front Cover Page 2. Inside Front and Outside Back Cover Pages of Prospectus............................ Inside Front Cover Page; Available Information; Incorporation of Certain Documents by Reference; Table of Contents 3. Risk Factors, Ratio of Earnings to Fixed Charges and Other Information............ Offering Circular/Prospectus Summary; Certain Investment Considerations; Coverage Ratios; Selected Consolidated Financial Data; Comparison of Preferred Trust Receipts and Depositary Shares; The Offer -- General; United States Taxation 4. Terms of the Transaction................... Offering Circular/Prospectus Summary 5. Pro Forma Financial Information............ Not Applicable 6. Material Contracts with the Company Being Acquired................................. Not Applicable 7. Additional Information Required for Reoffering by Persons and Parties Deemed to be Underwriters....................... Not Applicable 8. Interests of Named Experts and Counsel..... Legal Matters; Experts 9. Disclosure of Commission Position on Indemnification for Securities Act Liabilities.............................. Not Applicable 10. Information with Respect to S-3 Registrants.............................. Incorporation of Certain Documents by Reference 11. Incorporation of Certain Information by Reference................................ Incorporation of Certain Documents by Reference 12. Information with Respect to S-2 or S-3 Registrants.............................. Not Applicable 13. Incorporation of Certain Information by Reference................................ Not Applicable 14. Information with Respect to Registrants Other than S-3 or S-2 Registrants........ Not Applicable 15. Information with Respect to S-3 Companies................................ Not Applicable 16. Information with Respect to S-2 or S-3 Companies................................ Not Applicable 17. Information with Respect to Companies Other than S-3 or S-2 Companies................ Not Applicable 18. Information if Proxies, Consents or Authorizations are to be Solicited....... Not Applicable 19. Information if Proxies, Consents or Authorizations are not to be Solicited or in an Exchange Offer..................... Incorporation of Certain Documents by Reference
3 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION, DATED JULY , 1995 OFFERING CIRCULAR/PROSPECTUS PECO ENERGY COMPANY OFFER TO EXCHANGE TRUST RECEIPTS ("TOPRS SM") EACH REPRESENTING A % CUMULATIVE MONTHLY INCOME PREFERRED SECURITY, SERIES B OF PECO ENERGY CAPITAL, L.P. (STATED LIQUIDATION PREFERENCE $25 PER PREFERRED SECURITY) FOR UP TO 5,400,000 OUTSTANDING DEPOSITARY SHARES EACH REPRESENTING A ONE-FOURTH INTEREST IN A SHARE OF $7.96 CUMULATIVE PREFERRED STOCK OF PECO ENERGY COMPANY THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON , 1995, UNLESS THE OFFER IS EXTENDED. --------------------- PECO Energy Company, a Pennsylvania corporation ("PECO Energy"), hereby offers, upon the terms and subject to the conditions set forth in this Offering Circular/Prospectus and the accompanying Letter of Transmittal (the "Letter of Transmittal" which, together with this Offering Circular/Prospectus, constitute the "Offer"), to effect the exchange (the "Exchange") of Trust Receipts, each representing a % Cumulative Monthly Income Preferred Security, Series B, representing a limited partner interest issued by PECO Energy Capital, L.P., a limited partnership formed under the laws of the State of Delaware ("PECO Energy Capital"), for up to 5,400,000 depositary shares (the "Depositary Shares"), each representing a one-fourth interest in a share of $7.96 Cumulative Preferred Stock of PECO Energy. The Trust Receipts are hereinafter referred to as the "Preferred Trust Receipts" and the underlying % Cumulative Monthly Income Preferred Securities, Series B of PECO Energy Capital are hereinafter referred to as the "Series B Preferred Securities." Exchanges will be made on the basis of one Preferred Trust Receipt for each Depositary Share validly tendered and accepted for exchange in the Offer. Depositary Shares not accepted for exchange because of proration or otherwise will be returned. IN ORDER TO PARTICIPATE IN THE OFFER, HOLDERS OF DEPOSITARY SHARES MUST EITHER SUBMIT A LETTER OF TRANSMITTAL OR SUBMIT A NOTICE OF GUARANTEED DELIVERY AND COMPLY WITH THE OTHER PROCEDURES FOR TENDERING IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED HEREIN AND IN THE LETTER OF TRANSMITTAL PRIOR TO 12:00 MIDNIGHT, NEW YORK CITY TIME, ON , 1995 (THE "EXPIRATION DATE"). Application has been made to list the Preferred Trust Receipts on the New York Stock Exchange (the "NYSE"). --------------------- SEE "CERTAIN INVESTMENT CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN FACTORS RELATING TO THE PREFERRED TRUST RECEIPTS THAT SHOULD BE CONSIDERED BY INVESTORS, INCLUDING THE PERIOD DURING WHICH AND CIRCUMSTANCES UNDER WHICH DISTRIBUTIONS ON THE UNDERLYING SERIES B PREFERRED SECURITIES MAY BE DEFERRED AND THE RELATED FEDERAL INCOME TAX CONSEQUENCES. --------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFERING CIRCULAR/PROSPECTUS, AND ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. --------------------- NO RECOMMENDATION TO HOLDERS OF DEPOSITARY SHARES TO TENDER OR TO REFRAIN FROM TENDERING IN THE OFFER IS MADE BY PECO ENERGY, THE BOARD OF DIRECTORS OF PECO ENERGY, PECO ENERGY CAPITAL OR THE GENERAL PARTNER OF PECO ENERGY CAPITAL. HOLDERS OF DEPOSITARY SHARES ARE URGED TO CONSULT THEIR FINANCIAL AND TAX ADVISERS IN MAKING THEIR DECISIONS ON WHAT ACTION TO TAKE IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES. --------------------- PECO Energy will pay to Soliciting Dealers (as defined herein) designated by the record or beneficial owner, as appropriate, of Depositary Shares a solicitation fee of $ per Depositary Share validly tendered and accepted for exchange pursuant to the Offer and to Merrill Lynch & Co., as Dealer Manager, a fee of $ per Depositary Share tendered pursuant to the Offer, subject to certain conditions. Soliciting Dealers are not entitled to a solicitation fee for Depositary Shares beneficially owned by such Soliciting Dealer. See "The Offer -- Dealer Manager; Soliciting Dealers." --------------------- The Dealer Manager for the Offer is: MERRILL LYNCH & CO. THE DATE OF THIS OFFERING CIRCULAR/PROSPECTUS IS , 1995. "TOPrS" is a service mark of Merrill Lynch & Co., Inc. 4 DIAGRAM OF OFFER - --------------- (1) Depositary Shares (2) Series B Subordinated Debentures* (3) Series B Preferred Securities (4) Preferred Trust Receipts** * The principal amount of the Series B Subordinated Debentures delivered to PECO Energy Capital pursuant to the Exchange will be equal to the aggregate stated liquidation preference of the Series B Preferred Securities issued in connection with the Offer. PECO Energy Capital will also purchase Series B Subordinated Debentures with a principal amount equal to the proceeds received by PECO Energy Capital from the issuance of additional general partner interests to PECO Energy Capital Corp., the general partner. ** Holders of Depositary Shares who participate in the Offer will receive one Preferred Trust Receipt for each outstanding Depositary Share that is validly tendered and accepted for exchange. 5 DIAGRAM OF OFFER SHOWING END RESULT FOR HOLDERS OF DEPOSITARY SHARES - --------------- * Holders of Depositary Shares who participate in the Offer will receive one Preferred Trust Receipt for each outstanding Depositary Share that is validly tendered and accepted for exchange. DIAGRAM OF PAYMENT FLOWS AFTER COMPLETION OF THE EXCHANGE 6 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFERING CIRCULAR/PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY PECO ENERGY, PECO ENERGY CAPITAL OR THE DEALER MANAGER. NEITHER THE DELIVERY OF THIS OFFERING CIRCULAR/PROSPECTUS NOR ANY EXCHANGE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF PECO ENERGY OR PECO ENERGY CAPITAL SINCE THE RESPECTIVE DATES AS OF WHICH INFORMATION IS GIVEN HEREIN. THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS OF DEPOSITARY SHARES IN ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. HOWEVER, PECO ENERGY AND PECO ENERGY CAPITAL MAY, AT THEIR DISCRETION, TAKE SUCH ACTION AS THEY MAY DEEM NECESSARY TO MAKE THE OFFER IN ANY SUCH JURISDICTION AND EXTEND THE OFFER TO HOLDERS OF DEPOSITARY SHARES IN SUCH JURISDICTION. IN ANY JURISDICTION THE LAWS OF WHICH REQUIRE THE OFFER TO BE MADE BY A LICENSED BROKER OR DEALER, THE OFFER IS BEING MADE ON BEHALF OF PECO ENERGY BY THE DEALER MANAGER OR ONE OR MORE REGISTERED BROKERS OR DEALERS WHICH ARE LICENSED UNDER THE LAWS OF SUCH JURISDICTION. AVAILABLE INFORMATION PECO Energy is subject to the information requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy and information statements and other information with the Securities and Exchange Commission (the "SEC"). Such reports, proxy and other information filed by PECO Energy may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at certain of its regional offices at Suite 1400, 500 West Madison Street, Chicago, IL 60661-2511 and Suite 1300, 7 World Trade Center, New York, NY 10048. Copies of such material may also be obtained from the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Securities of PECO Energy are listed on the New York and Philadelphia Stock Exchanges, where reports, proxy material and other information concerning PECO Energy may be inspected. No separate financial statements of PECO Energy Capital have been included herein. PECO Energy and PECO Energy Capital do not consider that such financial statements would be material to holders of Preferred Trust Receipts offered hereby because PECO Energy Capital is a special purpose entity, has no independent operations and is not engaged in, and does not propose to engage in, any activity other than as set forth below. See "PECO Energy Capital." 1 7 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed with the SEC pursuant to Section 13 of the Exchange Act by PECO Energy (File No. 1-1401) are incorporated herein by reference: 1. PECO Energy's Annual Report on Form 10-K for the year ended December 31, 1994; 2. PECO Energy's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995; and 3. PECO Energy's Current Reports on Form 8-K dated February 2, 1995, May 24, 1995 and June 15, 1995. Each document filed subsequent to the date of this Offering Circular/Prospectus pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the termination of the offering shall be deemed to be incorporated by reference in this Offering Circular/Prospectus and shall be a part hereof from the date of filing of such document. Any statement contained herein or in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Offering Circular/Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Offering Circular/Prospectus. THIS OFFERING CIRCULAR/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. PECO ENERGY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM AN OFFERING CIRCULAR/PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL DOCUMENTS DESCRIBED ABOVE UNDER "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE," OTHER THAN EXHIBITS TO SUCH DOCUMENTS. SUCH REQUESTS SHOULD BE DIRECTED TO PECO ENERGY COMPANY, FINANCIAL DIVISION, S21-1, P.O. BOX 8699, PHILADELPHIA, PA 19101, (215) 841-5741. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE NOT LATER THAN FIVE BUSINESS DAYS PRIOR TO THE EXPIRATION DATE. TABLE OF CONTENTS
PAGE ---- Offering Circular/Prospectus Summary.................................................. Certain Investment Considerations..................................................... Comparison of Preferred Trust Receipts and Depositary Shares.......................... PECO Energy........................................................................... PECO Energy Capital................................................................... Coverage Ratios....................................................................... Selected Consolidated Financial Data.................................................. The Offer............................................................................. Listing and Trading of Preferred Trust Receipts and Depositary Shares................. Transactions and Arrangements Concerning the Offer.................................... Fees and Expenses; Transfer Taxes..................................................... Price Range of Depositary Shares...................................................... Description of the Preferred Trust Receipts........................................... Description of the Series B Preferred Securities...................................... Description of the Series B Guarantee................................................. Description of the Series B Subordinated Debentures and the Indenture................. Description of the Depositary Shares.................................................. United States Taxation................................................................ Legal Matters......................................................................... Experts...............................................................................
2 8 OFFERING CIRCULAR/PROSPECTUS SUMMARY The following summary does not purport to be complete and is qualified in its entirety by the more detailed information contained elsewhere in, or incorporated by reference in, this Offering Circular/Prospectus. PECO ENERGY PECO Energy Company, incorporated in Pennsylvania in 1929, is an operating utility which provides electric and gas service to the public in southeastern Pennsylvania. In 1994, PECO Energy's total revenues were $4 billion, with approximately 90% derived from its electric business and 10% from its gas business. PECO Energy's mailing address is P.O. Box 8699, Philadelphia, PA 19101, and its telephone number is (215) 841-4000. PECO ENERGY CAPITAL PECO Energy Capital, L.P. is a limited partnership formed in 1994 under the laws of the State of Delaware solely for the purpose of issuing one or more series of its limited partner interests (the "Preferred Securities") and lending the proceeds thereof to PECO Energy and entering into similar arrangements. PECO Energy Capital's mailing address is 1013 Centre Road, Suite 350F, Wilmington, DE 19805, and its telephone number is (302) 998-0592. THE OFFER Subject to the terms and conditions set forth herein and in the Letter of Transmittal, PECO Energy offers to effect the exchange of Preferred Trust Receipts, each representing a Series B Preferred Security, for up to 5,400,000 Depositary Shares. The exchange of Preferred Trust Receipts for Depositary Shares will be effected by (a) the delivery by PECO Energy of its % Deferrable Interest Subordinated Debentures, Series B (the "Series B Subordinated Debentures") to First Chicago Trust Company of New York (the "Exchange Agent"), which will receive the Series B Subordinated Debentures on behalf of the Holders (as defined herein) of the Depositary Shares in exchange for Depositary Shares, (b) the delivery by the Exchange Agent (acting pursuant to the directions of the Holders of the Depositary Shares) of the Series B Subordinated Debentures to PECO Energy Capital in consideration for the issuance and deposit by PECO Energy Capital of the Series B Preferred Securities to PECO Energy Capital Trust I under a Trust Agreement (the "Trust Agreement") with PNC Bank, Delaware, as Trustee (the "Trustee") and (c) the issuance and delivery by the Trust of the Preferred Trust Receipts to the Exchange Agent for distribution to the former Holders of the Depositary Shares. On July 3, 1995, the last day of trading prior to the first public announcement of the Offer, the closing sales price of the Depositary Shares on the NYSE as reported on the Composite Tape was $25 1/8 per share. Holders of Depositary Shares are urged to obtain a current market quotation for the Depositary Shares. PURPOSE OF THE OFFER - The purpose of the Offer is to reduce the after-tax financing costs of PECO Energy through the replacement of Depositary Shares with Preferred Trust Receipts. POTENTIAL BENEFITS TO EXCHANGING HOLDERS - The rate of Distributions on the Preferred Trust Receipts will be basis points greater than the dividend rate on the Depositary Shares. 3 9 - Dividends on the Depositary Shares accumulate but do not compound. Monthly Distributions on Preferred Trust Receipts will be cumulative and monthly Distributions in arrears after the monthly payment date therefor will accumulate additional Distributions thereon at the Distribution rate. The term "Distributions" as used herein shall include, as applicable, monthly distributions and distributions on monthly distributions in arrears. Monthly Distributions on the Series B Preferred Securities underlying the Preferred Trust Receipts will be made from interest payments by PECO Energy on the Series B Subordinated Debentures. PECO Energy can defer such interest payments for up to 60 consecutive months (the "Extension Period"). During such deferral, PECO Energy may not pay dividends on any of its capital stock, including the Depositary Shares. PECO Energy currently believes that it is unlikely that it (a) will discontinue declaring dividends on its capital stock, including the Depositary Shares, or (b) defer interest payments on the Series B Subordinated Debentures. - Monies for Distributions and liquidation and redemption payments on the Preferred Trust Receipts will only be available if PECO Energy pays principal and interest on the Series B Subordinated Debentures. Although the Series B Subordinated Debentures are subordinated to all Senior Indebtedness (as defined herein) of PECO Energy ($5.1 billion at March 31, 1995) and the Payment and Guarantee Agreement delivered by PECO Energy for the benefit of the holders of the Series B Preferred Securities (the "Series B Guarantee") is subordinated to all creditors of PECO Energy, in the event of a liquidation of PECO Energy, the Series B Subordinated Debentures and the Series B Guarantee must be satisfied in full before the holders of PECO Energy's preferred stock, including the Depositary Shares, will be entitled to any liquidation payments. - The Series B Preferred Securities and Preferred Trust Receipts will be redeemed upon payment at maturity of the Series B Subordinated Debentures on , 2025. As a result, the Preferred Trust Receipts are effectively subject to mandatory redemption; in contrast the Depositary Shares could remain outstanding indefinitely. POTENTIAL DISADVANTAGES TO EXCHANGING HOLDERS - Participation in the Offer will be a taxable event for Holders of Depositary Shares; Holders of Depositary Shares should consult their tax advisers. - If PECO Energy elects to defer payments of interest on the Series B Subordinated Debentures by extending the interest period thereon, Distributions on the Preferred Trust Receipts would also be deferred but the holders of the Preferred Trust Receipts would continue to accrue interest income (as original issue discount) in respect of the Preferred Trust Receipts which will be taxable to owners of the Preferred Trust Receipts. As a result, owners of the Preferred Trust Receipts during an Extension Period of interest on the Series B Subordinated Debentures will include their pro rata share of the interest in gross income in advance of the receipt of cash. - Holders of Preferred Trust Receipts will have no voting rights with respect to PECO Energy. If preferred dividends of PECO Energy are in arrears in an aggregate amount equivalent to four full quarterly dividend payments, the holders of PECO Energy's preferred stock, including Holders of Depositary Shares, have the right to elect the least number of directors necessary to constitute a majority of the full board of directors of PECO Energy. - While the Depositary Shares are not redeemable prior to October 1, 1997, the Series B Preferred Securities (and thus the Preferred Trust Receipts) in certain circumstances will be redeemable prior to that date upon the occurrence of a Tax Event (as defined herein) or an Investment Company Act Event (as defined herein). - While dividends on the Depositary Shares are eligible for the dividends received deduction for corporate holders, distributions on the Preferred Trust Receipts are not eligible for the dividends received deduction for corporate holders. - While application has been made for listing the Preferred Trust Receipts on the NYSE, the Preferred Trust Receipts have not yet been approved for listing. Even if the Preferred Trust Receipts are 4 10 approved for listing, the Preferred Trust Receipts are a new issue of securities with no established trading market. - Holders of the Depositary Shares are entitled to participate in PECO Energy's Dividend Reinvestment and Stock Purchase Plan. Holders of Preferred Trust Receipts will not be entitled to participate in such plan. POTENTIAL RISK TO NON-EXCHANGING HOLDERS - The liquidity and trading market for Depositary Shares which are not exchanged in the Offer could be adversely affected by the reduction in the number of publicly traded Depositary Shares resulting from the Offer. For more detailed information concerning the potential disadvantages to exchanging Holders of Depositary Shares and the potential risk to non-exchanging Holders of Depositary Shares, see "Certain Investment Considerations" and "United States Taxation" herein. TERMS OF THE OFFER BASIS OF EXCHANGE: One Preferred Trust Receipt for each Depositary Share validly tendered and accepted. MAXIMUM NUMBER OF SHARES; PRORATION: The Offer is for up to 5,400,000 Depositary Shares, unless reduced by PECO Energy in its sole discretion. If more than 5,400,000 Depositary Shares are validly tendered, acceptance of Depositary Shares of each tendering Holder will be pro rated. EXPIRATION DATE: 12:00 Midnight, New York City time on , 1995 unless extended by PECO Energy in its sole discretion or as required by law. EXCHANGE DATE: The date of issuance of the Preferred Trust Receipts will be five Business Days following the Expiration Date or up to 12 Business Days following the Expiration Date if proration of tendered Depositary Shares is required. WITHDRAWALS: Any time prior to Expiration Date and, unless accepted for exchange, at any time after 40 Business Days (defined, for purposes of the Offer, as any day other than a Saturday, Sunday or federal holiday) from , 1995. AMENDMENT; TERMINATION: PECO Energy may amend or terminate the Offer and not accept any Depositary Shares at any time prior to the Expiration Date, provided PECO Energy will not accept Depositary Shares if as of the Expiration Date for any reason there would be fewer than 400 record or beneficial holders of Preferred Trust Receipts as a result of the Exchange. PROCEDURES FOR TENDERING: In order to participate in the Offer, Holders of Depositary Shares must submit a Letter of Transmittal or Notice of Guaranteed Delivery and comply with the other procedures for tendering in accordance with instructions contained herein and in the Letter of Transmittal prior to the Expiration Date. LETTERS OF TRANSMITTAL, DEPOSITARY SHARES AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT ONLY TO THE EXCHANGE AGENT, NOT TO PECO ENERGY, PECO ENERGY CAPITAL, THE TRUSTEE, THE DEALER MANAGER OR THE INFORMATION AGENT. BENEFICIAL OWNERS: Any beneficial owner of Depositary Shares registered in the name of a broker/dealer, commercial bank, trust company or other nominee who 5 11 wishes to tender must instruct such registered holder to tender on behalf of such beneficial owner. GUARANTEED DELIVERY PROCEDURES: A tender may be effected in accordance with the guaranteed delivery procedures set forth in "The Offer -- Procedures for Tendering -- Guaranteed Delivery." EXCHANGE AGENT: First Chicago Trust Company of New York. INFORMATION AGENT: Georgeson & Company Inc. DEALER MANAGER: Merrill Lynch & Co. Questions and requests for assistance, requests for additional copies of this Offering Circular/Prospectus or of the Letter of Transmittal and requests for Notices of Guaranteed Delivery should be directed to the Information Agent. The address and telephone number of the Information Agent are set forth in "The Offer -- Exchange Agent and Information Agent" and on the outside back cover of this Offering Circular/Prospectus. Questions with respect to the Offer may be directed to the Merrill Lynch & Co. Capital Markets Desk at (212) 449-4913. PREFERRED TRUST RECEIPTS NATURE OF SECURITY: Each Preferred Trust Receipt represents a Series B Preferred Security DISTRIBUTIONS: Cumulative Distributions at the annual rate of % per annum payable monthly in arrears. Distributions in arrears after the monthly payment date therefor will accumulate additional Distributions thereon at the Distribution rate. Additionally, the Preferred Trust Receipts will accrue an additional distribution at the rate of 7.96% per annum of the liquidation amount thereof from August 1, 1995 up to but not including the Exchange Date, payable on the first Distribution payment date. DENOMINATIONS: $25 per Preferred Trust Receipt corresponding to the stated liquidation preference of Series B Preferred Securities. FORM: Certificated or Book-Entry REDEMPTION: Upon any redemption of Series B Preferred Securities, which are subject to the following redemptions: Optional: (i) After October 1, 1997 (ii) Upon a Tax Event Mandatory: (i) Upon an Investment Company Event (ii) Upon payment at maturity of the Series B Subordinated Debentures on , 2025 (iii) Upon redemption of the Series B Subordinated Debentures, which are subject to optional redemption upon a Tax Event or after October 1, 1997
LISTING: Application has been made for listing the Preferred Trust Receipts on the NYSE. In order to satisfy the NYSE listing requirements, acceptance of Depositary Shares validly tendered in the Offer is subject to the condition that as of the Expiration Date there be at least 400 record or beneficial holders of Preferred Trust Receipts to be issued in exchange for such Depositary Shares, which condition may not be waived. 6 12 SERIES B SUBORDINATED DEBENTURES: The Distribution rate and the Distribution and other payment dates for the Series B Preferred Securities represented by the Preferred Trust Receipts will correspond to the interest rate and the interest and other payment dates of the Series B Subordinated Debentures issued to PECO Energy Capital concurrently with the issuance of the Series B Preferred Securities. The Series B Subordinated Debentures will be issued under PECO Energy's Indenture dated as of July 1, 1994 between PECO Energy and Meridian Trust Company, as trustee (the "Indenture Trustee") as supplemented by a First Supplemental Indenture dated as of , 1995 (as so supplemented, the "Indenture"). SERIES B GUARANTEE: The Series B Guarantee guarantees payment of accumulated and unpaid monthly Distributions, amounts payable upon redemption, and amounts payable upon liquidation with respect to the Series B Preferred Securities, in each case, only to the extent that PECO Energy Capital has funds on hand legally available therefor and payment does not violate applicable law. If PECO Energy fails to make interest payments on its Series B Subordinated Debentures, PECO Energy Capital will not have sufficient funds to pay Distributions on the Series B Preferred Securities. The Series B Guarantee does not cover payment of Distributions when PECO Energy Capital does not have sufficient funds to pay such Distributions. In such event, the remedy of a holder of Series B Preferred Securities is to enforce the rights of PECO Energy Capital under the Series B Subordinated Debentures. SUBORDINATION OF PECO ENERGY OBLIGATIONS: The obligations of PECO Energy under the Series B Guarantee are subordinate and junior in right of payment to all general liabilities of PECO Energy and its obligations under the Series B Subordinated Debentures are subordinate and junior in right of payment to all present and future Senior Indebtedness of PECO Energy, which aggregated approximately $5.1 billion at March 31, 1995. CERTAIN UNITED STATES INCOME TAX CONSIDERATIONS The Exchange will be a taxable event. Gain or loss generally will be recognized in an amount equal to the difference between the fair market value on the Exchange Date of the Holder's pro rata share of the Series B Subordinated Debentures deemed received in the exchange and the exchanging Holder's tax basis in the Depositary Shares surrendered. For this purpose, the fair market value of the Series B Subordinated Debentures deemed issued in exchange for Depositary Shares on the Exchange Date will equal the fair market value of the Preferred Trust Receipts on that date. See "United States Taxation -- Receipt of Depositary Shares for Preferred Trust Receipts." No portion of the amounts received on the Preferred Trust Receipts will be eligible for the dividends received deduction. The Preferred Trust Receipts may trade at a price that does not fully reflect the value of accrued but unpaid interest with respect to the Series B Subordinated Debentures. Each holder of Preferred Trust Receipts (a "Securityholder") who disposes of his Preferred Trust Receipts between record dates for payments of distributions thereon will nevertheless be required to include his pro rata share of accrued but unpaid interest on the Series B Subordinated Debentures allocable monthly to the Trust through the date of disposition in income as ordinary income, and to add such amount to his adjusted tax basis in his pro rata share of the Series B Preferred Securities deemed disposed of. Accordingly, such a Securityholder will recognize a capital loss to the extent the selling price (which may not fully reflect the value of accrued but unpaid interest) is less than the Securityholder's adjusted tax basis (which will include accrued but unpaid interest). Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for United States federal income tax purposes. 7 13 CERTAIN INVESTMENT CONSIDERATIONS Holders of the Depositary Shares who plan to participate in the Offer should carefully consider, in addition to the information set forth elsewhere in this Offering Circular/Prospectus, the following: TAX CONSEQUENCES OF THE EXCHANGE The Exchange will be a taxable event. Generally, gain or loss will be recognized in an amount equal to the difference between the fair market value on the Expiration Date of the Holder's pro rata share of the Series B Subordinated Debentures deemed received in the Exchange and the exchanging Holder's tax basis in the Depositary Shares exchanged. See "United States Taxation -- Receipt of Depositary Shares for Preferred Trust Receipts." All Holders of the Depositary Shares are advised to consult their tax advisers regarding the United States federal, state, local and foreign tax consequences of the exchange of the Depositary Shares and the issuance of Preferred Trust Receipts. SUBORDINATE OBLIGATIONS OF SERIES B GUARANTEE AND SERIES B SUBORDINATED DEBENTURES PECO Energy's obligations under the Series B Guarantee are subordinate and junior in right of payment to all general liabilities of PECO Energy and its obligations under the Series B Subordinated Debentures are subordinate and junior in right of payment to all Senior Indebtedness of PECO Energy. At March 31, 1995, the Senior Indebtedness of PECO Energy aggregated $5.1 billion. There are no terms in the Series B Subordinated Debentures or the Series B Guarantee that limit PECO Energy's ability to incur additional indebtedness, including indebtedness that ranks senior to the Series B Subordinated Debentures and the Series B Guarantee. The Series B Guarantee guarantees payment of accumulated and unpaid monthly distributions, amounts payable on redemption, and amounts payable on liquidation with respect to the Series B Preferred Securities, in each case, however, only to the extent that PECO Energy Capital has funds on hand legally available therefor and payment thereof does not otherwise violate applicable law. If PECO Energy were to default on its obligation to pay interest or amounts payable on redemption or maturity of the Series B Subordinated Debentures, PECO Energy Capital would lack legally available funds for the payment of Distributions or amounts payable on redemption of the Series B Preferred Securities or upon liquidation of PECO Energy Capital, and in such event the holders of the Preferred Trust Receipts representing the Series B Preferred Securities would not be able to rely upon the Series B Guarantee for payment of such amounts. Instead, holders of the Preferred Trust Receipts representing the Series B Preferred Securities would be required to seek enforcement of PECO Energy Capital's rights against PECO Energy pursuant to the terms of the Indenture. See "Description of the Series B Guarantee -- Status of the Series B Guarantee" and "Description of the Series B Subordinated Debentures and the Indenture -- Subordination." OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX IMPACT OF EXTENSION PECO Energy has the right under the Indenture to extend interest payment periods on the Series B Subordinated Debentures for up to 60 consecutive months, and, as a consequence, monthly Distributions on the Series B Preferred Securities can be deferred by PECO Energy Capital during any such extended interest payment period. Distributions in arrears after the monthly payment date therefor will accumulate additional distributions thereon at the rate per annum of % thereof. In the event PECO Energy exercises its right to extend the interest payment periods on the Series B Subordinated Debentures, PECO Energy may not declare dividends on any shares of its capital stock during such extension period. PECO Energy currently believes that the extension of an interest payment period is unlikely. See "Description of the Series B Subordinated Debentures and the Indenture -- Option to Extend Interest Payment Period." Should an extended interest payment period occur, PECO Energy Capital will continue to accrue income for United States federal income tax purposes which will be allocated, but not distributed, to the holders of the Preferred Trust Receipts, as the owners for tax purposes of the Series B Preferred Securities represented by the Preferred Trust Receipts. As a result, the owner will include such interest in gross income for United States federal income tax purposes in advance of the receipt of cash, and will not receive the cash related to 8 14 such income if the owner disposes of the Preferred Trust Receipts prior to the record date for payment of Distributions. See "United States Taxation -- Potential Extension of Payment Period." LISTING AND TRADING OF PREFERRED TRUST RECEIPTS AND DEPOSITARY SHARES The Preferred Trust Receipts constitute a new issue of securities with no established trading market. Application has been made for listing the Preferred Trust Receipts on the NYSE. Listing on the NYSE will be subject to meeting the requirements of the NYSE. Even if approval for listing is received, there can be no assurance that an active market for the Preferred Trust Receipts will develop or be sustained in the future on the NYSE. Although the Dealer Manager has indicated to PECO Energy and PECO Energy Capital that it intends to make a market in the Preferred Trust Receipts as permitted by applicable laws and regulations prior to the commencement of trading on the NYSE, it is not obligated to do so and may discontinue any such market-making at any time without notice. Accordingly, no assurance can be given as to the liquidity of, or trading markets for, the Preferred Trust Receipts. In order to satisfy the NYSE listing requirements, acceptance of Depositary Shares validly tendered in the Offer is subject to the condition that as of the Expiration Date there be at least 400 record or beneficial holders of Preferred Trust Receipts as a result of the Exchange, which condition may not be waived by PECO Energy. The liquidity and trading market for Depositary Shares which are not exchanged in the Offer could be adversely affected by the reduction in the number of publicly traded Depositary Shares resulting from the Offer. The Offer is for up to 5,400,000 Depositary Shares (or 96.4% of the 5,600,000 Depositary Shares outstanding) rather than for all the outstanding Depositary Shares, to reduce the risk that the Depositary Shares would be subject to delisting following consummation of the Offer. Under the rules of the NYSE, preferred securities such as the Depositary Shares are subject to delisting if (i) the aggregate value of publicly held shares is less than $2 million and (ii) the number of publicly held shares is less than 100,000. Since at least 200,000 Depositary Shares will remain outstanding following consummation of the Offer, the number of outstanding Depositary Shares will exceed the delisting criteria set forth in clause (ii) above. In addition, based on the market price of the Depositary Shares on the NYSE ($25 1/8 on July 3, 1995, the closing sales price of the Depositary Shares on the NYSE on the last trading day immediately prior to PECO Energy's first public announcement of the Offer, and $ on , 1995), PECO Energy believes that the aggregate value of the minimum number (200,000) of Depositary Shares which will be outstanding following consummation of the Offer should exceed the delisting criteria set forth in clause (i) above. See "Price Range of Depositary Shares." If less than 5,400,000 Depositary Shares are validly tendered, then the number of Depositary Shares remaining outstanding, and the aggregate value thereof, will be even greater. POSSIBLE REDEMPTION OF PREFERRED TRUST RECEIPTS PRIOR TO OCTOBER 1, 1997 The Depositary Shares are not subject to redemption prior to October 1, 1997. Except as described below, the Series B Preferred Securities will not be subject to redemption prior to October 1, 1997. If a Tax Event shall occur and be continuing, the Series B Preferred Securities will be subject to redemption, at the option of PECO Energy Capital Corp., a Delaware corporation and a wholly owned subsidiary of PECO Energy, as the sole general partner (the "General Partner") of PECO Energy Capital, in whole or in part. If an Investment Company Act Event shall occur and be continuing, the Series B Preferred Securities will be subject to mandatory redemption following the occurrence of such event. In the event the Series B Preferred Securities are redeemed, an equal amount of Preferred Trust Receipts will be redeemed. See "Description of the Series B Preferred Securities -- Special Event Redemptions" and "Description of the Series B Subordinated Debentures and the Indenture -- General." 9 15 COMPARISON OF PREFERRED TRUST RECEIPTS AND DEPOSITARY SHARES The following is a brief summary of certain terms of the Preferred Trust Receipts and the Depositary Shares. For a more complete description of the Preferred Trust Receipts, see "Description of the Preferred Trust Receipts" and "Description of the Series B Preferred Securities." For a more complete description of the Series B Subordinated Debentures which will represent the sole source for the payment of distributions and other payments on the Series B Preferred Securities represented by the Preferred Trust Receipts, see "Description of the Series B Subordinated Debentures and the Indenture."
PREFERRED TRUST RECEIPTS DEPOSITARY SHARES -------------------------------- -------------------------------- Nature of Security....... Represents a Series B Preferred A one-fourth interest in $7.96 Security, which represents a Cumulative Preferred Stock limited partner interest in PECO issued by PECO Energy. Energy Capital. Distribution/Dividend Rate................... % per annum payable $1.99 ($7.96 per share of $7.96 monthly in arrears on the Cumulative Preferred Stock) per last day of each month of each annum payable on February 1, May year, commencing 1, August 1 and November 1 of , 1995 from and including the each year, out of funds legally Exchange Date but only if, and available therefor, when, as and to the extent that, if declared by PECO Energy's Distributions are made in Board of Directors. Dividends respect of the Series B are cumulative. Accumulated Preferred Securities. unpaid dividends do not Distributions in arrears after accumulate additional dividends the monthly payment date thereon. therefor, including during any Extension Period for the Series B Subordinated Debentures, accumulate additional Distributions thereon at the rate of % per annum. Optional Redemption...... See "Maturity/Mandatory Redeemable at the option of PECO Redemption" below. Energy on and after October 1, 1997, in whole or in part, at a redemption price equal to 100% of the stated liquidation preference of the shares to be redeemed, plus accrued and unpaid dividends, if any, to the redemption date.
10 16
PREFERRED TRUST RECEIPTS DEPOSITARY SHARES -------------------------------- -------------------------------- Maturity/Mandatory Redemption............. The Preferred Trust Receipts None will be redeemed upon: (1) the redemption of the Series B Preferred Securities upon the payment at maturity of the Series B Subordinated Debentures, (2) optional redemption, in whole or in part, of the Series B Subordinated Debentures or Series B Preferred Securities on or after October 1, 1997 or (3) the optional redemption of the Series B Preferred Securities upon the occurrence of a Tax Event or mandatory redemption of the Series B Preferred Securities upon occurrence of an Investment Company Act Event. Any such redemption of the Preferred Trust Receipts will be at a redemption price equal to 100% of the stated liquidation preference of the Series B Preferred Securities to be redeemed, plus accrued and unpaid Distributions, if any, to the redemption date, including Distributions accrued as a result of PECO Energy's election to defer payments of interest on the Series B Subordinated Debentures. The Series B Subordinated Debentures have a final maturity of , 2025. See "Description of the Preferred Trust Receipts -- Redemption of Preferred Trust Receipts" and "Description of the Series B Preferred Securities -- Mandatory Redemption" and "-- Special Event Redemptions."
11 17
PREFERRED TRUST RECEIPTS DEPOSITARY SHARES -------------------------------- -------------------------------- Subordination............ The Series B Preferred Subordinate to claims of Securities will rank subordinate creditors of PECO Energy, to claims of creditors of PECO including the Subordinated Energy Capital, but senior to Debentures, but senior to the the general partner interests in common stock of PECO Energy and PECO Energy Capital and pari pari passu with all other passu with all other Preferred outstanding series of preferred Securities of PECO Energy stock of PECO Energy. Capital. The obligations of PECO Energy under the Series B Guarantee are subordinate and junior in right of payment to all general liabilities of PECO Energy and its obligations under the Series B Subordinated Debentures are subordinate and junior in right of payment to all present and future Senior Indebtedness of PECO Energy, which aggregated approximately $5.1 billion at March 31, 1995, but senior in payment to all capital stock of PECO Energy, including the Depositary Shares. Listing.................. Application has been made for The Depositary Shares are listed listing the Preferred Trust on the NYSE. Receipts on the NYSE. In order to satisfy the NYSE listing requirements, acceptance of Depositary Shares validly tendered in the Offer is subject to the condition that as of the Expiration Date there be at least 400 record or beneficial holders of Preferred Trust Receipts to be issued in exchange for such Depositary Shares, which condition may not be waived. Federal Income Tax Consequences of Distributions/ Dividends.............. Distributions are not eligible Dividends are eligible for the for the dividends received dividends received deduction for deduction for corporate holders. corporate holders.
12 18
PREFERRED TRUST RECEIPTS DEPOSITARY SHARES -------------------------------- -------------------------------- Voting Rights/Enforcement..... If (i) PECO Energy Capital fails If dividends shall be in arrears to pay Distributions in full on in an aggregate amount any series of the Preferred equivalent to four quarterly Securities for 18 consecutive dividend payments, the holders monthly distribution periods, of PECO Energy preferred stock, (ii) an Event of Default (as including the holders of defined in the Indenture) occurs Depositary Shares, have the and is continuing, or (iii) PECO right to elect the smallest Energy is in default on any of number of directors necessary to its payment obligations under constitute a majority of the the Payment and Guarantee full board of directors of PECO Agreements (the "Guarantees") Energy. relating to the Preferred Securities issued by PECO Energy Capital, then the holders of the Preferred Securities, including the Trust acting through the Trustee at the direction of the holders of the Preferred Trust Receipts, acting as a single class, will be entitled by a vote of the majority of the aggregate stated liquidation preference of the outstanding Preferred Securities to appoint a special representative (the "Special Representative") to enforce PECO Energy Capital's rights against PECO Energy under the Deferrable Interest Subordinated Debentures of PECO Energy (the "Subordinated Debentures") and the Indenture and the obligations undertaken by PECO Energy under the Guarantees, including, after failure to pay distributions for 60 consecutive monthly distribution periods on the Preferred Securities, the payment of distributions on the Preferred Securities.
PECO ENERGY PECO Energy, incorporated in Pennsylvania in 1929, is an operating utility which provides electric and gas service to the public in southeastern Pennsylvania. The total area served by PECO Energy covers 2,107 square miles. Electric service is supplied in an area of 1,972 square miles with a population of about 3,638,000, including 1,600,000 in the City of Philadelphia. Approximately 94% of the electric service area and 63% of retail kilowatthour sales are in the suburbs around Philadelphia, and 6% of the service area and 37% of such sales are in the City of Philadelphia. In 1994, approximately 60% of PECO Energy's electric output was generated from nuclear sources. PECO Energy estimates for 1995 that 59% of its electric output will come from nuclear sources. Natural gas service is supplied in a 1,475-square-mile area of southeastern Pennsylvania adjacent to Philadelphia with a population of 1,900,000. PECO Energy and its subsidiaries hold franchises to the extent necessary to operate in the areas served. 13 19 PECO ENERGY CAPITAL PECO Energy Capital is a limited partnership formed in 1994 under the laws of the State of Delaware. All of its general partner interests are owned by PECO Energy Capital Corp., as the General Partner. As a limited partnership, all of the business and affairs of PECO Energy Capital are managed by the General Partner. PECO Energy Capital was created solely for the purpose of issuing the Preferred Securities and lending the proceeds thereof to PECO Energy, and entering into similar financing arrangements. Such loans are evidenced by the Subordinated Debentures issued by PECO Energy under the Indenture. The Subordinated Debentures are the only assets of PECO Energy Capital and the only revenues of PECO Energy Capital are interest on the Subordinated Debentures. The General Partner pays all of PECO Energy Capital's operating expenses and has general liability for all of PECO Energy Capital's obligations. COVERAGE RATIOS PECO Energy's Ratio of Earnings to Fixed Charges for each of the periods indicated was as follows:
3 MONTHS ENDED MARCH YEARS ENDED DECEMBER 31, 31, - ---------------------------------------- ------------- 1990 1991 1992 1993 1994 1994 1995 - ---- ---- ---- ---- ---- ---- ---- 1.31(1) 2.55 2.43 3.15 2.66(2) 3.58 3.36
The Ratio of Earnings to Fixed Charges represents, on a pre-tax basis, the number of times earnings cover fixed charges. Earnings consist of net income to which has been added fixed charges and taxes based on income of PECO Energy. Fixed charges consist of interest on funded indebtedness, other interest, amortization of net gain on reacquired debt and net discount on debt and the interest portion of all rentals charged to income. PECO Energy's Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends for each of the periods indicated was as follows:
3 MONTHS ENDED MARCH YEARS ENDED DECEMBER 31, 31, - ---------------------------------------- ------------- 1990 1991 1992 1993 1994 1994 1995 - ---- ---- ---- ---- ---- ---- ---- 1.04(1) 2.14 2.06 2.67 2.32(2) 3.05 3.07
- --------------- (1) Reflects the one-time, after-tax charge against income of $250 million associated with various disallowances made by the Pennsylvania Public Utility Commission in the Limerick Unit No. 2 rate order and the one-time, after-tax charge against income of $150 million associated with PECO Energy's 1990 early retirement plan. (2) Reflects a one-time after-tax charge against income of $254 million associated with early retirement and separation programs. The Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends represents, on a pre-tax basis, the number of times earnings cover fixed charges and preferred stock dividends. Earnings consist of net income to which has been added fixed charges and taxes based on income of PECO Energy. Combined fixed charges and preferred stock dividends consist of interest on funded indebtedness, other interest, amortization of net gain on reacquired debt and net discount on debt, preferred stock dividends (increased to reflect the pre-tax earnings required to cover such dividend requirements) and the interest portion of all rentals charged to income. 14 20 SELECTED CONSOLIDATED FINANCIAL DATA Reference is made to PECO Energy's Annual Report on Form 10-K for the fiscal year ended December 31, 1994 (the "Form 10-K"), which is incorporated by reference in this Offering Circular/Prospectus and which contains PECO Energy's audited consolidated financial statements, including the consolidated income statement for the three fiscal years in the period ended December 31, 1994, consolidated balance sheets as of December 31, 1993 and 1994, and the related notes. Selected unaudited financial information as of and for the three months ended March 31, 1994 and 1995 should be read in conjunction with the audited consolidated financial statements and related notes contained in the Form 10-K and the unaudited consolidated financial statements contained in PECO Energy's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, which report is also incorporated by reference in this Offering Circular/Prospectus. Such unaudited information reflects, in the opinion of management, all adjustments, consisting of only normal accruals, necessary for a consistent presentation with the audited financial information. Results of operations for the three months ended March 31, 1995 are not necessarily indicative of the results to be expected for the full fiscal year.
THREE MONTHS ENDED MARCH 31, YEARS ENDED DECEMBER 31, --------------------- ----------------------------------------------------------- 1995 1994 1994 1993 1992 1991 1990 --------- --------- --------- --------- --------- --------- --------- (MILLIONS OF DOLLARS) SUMMARY OF EARNINGS Operating Revenues........................ $ 1,058.6 $ 1,128.4 $ 4,040.6 $ 3,988.1 $ 3,962.5 $ 4,018.6 $ 3,786.7 Operating Income.......................... 256.7 260.3 829.6 1,035.4 1,033.4 1,081.2 767.7 Income from Continuing Operations......... 152.0 159.4 426.7 590.6 478.9 534.7 105.8 Net Income................................ 152.0 159.4 426.7 590.6 478.9 534.7 214.2 Earnings Applicable to Common Stock....... 145.9 148.6 389.4(2) 541.6 418.2 468.6 123.9(1) Earnings Per Average Common Share From Continuing Operations (Dollars)......... 0.66 0.67 1.76 2.45 1.90 2.15 0.07 Earnings Per Average Common Shares (Dollars)............................... 0.66 0.67 1.76 2.45 1.90 2.15 0.58 Dividends Per Common Share (Dollars)...... 0.405 0.38 1.545 1.43 1.325 1.225 1.45 Common Stock Equity (Per Share)........... 19.67 19.53 19.41 19.25 18.24 17.69 16.71 Average Shares of Common Stock Outstanding (Millions).............................. 221.7 221.5 221.6 221.1 220.2 218.2 214.4 FINANCIAL CONDITION AT END OF PERIOD Net Utility Plant, at Original Cost....... 10,815.3 10,735.1 10,828.7 10,763.0 10,691.2 10,598.4 10,591.3 Leased Property, Net...................... 170.7 180.4 174.6 194.7 210.0 223.8 241.3 Total Current Assets...................... 565.8 635.9 454.8 514.8 550.0 783.2 745.0 Total Deferred Debits and Other Assets.... 3,626.8 3,634.0 3,634.7 3,559.8 1,127.0 918.1 938.6 --------- --------- --------- --------- --------- --------- --------- Total Assets............................ $15,178.6 $15,185.4 $15,092.8 $15,032.3 $12,578.2 $12,523.5 $12,516.2 ======== ======== ======== ======== ======== ======== ======== Common Shareholders' Equity............... $ 4,362.3 $ 4,327.8 $ 4,302.5 $ 4,263.4 $ 4,022.2 $ 3,892.3 $ 3,624.5 Preferred and Preference Stock Without Mandatory Redemption............ 277.5 422.5 277.5 422.5 422.5 422.5 422.5 With Mandatory Redemption............... 92.7 185.4 92.7 186.5 231.1 315.6 330.9 Guaranteed Interest in Preferred Securities of Partnership............... 221.3 -- 221.3 -- -- -- -- Long-Term Debt............................ 4,602.3 4,775.8 4,785.6 4,884.3 5,203.9 5,415.6 5,830.8 --------- --------- --------- --------- --------- --------- --------- Total Capitalization...................... 9,556.1 9,711.5 9,679.6 9,756.7 9,879.7 10,046.0 10,208.7 --------- --------- --------- --------- --------- --------- --------- Total Current Liabilities................. 1,075.1 1,085.9 878.6 954.6 830.6 823.4 783.8 --------- --------- --------- --------- --------- --------- --------- Total Deferred Credits and Other Liabilities............................. 4,547.4 4,388.0 4,534.6 4,321.0 1,867.9 1,654.1 1,523.7 --------- --------- --------- --------- --------- --------- --------- Total Capitalization and Liabilities...... $15,178.6 $15,185.4 $15,092.8 $15,032.3 $12,578.2 $12,523.5 $12,516.2 ======== ======== ======== ======== ======== ======== ========
- --------------- (1) Reflects the one-time, after-tax charge against income of $250 million associated with various disallowances made by the Pennsylvania Public Utility Commission in the Limerick Unit No. 2 rate order and the one-time, after-tax charge against income of $150 million associated with PECO Energy's 1990 early retirement plan. (2) Reflects a one-time after-tax charge against income of $254 million associated with early retirement and separation programs. 15 21 THE OFFER PURPOSE OF THE OFFER The purpose of the Offer is to reduce the after-tax financing costs of PECO Energy through the replacement of Depositary Shares with Preferred Trust Receipts. Although the Distribution rate on the Preferred Trust Receipts will be higher than the dividend rate on the Depositary Shares, PECO Energy will deduct interest payable on the Series B Subordinated Debentures for federal income tax purposes; dividends payable on the Depositary Shares are not deductible by PECO Energy for federal income tax purposes. Except as described herein, PECO Energy has no present plans or intentions to make acquisitions of or offers for the Depositary Shares. PECO Energy will continue to monitor the market for the Depositary Shares outstanding after the expiration of the Offer and reserves the right, in its sole discretion, subject to applicable law, to acquire and to make offers for Depositary Shares subsequent to the Expiration Date for cash or in exchange for other securities, by optional redemption of the Depositary Shares, after October 1, 1997, or otherwise. The terms of any such acquisitions or offers may differ from the terms of the Offer. Such acquisitions or offers, if any, may depend upon, among other things, the market price of the Depositary Shares, and general economic and market conditions. GENERAL PARTICIPATION IN THE OFFER IS VOLUNTARY AND HOLDERS OF DEPOSITARY SHARES SHOULD CAREFULLY CONSIDER WHETHER TO ACCEPT. NO RECOMMENDATION TO HOLDERS TO TENDER OR TO REFRAIN FROM TENDERING IN THE OFFER IS MADE BY PECO ENERGY, THE BOARD OF DIRECTORS OF PECO ENERGY, PECO ENERGY CAPITAL OR THE GENERAL PARTNER. HOLDERS OF DEPOSITARY SHARES ARE URGED TO CONSULT THEIR FINANCIAL AND TAX ADVISERS IN MAKING THEIR DECISIONS ON WHAT ACTION TO TAKE IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES. Holders of Depositary Shares will not have any appraisal or dissenters' rights under the Pennsylvania Business Corporation Law in connection with the Offer. PECO Energy intends to conduct the Offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC thereunder. PECO Energy has received all regulatory approvals necessary to consummate the Exchange. Unless the context requires otherwise, the term "Holder" with respect to the Offer means (i) any person in whose name any Depositary Shares are registered on the books of the Depositary or (ii) any other person who has obtained a properly completed stock power from the registered Holder, or (iii) any person whose Depositary Shares are held of record by The Depository Trust Company ("DTC"), Philadelphia Depository Trust Company or Midwest Securities Trust Company (collectively, the "Depositories" and each, a "Depository") who desires to deliver such Depositary Shares by book-entry transfer at such Depository. The $7.96 Cumulative Preferred Stock represented by the Depositary Shares exchanged pursuant to the Offer will be retired. PECO Energy will take all actions necessary to restore such retired Preferred Stock to the status of authorized but unissued Preferred Stock which may thereafter be reissued. TERMS OF THE OFFER Upon the terms and subject to the conditions set forth herein and in the Letter of Transmittal, PECO Energy will offer to effect an exchange of Preferred Trust Receipts for up to 5,400,000 outstanding Depositary Shares. The exchange of Preferred Trust Receipts for Depositary Shares will be effected by (a) the delivery by PECO Energy of its Series B Subordinated Debentures to the Exchange Agent, which will receive the Series B Subordinated Debentures on behalf of the Holders of the Depositary Shares, in exchange for Depositary Shares, (b) the delivery by the Exchange Agent (acting pursuant to the directions of the Holders of Depositary Shares) of the Series B Subordinated Debentures to PECO Energy Capital in consideration for the issuance and deposit by PECO Energy Capital of the Series B Preferred Securities to and with the Trust under the Trust Agreement and (c) the issuance and delivery by the Trust of the Preferred Trust Receipts to the Exchange Agent for distribution to the former Holders of the Depositary Shares. 16 22 Holders of Depositary Shares will not have the right to retain the Series B Subordinated Debentures delivered to the Exchange Agent in exchange for Depositary Shares validly tendered and accepted. The Offer will be effected on the basis of one Preferred Trust Receipt for each Depositary Share validly tendered and accepted for exchange. See "-- Procedures for Tendering." Upon the terms and subject to the conditions set forth herein and in the Letter of Transmittal, PECO Energy will accept up to 5,400,000 Depositary Shares validly tendered and not withdrawn prior to the Expiration Date and, unless the Offer has been withdrawn or terminated, PECO Energy will cause to be delivered Preferred Trust Receipts to tendering Holders of Depositary Shares as promptly as practicable following the Exchange Date. PECO Energy expressly reserves the right, in its sole discretion, to delay acceptance for exchange of Depositary Shares tendered under the Offer and the delivery of the Preferred Trust Receipts with respect to the Depositary Shares accepted for exchange (subject to Rules 13e-4 and 14e-1 under the Exchange Act, which require that PECO Energy consummate the Offer or return the Depositary Shares deposited by or on behalf of the Holders thereof promptly after the termination or withdrawal of the Offer), or to withdraw or terminate the Offer at any time prior to the Expiration Date for any reason. In all cases, except to the extent waived by PECO Energy, delivery of Preferred Trust Receipts issued with respect to the Depositary Shares accepted for exchange pursuant to the Offer will be made only after timely receipt by the Exchange Agent of Depositary Shares (or confirmation of book-entry transfer thereof), a properly completed and duly executed Letter of Transmittal or Agent's Message (as defined herein), as applicable, and any other documents required thereby. As of the date of this Offering Circular/Prospectus, there are 5,600,000 Depositary Shares outstanding. This Offering Circular/Prospectus, together with the Letter of Transmittal, is being sent to all registered Holders as of , 1995. PECO Energy will accept validly tendered Depositary Shares (or defectively tendered Depositary Shares with respect to which PECO Energy has waived such defect) by giving oral or written notice thereof to the Exchange Agent. The Exchange Agent will act as agent for the tendering Holders for the purpose of receiving Depositary Shares from, and remitting Preferred Trust Receipts to, tendering Holders who are participating in the Offer and whose shares are accepted. Upon the terms and subject to the conditions of the Offer, delivery of Preferred Trust Receipts to tendering Holders will be made as promptly as practicable following the Expiration Date. Unless proration is necessary, the Preferred Trust Receipts will be issued and distributed by the Exchange Agent on the fifth Business Day after the Expiration Date, or up to 12 Business Days following the Expiration Date if proration of tendered Depositary Shares is required. If proration of tendered Depositary Shares is required, because of the difficulty in determining the number of Depositary Shares validly tendered (including shares tendered by the guaranteed delivery procedures described in "-- Procedures for Tendering"), PECO Energy does not expect that it would be able to announce the final proration factor or to commence the Exchange for any Depositary Shares pursuant to the Offer until approximately seven Business Days after the Expiration Date. Preliminary results of the proration will be announced by press release as promptly as practicable after the Expiration Date. Holders of Depositary Shares may obtain such preliminary information from the Dealer Manager, the Information Agent or the Exchange Agent and may also be able to obtain such information from their brokers. If any tendered Depositary Shares are not accepted for exchange because of an invalid tender, proration or withdrawal or termination by PECO Energy of the Offer, unless otherwise requested by the Holder under "Special Delivery Instructions" in the Letter of Transmittal, such Depositary Shares will be returned, without expense, to the tendering Holder thereof (or in the case of Depositary Shares tendered by book-entry transfer into the Exchange Agent's account at the Depository where such Depositary Shares are held, such Depositary Shares will be credited to an account maintained at the Depository designated by the participant therein who so delivered such Depositary Shares), as promptly as practicable after the Expiration Date or the withdrawal or termination of the Offer. 17 23 Holders who tender Depositary Shares in the Offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letter of Transmittal, transfer taxes with respect to the exchange of Depositary Shares pursuant to the Offer. See "Fees and Expenses; Transfer Taxes." Holders who tender Depositary Shares held in global form shall receive Preferred Trust Receipts in global form and holders tendering Depositary Shares held directly in certificated form shall receive Preferred Trust Receipts in certificated form in each case unless otherwise provided in the Letter of Transmittal. See "-- Procedures for Tendering." EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION The Offer will expire on the Expiration Date. PECO Energy reserves the right to extend the Offer in its sole discretion at any time and from time to time by giving oral or written notice to the Exchange Agent and by timely public announcement communicated or as otherwise required by applicable law or regulation. During any extension of the Offer, all Depositary Shares previously tendered pursuant to the Offer and not withdrawn will remain subject to the Offer. PECO Energy expressly reserves the right to (i) extend, amend or modify the terms of the Offer in any manner and (ii) withdraw or terminate the Offer and not accept for exchange any Depositary Shares at any time prior to the Expiration Date for any reason. PECO also reserves the right to waive any condition of the Offer, including the condition that at least 2,800,000 Depositary Shares are tendered in the Offer; provided that in order to satisfy the NYSE listing requirements, acceptance of Depositary Shares validly tendered in the Offer is subject to the condition that as of the Exchange Date there be at least 400 record or beneficial holders of Preferred Trust Receipts to be issued in exchange for such Depositary Shares, which condition may not be waived. If PECO Energy makes a material change in the terms of the Offer or if it waives a material condition of the Offer, PECO Energy will extend the Offer. The minimum period for which the Offer will be extended following a material change or waiver, other than a change in the amount of Depositary Shares sought for exchange, the consideration offered therefor or the fee paid to the Soliciting Dealers, will depend upon the facts and circumstances, including the relative materiality of the change or waiver. With respect to a change in the amount of Depositary Shares sought, the consideration offered therefor or the fee paid to the Soliciting Dealers, if required, the Offer will remain open for a minimum of ten Business Days following public announcement of such change. Any withdrawal or termination of the Offer will be followed as promptly as practicable by public announcement thereof. If PECO Energy withdraws or terminates the Offer, it will give immediate notice to the Exchange Agent, and all Depositary Shares theretofore tendered pursuant to the Offer will be returned promptly to the tendering Holders thereof. See "-- Withdrawal of Tenders." ACCUMULATED DIVIDENDS AND DISTRIBUTIONS The Preferred Trust Receipts will bear Distributions at an annual rate of % from and including the Exchange Date. Dividends accumulated on the Depositary Shares which have been accepted for exchange in the Offer after July 31, 1995 will not be paid. In lieu thereof, holders of Preferred Trust Receipts will be entitled to an additional distribution at the rate of 7.96% per annum (equal to the dividend rate on the Depositary Shares) from and including August 1, 1995 up to but not including the Exchange Date, payable at the time of the first Distribution payment on the Preferred Trust Receipts. See "Description of Preferred Trust Receipts -- Distributions." PROCEDURES FOR TENDERING The tender of Depositary Shares by a Holder thereof pursuant to one of the procedures set forth below will constitute an agreement between such Holder and PECO Energy in accordance with the terms and subject to the conditions set forth herein and in the Letter of Transmittal and PECO Energy's right to terminate or withdraw the Offer at any time for any reason. EACH HOLDER OF THE DEPOSITARY SHARES WISHING TO PARTICIPATE IN THE OFFER MUST (I) PROPERLY COMPLETE AND SIGN THE LETTER OF TRANSMITTAL IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED HEREIN AND IN THE LETTER OF TRANSMITTAL (EXCEPT WHEN AN AGENT'S MESSAGE IS APPROPRIATE AND UTILIZED), TOGETHER WITH ANY REQUIRED 18 24 SIGNATURE GUARANTEES, AND DELIVER THE SAME TO THE EXCHANGE AGENT, AT ONE OF ITS ADDRESSES SET FORTH IN "-- EXCHANGE AGENT AND INFORMATION AGENT" PRIOR TO THE EXPIRATION DATE AND EITHER (A) CERTIFICATES FOR THE DEPOSITARY SHARES MUST BE RECEIVED BY THE EXCHANGE AGENT AT SUCH ADDRESS OR (B) SUCH DEPOSITARY SHARES MUST BE TRANSFERRED PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER DESCRIBED BELOW AND A CONFIRMATION OF SUCH BOOK-ENTRY TRANSFER MUST BE RECEIVED BY THE EXCHANGE AGENT, IN EACH CASE PRIOR TO THE EXPIRATION DATE OR (II) COMPLY WITH THE GUARANTEED DELIVERY PROCEDURES DESCRIBED BELOW. LETTERS OF TRANSMITTAL, DEPOSITARY SHARES AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT ONLY TO THE EXCHANGE AGENT, NOT TO PECO ENERGY, PECO ENERGY CAPITAL, THE TRUSTEE, THE DEALER MANAGER OR THE INFORMATION AGENT. Special Procedure for Beneficial Owners. Any beneficial owner whose Depositary Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered Holder promptly and instruct such registered Holder to tender on such beneficial owner's behalf. If such beneficial owner wishes to tender on its own behalf, such owner must, prior to completing and executing the Letter of Transmittal and delivering its Depositary Shares, either make appropriate arrangements to register ownership of the Depositary Shares in such owner's name or obtain a properly completed stock power from the registered Holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the Expiration Date. THE METHOD OF DELIVERY OF DEPOSITARY SHARES AND ALL OTHER DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDER. IF SENT BY MAIL, IT IS RECOMMENDED THAT (A) REGISTERED MAIL, RETURN RECEIPT REQUESTED, BE USED, (B) INSURANCE BE OBTAINED, AND (C) THE MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT DELIVERY TO THE EXCHANGE AGENT ON OR BEFORE THE EXPIRATION DATE. Signature Guarantees. If tendered Depositary Shares are registered in the name of the signer of the Letter of Transmittal and the Preferred Trust Receipts to be issued in exchange therefor are to be issued (and any untendered Depositary Shares are to be reissued) in the name of the registered holder (which includes any participant in a Depository whose name appears on a security listing as the owner of Depositary Shares), the signature of such signer need not be guaranteed. If the tendered Depositary Shares are registered in the name of someone other than the signer of the Letter of Transmittal, or if Preferred Trust Receipts issued in exchange therefor are to be issued in the name of any other person other than the signer of the Letter of Transmittal, such tendered Depositary Shares must be endorsed or accompanied by written instruments of transfer in form satisfactory to First Chicago Trust Company of New York, transfer agent for the Depositary Shares, and duly executed by the registered Holder, and the signature on the endorsement or instrument of transfer must be guaranteed by a financial institution (including most banks, savings and loans associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program or the Stock Exchange Medallion Program (any of the foregoing hereinafter referred to as an "Eligible Institution"). If the Depositary Shares not exchanged are to be delivered to an address other than that of the registered Holder appearing on the register for the Depositary Shares, the signature in the Letter of Transmittal must be guaranteed by an Eligible Institution. Book-Entry Transfer. PECO Energy understands that the Exchange Agent has an account or will make a request promptly after the date of this Offering Circular/Prospectus to establish accounts with respect to the Depositary Shares at DTC and such other Depositories which hold Depositary Shares for the purpose of facilitating the Offer, and subject to the establishment thereof, any financial institution that is a participant in DTC's or such other Depository's system may make book-entry delivery of Depositary Shares by causing DTC or such other Depository to transfer such Depositary Shares into the Exchange Agent's account with respect to the Depositary Shares in accordance with DTC's Automated Tender Offer Program ("ATOP") procedures, in the case of DTC, or the procedures of such other Depository, in the case of such other Depository, for such book-entry transfers. However, the exchange for the Depositary Shares so tendered will only be made after timely confirmation (a "Book-Entry Confirmation") of such book-entry transfer of Depositary Shares into the Exchange Agent's account, and timely receipt by the Exchange Agent of an Agent's Message (as such term is defined in the next sentence), in the case of a book-entry transfer effected by DTC, or the Letter of 19 25 Transmittal and any other documents required by the Letter of Transmittal, in the case of DTC or any other Depository. The term "Agent's Message" means a message, transmitted by DTC and received by the Exchange Agent and forming a part of a Book-Entry Confirmation, which states that DTC has received an express acknowledgment from a participant tendering Depositary Shares that are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal, and that PECO Energy may enforce such agreement against such participant. Guaranteed Delivery. If a Holder desires to participate in the Offer and time will not permit a Letter of Transmittal or Depositary Shares to reach the Exchange Agent before the Expiration Date or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected if the Exchange Agent has received at its office prior to the Expiration Date a Notice of Guaranteed Delivery from an Eligible Institution setting forth the name and address of the tendering Holder, the name(s) in which the Depositary Shares are registered and, if the Depositary Shares are held in certificated form, the certificate numbers of the Depositary Shares to be tendered, and stating that the tender is being made thereby and guaranteeing that within three NYSE trading days after the date of execution of such Notice of Guaranteed Delivery by the Eligible Institution, the Depositary Shares in proper form for transfer together with a properly and duly executed Letter of Transmittal (and any other required documents), or a confirmation of book-entry transfer of such Depositary Shares into the Exchange Agent's account at a Depository with a Letter of Transmittal (and any other required documents) or, in the case of DTC, an Agent's Message, will be delivered by such Eligible Institution. Unless the Depositary Shares being tendered by the above-described method are deposited with the Exchange Agent within the time period set forth above (accompanied or preceded by a properly completed Letter of Transmittal and any other required documents) or a confirmation of book-entry transfer of such Depositary Shares into the Exchange Agent's account at a Depository, in accordance with such Depository's procedures (accompanied or preceded by a properly completed Letter of Transmittal and any other required documents) or, in the case of DTC, in accordance with DTC's ATOP procedures (along with a Letter of Transmittal or an Agent's Message), is received, PECO Energy may, at its option, reject the tender. In addition to the copy being transmitted herewith, copies of a Notice of Guaranteed Delivery which may be used by Eligible Institutions for the purposes described in this paragraph are available from the Exchange Agent and the Information Agent. Miscellaneous. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tender of Depositary Shares will be determined by PECO Energy, whose determination will be final and binding. PECO Energy reserves the absolute right to reject any or all tenders not in proper form or the acceptance for exchange of which may, in the opinion of PECO Energy's counsel, be unlawful. PECO Energy also reserves the absolute right to waive any defect or irregularity in the tender of any Depositary Shares, and PECO Energy's interpretation of the terms and conditions of the Offer (including the instructions in the Letter of Transmittal) will be final and binding. None of PECO Energy, the Exchange Agent, the Dealer Manager, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Tenders of Depositary Shares involving any irregularities will not be deemed to have been made until such irregularities have been cured or waived. Depositary Shares received by the Exchange Agent that are not validly tendered and as to which the irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering Holder (or in the case of Depositary Shares tendered by book-entry transfer into the Exchange Agent's account at DTC or such other Depository, such Depositary Shares will be credited to an account maintained at DTC or such other Depository designated by the participant therein who so delivered such Depositary Shares), unless otherwise requested by the Holder in the Letter of Transmittal, as promptly as practicable after the Expiration Date or the withdrawal or termination of the Offer. 20 26 LETTER OF TRANSMITTAL The Letter of Transmittal contains, among other things, the following terms and conditions, which are part of the Offer. The party tendering Depositary Shares for exchange (the "Transferor") sells, assigns and transfers the Depositary Shares to PECO Energy, and irrevocably constitutes and appoints the Exchange Agent as the Transferor's agent and attorney-in-fact to cause the Depositary Shares to be assigned, transferred and exchanged. The Letter of Transmittal directs the Exchange Agent to deliver the Series B Subordinated Debentures received upon exchange of the Depositary Shares to PECO Energy Capital. The Transferor represents and warrants that it has full power and authority to tender, exchange, assign and transfer the Depositary Shares and to acquire Preferred Trust Receipts issuable upon the exchange of such tendered Depositary Shares and that, when such Transferor's Depositary Shares are accepted for exchange, PECO Energy will acquire good and unencumbered title to such shares of tendered Depositary Shares, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim. The Transferor also warrants that it will, upon request, execute and deliver any additional documents deemed by PECO Energy to be necessary or desirable to complete the exchange, assignment and transfer of tendered Depositary Shares or transfer ownership of such Depositary Shares. All authority conferred by the Transferor will survive the death, bankruptcy or incapacity of the Transferor and every obligation of the Transferor shall be binding upon the heirs, legal representatives, successors, assigns, executors and administrators of such Transferor. WITHDRAWAL OF TENDERS Tenders of Depositary Shares pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless accepted for exchange by PECO Energy, may be withdrawn at any time after 40 Business Days from , 1995. To be effective, a written notice of withdrawal delivered by mail, hand delivery or facsimile transmission must be timely received by the Exchange Agent at the address set forth below under "-- Exchange Agent and Information Agent." The method of notification is at the risk and election of the Holder. Any such notice of withdrawal must specify (i) the Holder named in the Letter of Transmittal as having tendered Depositary Shares to be withdrawn, (ii) if the Depositary Shares are held in certificated form, the certificate numbers of the Depositary Shares to be withdrawn, (iii) that such Holder is withdrawing his election to have such Depositary Shares exchanged and (iv) the name of the registered Holder of such Depositary Shares. Any notice of withdrawal must be signed by the Holder in the same manner as the original signature on the Letter of Transmittal (including any required signature guarantees) or be accompanied by evidence satisfactory to PECO Energy that the person withdrawing the tender has succeeded to the beneficial ownership of the Depositary Shares being withdrawn. The Exchange Agent will return the properly withdrawn Depositary Shares promptly following receipt of notice of withdrawal. If Depositary Shares have been tendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must specify the name and number of the account at DTC or other Depository to be credited with the withdrawn Depositary Shares and otherwise comply with DTC's or such other Depository's procedures. All questions as to the validity of notice of withdrawal, including time of receipt, will be determined by PECO Energy, and such determination will be final and binding on all parties. Withdrawals of tenders of Depositary Shares may not be rescinded and any Depositary Shares withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. Properly withdrawn Depositary Shares, however, may be retendered by following the procedures therefor described elsewhere herein at any time prior to the Expiration Date. See "-- Procedures for Tendering." ACCEPTANCE OF DEPOSITARY SHARES AND PRORATION Upon the terms and subject to the conditions of the Offer, if 5,400,000 Depositary Shares (or, if decreased as described herein, such lesser number as PECO Energy may elect to exchange pursuant to the Offer) have been validly tendered and not withdrawn prior to the Expiration Date, PECO Energy will accept for exchange all such Depositary Shares. Upon the terms and subject to the conditions of the Offer, if more than 5,400,000 Depositary Shares (or, if decreased as described herein, such lesser number) have been validly 21 27 tendered and not withdrawn prior to the Expiration Date, PECO Energy will accept for exchange Depositary Shares from each Holder on a pro rata basis, subject to adjustment to avoid the acceptance for exchange of fractional shares. If PECO Energy decreases the amount of Depositary Shares sought, changes the consideration offered therefor or changes the fee offered to the Soliciting Dealers, and the Offer is scheduled to expire less than ten Business Days from and including the date that notice of such decrease is first published, sent or given in the manner specified above in "-- Expiration Date; Extensions; Amendments; Termination," then the Offer will be extended for ten Business Days from and including the date of such notice. All Depositary Shares not accepted pursuant to the Offer, including Depositary Shares not purchased because of proration, will be returned to the tendering Holders at PECO Energy's expense as promptly as practicable following the Expiration Date. EXCHANGE AGENT AND INFORMATION AGENT First Chicago Trust Company of New York has been appointed as the Exchange Agent for the Offer. THE EXCHANGE AGENT: FIRST CHICAGO TRUST COMPANY OF NEW YORK By Hand or Overnight Courier in New York: First Chicago Trust Company of New York 14 Wall Street Tenders and Exchanges 8th Floor -- Suite 4680-PECO New York, New York 10005 By Mail: (Registered or certified mail recommended) First Chicago Trust Company of New York Tenders and Exchanges Suite 4660-PECO P.O. Box 2559 Jersey City, New Jersey 07303-2559 By Facsimile Transmission (For Eligible Institutions Only): (201) 222-4720 or 4721 Confirm Receipt of Notice of Guaranteed Delivery by Telephone: (201) 222-4707 Georgeson & Company Inc. (the "Information Agent") has been retained by PECO Energy as the Information Agent to assist in connection with the Offer. Questions and requests for assistance regarding the Offer, requests for additional copies of this Offering Circular/Prospectus, the Letter of Transmittal and requests for Notice of Guaranteed Delivery may be directed to the Information Agent at Wall Street Plaza, New York, New York 10005. Banks and brokers call collect: (212) 440-9800; all others telephone (800) 223-2064. PECO Energy will pay the Exchange Agent and the Information Agent reasonable and customary fees for their services and will reimburse them for all their reasonable out-of-pocket expenses in connection therewith. 22 28 DEALER MANAGER; SOLICITING DEALERS Merrill Lynch & Co., as Dealer Manager, has agreed to solicit exchanges of Depositary Shares for Preferred Trust Receipts. PECO Energy will pay the Dealer Manager a fee of $ per Depositary Share tendered and not withdrawn (up to 5,400,000 Depositary Shares) pursuant to the Offer. The maximum fee payable to the Dealer Manager is approximately $ plus such amount, if any, that Merrill Lynch & Co. may be entitled to pursuant to the next paragraph. PECO Energy will also reimburse the Dealer Manager for certain reasonable out-of-pocket expenses in connection with the Offer and will indemnify the Dealer Manager against certain liabilities, including liabilities under the Securities Act of 1933, as amended ("Securities Act"). Merrill Lynch & Co. engages in transactions with, and from time to time has performed services for, PECO Energy, including acting as an underwriter for the issuance of the Depositary Shares. PECO Energy will pay to a Soliciting Dealer a solicitation fee of $ per Depositary Share validly tendered and accepted for exchange pursuant to the Offer. As used in this Offering Circular/Prospectus, "Soliciting Dealer" includes (i) any broker or dealer in securities, including the Dealer Manager in its capacity as a broker or dealer, who is a member of any national securities exchange or of the National Association of Securities Dealers, Inc. (the "NASD"), (ii) any foreign broker or dealer not eligible for membership in the NASD who agrees to conform to the NASD's Rules of Fair Practice in soliciting tenders outside the United States to the same extent as though it were an NASD member, or (iii) any bank or trust company, any one of whom has solicited and obtained a tender pursuant to the Offer. No such fee shall be payable to a Soliciting Dealer in respect of Depositary Shares registered in the name of such Soliciting Dealer unless such Depositary Shares are held by such Soliciting Dealer as nominee and such shares are being tendered for the benefit of one or more beneficial owners identified on the Letter of Transmittal or on the Notice of Solicited Tenders (included in the materials provided to brokers and dealers). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Depositary Shares by a holder unless the Letter of Transmittal accompanying such tender designates such Soliciting Dealer as such in the box captioned "Solicited Tenders" or the Notice of Solicited Tenders accompanying such tender designates such Soliciting Dealer. No such fee shall be payable to the Soliciting Dealer with respect to the tender of Depositary Shares by the holder of record, for the benefit of the beneficial owner, unless the beneficial owner has designated such Soliciting Dealer. No such fee shall be payable to the Soliciting Dealer unless the Soliciting Dealer returns a Notice of Solicited Tenders to the Exchange Agent within five business days after the Expiration Date. No such fee shall be payable to a Soliciting Dealer if such Soliciting Dealer is required for any reason to transfer the amount of such fee to a depositing holder. No broker, dealer, bank, trust company or fiduciary shall be deemed to be the agent of PECO Energy, PECO Energy Capital, the Exchange Agent, the Information Agent or the Dealer Manager for purposes of the Offer. Soliciting Dealers are not entitled to a solicitation fee for Depositary Shares beneficially owned by such Soliciting Dealer. The maximum fee payable to Soliciting Dealers is $ , exclusive of the amount that Merrill Lynch & Co. is entitled to pursuant to the preceding paragraph. Additional solicitation may be made by telephone or in person by officers and regular employees of PECO Energy and its affiliates. No additional compensation will be paid to any such officers and employees who engage in soliciting tenders. LISTING AND TRADING OF PREFERRED TRUST RECEIPTS AND DEPOSITARY SHARES The Preferred Trust Receipts constitute a new issue of securities with no established trading market. Application has been made for listing the Preferred Trust Receipts on the NYSE. Even if the Preferred Trust Receipts are approved for listing, there can be no assurance that an active market for the Preferred Trust Receipts will develop or be sustained in the future on such exchange. Although the Dealer Manager has indicated to PECO Energy that it intends to make a market in the Preferred Trust Receipts as permitted by applicable laws and regulations prior to the commencement of trading on the NYSE, it is not obligated to do so and may discontinue any such market-making at any time without notice. Accordingly, no assurance can be given as to the liquidity of, or trading markets for, the Preferred Trust Receipts. In order to satisfy the NYSE listing requirements, acceptance of Depositary Shares validly tendered in the Offer are subject to the condition 23 29 that as of the Exchange Date there be at least 400 record or beneficial holders of Preferred Trust Receipts to be issued in exchange for such Depositary Shares, which condition may not be waived. To the extent that Depositary Shares are tendered and accepted in the Offer, the terms on which untendered Depositary Shares could subsequently be sold could be adversely affected. In addition, if the Offer is substantially subscribed or oversubscribed, there would be a significant risk that round lot holdings of Depositary Shares outstanding following the Offer would be limited. See "Certain Investment Considerations -- Listing and Trading of Preferred Trust Receipts and Depositary Shares." TRANSACTIONS AND ARRANGEMENTS CONCERNING THE OFFER Except as described or referred to herein, there are no material contracts, arrangements, understandings or relationships in connection with the Offer between PECO Energy or any of its directors or executive officers, PECO Energy Capital or the General Partner and any person with respect to the Series B Subordinated Debentures, the Depositary Shares, the Series B Preferred Securities and the Preferred Trust Receipts. FEES AND EXPENSES; TRANSFER TAXES The expenses of soliciting tenders of the Depositary Shares will be borne by PECO Energy. For compensation to be paid to the Dealer Manager and Soliciting Dealers, see "The Offer -- Dealer Manager; Soliciting Dealers." The total cash expenditures to be incurred by PECO Energy in connection with the Offer, other than fees payable to the Dealer Manager and Soliciting Dealers, but including the expenses of the Dealer Manager, accounting and legal fees, and the fees and expenses of the Exchange Agent, the Information Agent, the Trustee, and Meridian Trust Company, as trustee under the Indenture (the "Indenture Trustee") are estimated to be approximately $ . PECO Energy will pay all transfer taxes, if any, applicable to the exchange of Depositary Shares pursuant to the Offer. If, however, Depositary Shares not tendered or accepted for exchange, are to be delivered to, or are to be issued in the name of, any person other than the registered Holder of the Depositary Shares tendered or if a transfer tax is imposed for any reason other than the exchange of Depositary Shares pursuant to the Offer, then the amount of any such transfer taxes (whether imposed on the registered Holder or any other persons) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering Holder. PRICE RANGE OF DEPOSITARY SHARES The Depositary Shares are listed and principally traded on the NYSE. The following table sets forth, for each period shown, the high and low sales prices of the Depositary Shares as reported on the NYSE Composite Tape.
HIGH LOW --- --- Fiscal Year Ended December 31, 1993 1st Quarter............................................................ 27 1/8 25 2nd Quarter............................................................ 26 1/2 25 1/2 3rd Quarter............................................................ 27 1/8 26 4th Quarter............................................................ 27 25 3/8 Fiscal Year Ended December 31, 1994 1st Quarter............................................................ 26 3/8 24 1/2 2nd Quarter............................................................ 25 1/4 23 7/8 3rd Quarter............................................................ 25 1/8 23 3/8 4th Quarter............................................................ 24 1/4 21 5/8
24 30
HIGH LOW --- --- Fiscal Year Ended December 31, 1995 1st Quarter............................................................ 25 22 3/8 2nd Quarter............................................................ 3rd Quarter (through ).......................................
On July 3, 1995 the last day of trading prior to the first public announcement of the Offer, the closing sales price of the Depositary Shares on the NYSE as reported on the Composite Tape was $25 1/8 per share. Holders of Depositary Shares are urged to obtain a current market quotation for the Depositary Shares. DESCRIPTION OF THE PREFERRED TRUST RECEIPTS The Preferred Trust Receipts will be issued by the Trust pursuant to the Trust Agreement. Each Preferred Trust Receipt represents a Series B Preferred Security. The Preferred Trust Receipts will be issued in denominations of $25 and integral multiples thereof and will be issued directly to the holders thereof or in book-entry form through DTC or such other Depository at which the Exchange Agent may have established an account. The Trust is a grantor trust created under the Delaware Business Trust Act. The Trustee will hold the Series B Preferred Securities deposited in the Trust for the benefit of the holders of the Preferred Trust Receipts. The holders of the Preferred Trust Receipts will have no right to withdraw Preferred Securities from the Trust. DISTRIBUTIONS Whenever the Trust shall receive any cash distribution representing a monthly distribution on the Series B Preferred Securities (whether or not distributed by PECO Energy Capital on the regular monthly distribution date therefor) or payment under the Series B Guarantee in respect thereof, the Trustee shall distribute such amounts to the holders of the Preferred Trust Receipts in proportion to the respective number of Series B Preferred Securities represented by such Preferred Trust Receipts. The paying agent for the Preferred Trust Receipts will be First Chicago Trust Company of New York. REDEMPTION OF PREFERRED TRUST RECEIPTS Whenever PECO Energy Capital shall elect or is required to redeem Series B Preferred Securities in accordance with the Amended and Restated Limited Partnership Agreement of PECO Energy Capital, dated as of July 25, 1994, as amended (the "Partnership Agreement"), PECO Energy Capital shall give the Trustee at least 35 days' prior notice thereof. The Trustee will mail the notice of redemption not less than 30 nor more than 60 days prior to the date fixed for redemption of the Series B Preferred Securities and the Preferred Trust Receipts to the holders of the Preferred Trust Receipts. On the date of redemption of the Series B Preferred Securities, provided that PECO Energy Capital (or PECO Energy pursuant to the Series B Guarantee) shall have deposited with the Trustee the aggregate amount payable upon redemption of all Series B Preferred Securities to be redeemed, the Trustee shall redeem Preferred Trust Receipts representing the same number of Series B Preferred Securities redeemed by PECO Energy Capital at the same redemption price at which such Series B Preferred Securities are redeemed. In the event that fewer than all the outstanding Preferred Trust Receipts are redeemed, the Preferred Trust Receipts to be redeemed shall be selected by lot or pro rata or other equitable method determined by the Trustee. Under the Trust Agreement, PECO Energy Capital agreed that if a partial redemption of the Series B Preferred Securities would result in a delisting of the Preferred Trust Receipts from any national exchange on which the Preferred Trust Receipts are then listed, PECO Energy Capital will only redeem the Series B Preferred Securities in whole. PAYMENTS ON LIQUIDATION OF PECO ENERGY CAPITAL Upon receipt by the Trust of any distribution from PECO Energy Capital upon liquidation of PECO Energy Capital (or payment by PECO Energy under the Series B Guarantee in respect thereof), after 25 31 satisfaction of creditors of the Trust as required by applicable law, the Trustee shall distribute to the holders of the Preferred Trust Receipts such amounts in proportion to the respective number of Series B Preferred Securities represented by such Preferred Trust Receipts. PAYMENTS ON PREFERRED TRUST RECEIPTS Monthly distributions on the Preferred Trust Receipts in certificated form will be payable by check to the holders of record on the record date therefor which will be the fifteenth day (whether or not a business day) of the month. Payments of the redemption price of the Preferred Trust Receipts in certificated form and distributions in liquidation will be made at the office of First Chicago Trust Company of New York, as paying agent, upon surrender of such Preferred Trust Receipts. Payments on Preferred Trust Receipts in global form will be made through the appropriate Depository. TRANSFERS AND EXCHANGES First Chicago Trust Company of New York will act as transfer agent and registrar for the Preferred Trust Receipts. Subject to the terms and conditions of the Trust Agreement, the transfer agent shall register the transfers on its books from time to time of Preferred Trust Receipts upon any surrender thereof by the holder in person or by a duly authorized attorney, properly endorsed or accompanied by a properly executed instrument of transfer or endorsement, together with evidence of the payment of any transfer taxes as may be required by law. Upon surrender of Preferred Trust Receipts at the office of the transfer agent, subject to the terms and conditions of the Trust Agreement, the transfer agent shall execute and deliver new Preferred Trust Receipts representing the same number of Series B Preferred Securities as the Preferred Trust Receipts surrendered. As a condition precedent to the registration of the transfer or exchange of any Preferred Trust Receipt, the transfer agent, may require (i) payment to it of a sum sufficient for the payment of any tax or other governmental charge with respect thereto; (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature; and (iii) compliance with such requirements as the Trustee may establish not inconsistent with the provisions of the Trust Agreement. No service charge shall be made to a holder of Preferred Trust Receipts for any registration of transfer or exchange of Preferred Trust Receipts, but the Trustee or the registrar shall require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Preferred Trust Receipts. The transfer agent shall not be required (i) to register the transfer of or exchange any Preferred Trust Receipts for a period beginning at the opening of business ten days next preceding any selection of Preferred Trust Receipts to be redeemed and ending at the close of business on the day of the mailing of a notice of redemption of Preferred Trust Receipts or (ii) to transfer or exchange for another Preferred Trust Receipt any Preferred Trust Receipt called or being called for redemption in whole or in part. VOTING RIGHTS If the holders of the Preferred Partner Interests (as defined in the Partnership Agreement), acting as a single class, are entitled to appoint and authorize a Special Representative pursuant to the Partnership Agreement, the Trustee shall notify the holders of the Preferred Trust Receipts of such right, request direction of each holder of a Preferred Trust Receipt as to the appointment of a Special Representative and vote the Series B Preferred Securities represented by such Preferred Trust Receipt in accordance with such direction. If the General Partner fails to convene a general meeting of PECO Energy Capital as required in the Partnership Agreement, the Trustee shall notify the holders of the Preferred Trust Receipts and, if so directed by the holders of the Preferred Trust Receipts representing Preferred Securities constituting at least 10% of the aggregate stated liquidation preference of the outstanding Preferred Partner Interests shall convene such meeting. Under the Trust Agreement, PECO Energy Capital has agreed that without the consent of the holders of 66 2/3% in liquidation amount of the Preferred Trust Receipts it may not consolidate, amalgamate, 26 32 merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any corporation or other entity if, as a result, the Preferred Trust Receipts would be delisted, downgraded or the holders thereof would recognize any gain or loss for federal income tax purposes. Upon receipt of notice of any meeting at which the holders of Series B Preferred Securities are entitled to vote, the Trustee shall, as soon as practicable thereafter, mail to the holders of Preferred Trust Receipts a notice, which shall be provided by the General Partner and which shall contain (i) such information as is contained in such notice of meeting, (ii) a statement that the holders of Preferred Trust Receipts will be entitled, subject to any applicable provision of law, to instruct the Trustee as to the exercise of the voting rights pertaining to the amount of Series B Preferred Securities represented by their respective Preferred Trust Receipts, and (iii) a brief statement as to the manner in which such instructions may be given. Upon the written request of a holder of a Preferred Trust Receipt, the Trustee shall vote or cause to be voted the number of Series B Preferred Securities represented by such Preferred Trust Receipts in accordance with the instructions set forth in such request. AMENDMENT AND TERMINATION OF TRUST AGREEMENT PECO Energy Capital or the General Partner may, and the Trustee shall, at any time and from time to time enter into one or more agreements supplemental to the Trust Agreement without the consent of the holders of the Preferred Trust Receipts: (i) to evidence the succession of another partnership, corporation or other entity to PECO Energy Capital or the General Partner and the assumption by any such successor of the covenants of PECO Energy Capital or the General Partner in the Trust Agreement; (ii) to add to the covenants of PECO Energy Capital or the General Partner for the benefit of the holders of the Preferred Trust Receipts, or to surrender any right or power herein conferred upon PECO Energy Capital or the General Partner; (iii) to correct or supplement any provision in the Trust Agreement which may be defective or inconsistent with any other provision therein or to make any other provisions with respect to matters or questions arising under the Trust Agreement, provided, that any such action shall not adversely affect the interests of the holders of Preferred Trust Receipts; or (iv) to cure any ambiguity or correct any mistake. The Trust Agreement shall terminate upon the redemption of the Preferred Trust Receipts or a final distribution in respect of the Series B Preferred Securities and such distribution has been delivered to the holders of the Preferred Trust Receipts. The Trust Agreement may be amended in writing by the Trustee, PECO Energy Capital and the General Partner so long as such amendment does not materially adversely affect the rights of the holders of the Preferred Trust Receipts. EXPENSES OF THE TRUSTEE All charges or expenses of the Trust, including the charges and expenses of the Trustee, will be paid by the General Partner. RESIGNATION AND REMOVAL OF TRUSTEE The Trust shall at all times have a Trustee which is a bank having a combined capital and surplus of $50,000,000. If the Trustee ceases to be eligible, it will resign. The Trustee may at any time resign as trustee under the Trust Agreement by notice of its election to do so delivered to PECO Energy Capital and the General Partner, such resignation to take effect upon the appointment of a successor trustee and its acceptance of such appointment as hereinafter provided. The Trustee may at any time be removed by PECO Energy Capital by notice of such removal delivered to the Trustee, such removal to take effect upon the appointment of a successor trustee and its acceptance of such appointment. In case at any time the Trustee shall resign or be removed, PECO Energy Capital shall, within 45 days after the delivery of the notice of resignation or removal, as the case may be, appoint a successor trustee, which shall be a bank or trust company, or an affiliate of a bank or trust company, having its principal office in the United States of America and having a combined capital and surplus of at least $50,000,000. 27 33 DESCRIPTION OF THE SERIES B PREFERRED SECURITIES The following is a summary of certain terms and provisions of the Series B Preferred Securities represented by the Preferred Trust Receipts and the Partnership Agreement. The summary is subject to, and qualified in its entirety by reference to, the Partnership Agreement and the Delaware Revised Uniform Limited Partnership Act. The Partnership Agreement is an exhibit to the Registration Statement of which this Offering Circular/Prospectus forms a part. GENERAL Under the Partnership Agreement, PECO Energy Capital is authorized to issue two classes of partner interests: the Preferred Securities representing limited partner interests, including the Series B Preferred Securities offered hereby, and general partner interests. All of the general partner interests of PECO Energy Capital are owned by the General Partner, which is a wholly owned subsidiary of PECO Energy. All of the Preferred Securities issued by PECO Energy Capital will be of equal rank in participation in the profits and assets and income of PECO Energy Capital. The Partnership Agreement authorizes the General Partner to establish series of Preferred Securities having such designations, rights, privileges, restrictions and other terms and provisions as the General Partner may determine. Distributions on all series of Preferred Securities must be paid in full before the General Partner may participate in the profits or assets of PECO Energy Capital. DISTRIBUTIONS The Series B Preferred Securities will be entitled to Distributions out of funds on hand legally available therefor held by PECO Energy Capital at the annual rate of % of the stated liquidation preference of $25, payable monthly in arrears on the last day of each calendar month. Distributions on the Series B Preferred Securities will be cumulative, will accrue from the Exchange Date and, except as otherwise described below, will be payable monthly in arrears, on the last day of each month of each year, commencing on . Distributions in arrears after the monthly payment date therefor will accumulate additional distributions thereon at the rate of % per annum. In addition, holders of Series B Preferred Securities will be entitled to receive, when, as and if declared by the General Partner out of funds on hand and legally available therefor an additional cash distribution at the rate of 7.96% per annum of the stated liquidation preference thereof from August 1, 1995 up to but not including the Exchange Date in lieu of dividends accumulating from August 1, 1995 on their Depositary Shares accepted for exchange, such additional distribution to be made at the time the first distribution on the Series B Preferred Securities is made (the "Additional Distribution"). The General Partner may make distributions on the general partner interests of PECO Energy Capital only after payment in full of all Distributions accrued on the Series B Preferred Securities and any other outstanding Preferred Securities of PECO Energy Capital. The Series B Preferred Securities will rank pari passu with all other series of Preferred Securities which may be issued by PECO Energy Capital. The Series A Preferred Securities are the only other series of Preferred Securities which have been issued by PECO Energy Capital to date. After payment of the Additional Distribution, PECO Energy has the right under the Indenture to extend the interest payment period from time to time on the Series B Subordinated Debentures to a period not exceeding 60 consecutive months; provided that such extended interest period shall not extend beyond the stated maturity date or redemption date of any Subordinated Debentures, including the Series B Subordinated Debentures. As a consequence, monthly Distributions on the Series B Preferred Securities would be deferred (but would continue to accumulate with Distributions thereon) by PECO Energy Capital during any such extended interest payment period. In the event that PECO Energy exercises its right to extend the interest payment period on the Subordinated Debentures, PECO Energy may not declare or pay dividends on, or redeem, purchase or acquire, any of its capital stock during the extension period. PECO Energy Capital and PECO Energy currently believe that the extension of an interest payment period is unlikely. Prior to the termination of any such extension period, PECO Energy may further extend the interest payment period, provided that such extension period together with all such previous and further extensions thereof may not 28 34 exceed 60 consecutive months. Upon the termination of any extension period and the payment of all amounts then due on the Subordinated Debentures, PECO Energy may elect to extend the interest payment period again, subject to the above requirements. See "Certain Investment Considerations" and "Description of the Series B Subordinated Debentures and the Indenture -- Option to Extend Interest Payment Period" and "-- Interest." Distributions on the Series B Preferred Securities must be paid by PECO Energy Capital in any calendar year or portion thereof to the extent that PECO Energy Capital has funds on hand legally available therefor. It is anticipated that the funds available for distribution by PECO Energy Capital will be limited to payments received by PECO Energy Capital in respect of the Series B Subordinated Debentures. See "Description of the Series B Subordinated Debentures and the Indenture." The amount of Distributions payable for any period will be computed on the basis of twelve 30-day months and a 360-day year and, for any period shorter than a full monthly distribution period, will be computed on the basis of the actual number of days elapsed in such period. Distributions on the Series B Preferred Securities will be made to the Holders thereof as they appear on the books and records of PECO Energy Capital on the relevant record dates, which will be the 15th day of each month. If any date on which Distributions are payable on the Series B Preferred Securities is not a business day, then payment of the Distributions payable on such date will 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) except that, if such business day is in the next succeeding calendar year, such payment shall be made on the immediately preceding business day, in each case with the same force and effect as if made on such date. The term "business day," as used in relation to the Series B Preferred Securities, shall mean any day other than a day on which banking institutions in the City of New York or the State of Delaware are authorized or required by law to close. CERTAIN RESTRICTIONS ON PECO ENERGY CAPITAL If distributions have not been paid in full on any series of Preferred Securities of PECO Energy Capital, PECO Energy Capital shall not: (i) pay any distributions on any other series of Preferred Securities, unless the amount of any distributions paid on any Preferred Securities is paid on all Preferred Securities then outstanding on a pro rata basis in proportion to the full distributions to which each series of Preferred Securities would be entitled if paid in full; (ii) pay any distribution on the general partner interests; or (iii) redeem, purchase or otherwise acquire any Preferred Securities or the general partner interests; until, in each case, such time as all accumulated and unpaid distributions on all series of Preferred Securities shall have been paid in full for all prior distribution periods. OPTIONAL REDEMPTION The Series B Preferred Securities are subject to redemption, at the option of the General Partner, in whole or in part, from time to time, on or after October 1, 1997, at $25 per Series B Preferred Security, plus accumulated and unpaid Distributions(whether or not declared), if any, to the date fixed for redemption (the "Redemption Price"). MANDATORY REDEMPTION If at any time PECO Energy redeems the Series B Subordinated Debentures or pays the Series B Subordinated Debentures at maturity, the Series B Preferred Securities will be subject to mandatory redemption at the Redemption Price. The Series B Preferred Securities will not be entitled to any sinking fund. 29 35 SPECIAL EVENT REDEMPTIONS If a Tax Event (as defined below) shall occur and be continuing, the Series B Preferred Securities will be subject to redemption, at the option of the General Partner, in whole or in part at the Redemption Price within 90 days following the occurrence of such Tax Event. "Tax Event" means that PECO Energy Capital shall have received an opinion of counsel (which may be regular counsel to PECO Energy or an affiliate but not an employee thereof) experienced in such matters to the effect that, 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 affecting taxation, or as a result of any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or such interpretation or pronouncement is announced on or after the date of issuance of the Series B Preferred Securities, there is more than an insubstantial risk that (i) PECO Energy Capital is subject to United States federal income tax with respect to interest received on the Series B Subordinated Debentures or PECO Energy Capital will otherwise not be taxed as a partnership, (ii) interest payable by PECO Energy on the Series B Subordinated Debentures will not be deductible for United States federal income tax purposes or (iii) PECO Energy Capital is subject to more than a de minimis amount of other taxes, duties or other governmental charges. If an Investment Company Act Event (as defined below) shall occur and be continuing, the Series B Preferred Securities will be subject to mandatory redemption in whole at the Redemption Price within 90 days following the occurrence of such Investment Company Act Event. "Investment Company Act Event" means the occurrence of a change in law or regulation or a change in official interpretation of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law") to the effect that PECO Energy Capital is or will be considered an "Investment Company" which is required to be registered under the Investment Company Act of 1940, as amended (the "1940 Act"), which Change in 1940 Act Law becomes effective on or after the date of the issuance of the Series B Preferred Securities; provided, that no Investment Company Act Event shall be deemed to have occurred if PECO Energy Capital has received an opinion of counsel (which may be regular counsel to PECO Energy or any affiliate but not an employee thereof) experienced in such matters, to the effect that PECO Energy Capital and/or PECO Energy has taken reasonable measures, in its discretion, to avoid such Change in 1940 Act Law so that notwithstanding such Change in 1940 Act Law, PECO Energy Capital is not required to be registered as an "Investment Company" within the meaning of the 1940 Act. REDEMPTION PROCEDURES PECO Energy Capital may not redeem any Series B Preferred Securities unless all accumulated and unpaid Distributions have been paid on all Series B Preferred Securities for all monthly distribution periods terminating on or prior to the date of redemption. If notice of redemption shall have been given and payment shall have been made by the Partnership to the Trust, then, upon the date of such payment all rights of beneficial owners of the Series B Preferred Securities so called for redemption will cease. In the event that any date fixed for redemption of Series B Preferred Securities is not a business day, then payment of the Redemption Price payable on such date will be made on the next succeeding day which is a business day (and without any interest or other payment in respect of any such delay), except that if such business day falls in the next succeeding calendar year, such payment will be made on the immediately preceding business day (in each case with the same force and effect as if made on such day). LIQUIDATION DISTRIBUTION In the event of any voluntary or involuntary dissolution and winding up of PECO Energy Capital, the holders of the Preferred Securities will be entitled to receive out of the assets of PECO Energy Capital after satisfaction of liabilities to creditors as required by Delaware law and before any distribution of assets is made to holders of its general partner interests, the sum of their stated liquidation preference and all accumulated and unpaid Distributions to the date of payment for such series of Preferred Securities (collectively, the 30 36 "Partnership Liquidation Distribution"). All assets of PECO Energy Capital remaining after payment of the Partnership Liquidation Distribution will be distributed to the General Partner. If, upon such liquidation, the Partnership Liquidation Distribution can be paid only in part because PECO Energy Capital has insufficient assets available to pay in full the aggregate Partnership Liquidation Distribution on all Preferred Securities, then the amounts payable on each series of Preferred Securities shall be paid on a pro rata basis, in proportion to the full Partnership Liquidation Distribution to which each series of Preferred Securities would be entitled. Pursuant to the Partnership Agreement, PECO Energy Capital shall be dissolved and its affairs shall be wound up upon the occurrence of any of the following events: (i) upon the expiration of the term of PECO Energy Capital, which is 99 years, (ii) upon the withdrawal, removal or bankruptcy of the General Partner or the occurrence of any other event that under applicable law causes PECO Energy Capital Corp. to cease to be the General Partner, except for a transfer to a permitted successor of the General Partner as set forth in the Partnership Agreement, (iii) the entry of a decree of judicial dissolution, or (iv) the written consent of the General Partner and all of the holders of the Preferred Securities. Upon such dissolution, PECO Energy is required to redeem the Subordinated Debentures to fund the Partnership Liquidation Distribution. The amount per share payable on the Series B Preferred Securities in the event of any voluntary or involuntary liquidation of PECO Energy Capital is $25 plus accumulated and unpaid Distributions. MERGER, CONSOLIDATION, ETC. OF PECO ENERGY CAPITAL PECO Energy Capital may not 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 corporation or other entity, except with the approval of the General Partner and the holders of 66 2/3% in aggregate stated liquidation preference of the outstanding Preferred Securities or as otherwise described below. The General Partner may, without the consent of the holders of the Preferred Securities, cause PECO Energy Capital to consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to, a corporation, a limited liability company or a limited partnership, a trust or other entity organized as such under the laws of any state of the United States of America or the District of Columbia, provided that (i) such successor entity either (x) expressly assumes all of the obligations of PECO Energy Capital under the Preferred Securities or (y) 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, as regards participation in the profits and assets of the successor entity, at least as high as the Preferred Securities rank, as regards participation in the profits and assets of PECO Energy Capital, (ii) PECO Energy confirms its obligations under the Guarantee with regard to the Successor Securities, if any, (iii) such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease does not cause any series of Preferred Securities or Successor Securities to be delisted by any national securities exchange on which such series of Preferred Securities is then listed, (iv) such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease does not cause the Preferred Securities or Successor Securities to be downgraded by any "nationally recognized statistical rating organization," as that term is defined by the SEC for purposes of Rule 436(g)(2) under the Securities Act, (v) such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease does not adversely affect the powers, preferences and other special rights of holders of Preferred Securities or Successor Securities in any material respect, (vi) such successor entity has a purpose substantially identical to that of PECO Energy Capital, (vii) prior to such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease, PECO Energy has received an opinion of counsel (which may be regular tax or other counsel to PECO Energy or an affiliate, but not an employee thereof) experienced in such matters to the effect that (w) holders of outstanding Preferred Securities will not recognize any gain or loss for United States federal income tax purposes as a result of the consolidation, amalgamation, merger, replacement, conveyance, transfer or lease, (x) such successor entity will be treated as a partnership for United States federal income tax purposes, (y) following such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease, PECO Energy and such successor entity will be in compliance with the 1940 Act without registering thereunder as an investment company, and (z) such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease will not adversely affect the limited liability of holders of Preferred Securities or Successor Securities. 31 37 VOTING RIGHTS Except as provided above and under "-- Merger, Consolidation, etc. of PECO Energy Capital" and "Description of the Series B Guarantee -- Amendments" and as otherwise required by law and the Partnership Agreement, the holders of the Preferred Securities will have no voting rights. If (i) PECO Energy Capital fails to pay Distributions in full on the Preferred Securities for 18 consecutive monthly distribution periods, (ii) an Event of Default (as defined in the Indenture) occurs and is continuing, or (iii) PECO Energy is in default on any of its payment obligations under the Guarantees, then the holders of the Preferred Securities, acting as a single class, will be entitled by a vote of the majority of the aggregate stated liquidation preference of the outstanding Preferred Securities to appoint a special representative (the "Special Representative") to enforce PECO Energy Capital's rights against PECO Energy under the Subordinated Debentures and the Indenture and the obligations undertaken by PECO Energy under the Guarantees, including, after failure to pay Distributions for 60 consecutive monthly distribution periods on the Preferred Securities, the payment of Distributions on the Preferred Securities. The Special Representative shall not be admitted as a partner of PECO Energy Capital or otherwise be deemed a partner of PECO Energy Capital and shall have no liability for the debts, obligations or liabilities of PECO Energy Capital. For purposes of determining whether PECO Energy Capital has failed to pay Distributions in full for 18 consecutive monthly distribution periods, Distributions shall be deemed to remain in arrears, notwithstanding any payments in respect thereof, until full cumulative Distributions on all Preferred Securities have been or contemporaneously are paid with respect to all monthly distribution periods terminating on or prior to the date of payment of such full cumulative Distributions. Subject to the requirements of applicable law, not later than 30 days after such right to appoint the Special Representative, the General Partner will convene a general meeting for the above purpose. If the General Partner fails to convene such meeting within such 30-day period, the holders of 10% of the aggregate stated liquidation preference of the Preferred Securities will be entitled to convene such meeting. The provisions of the Partnership Agreement relating to the convening and conduct of the general meetings of security holders will apply with respect to any such meeting. Any Special Representative so appointed shall vacate office immediately if PECO Energy Capital (or PECO Energy pursuant to the Guarantee) shall have paid in full all accumulated and unpaid Distributions on the Preferred Securities or such default or breach, as the case may be, shall have been cured. Notwithstanding the appointment of any such Special Representative, PECO Energy retains all rights under the Indenture, including the right to extend the interest payment period on the Subordinated Debentures. If any proposed amendment to the Partnership Agreement provides for, or the General Partner otherwise proposes to effect, any action which would materially adversely affect the powers, preferences or special rights attached to any series of Preferred Securities, whether by way of amendment to the Partnership Agreement or otherwise, then the holders of such series of Preferred Securities will be entitled to vote on such amendment or action of the General Partner (but not on any other amendment or action) and, in the case of an amendment or action which would equally adversely affect the rights or preferences of any other Preferred Securities, such Preferred Securities shall vote together as a class on such amendment or action of the General Partner (but not on any other amendment or action), and such amendment or action shall not be effective except with the approval of the holders of not less than 66 2/3% of the aggregate stated liquidation preference of such series of Preferred Securities. Except in certain circumstances described under "-- Liquidation Distribution," PECO Energy Capital will be dissolved and wound up only with the consent of the holders of all Preferred Securities then outstanding as well as the General Partner. The powers, preferences or special rights attached to any Preferred Securities will be deemed not to be adversely affected by the creation or issue of, and no vote will be required for the creation or issue of, any additional series of Preferred Securities or additional general partner interests. Holders of Preferred Securities have no preemptive rights. So long as any Subordinated Debentures are held by PECO Energy Capital, the General Partner, unless so directed by the Special Representative, shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the holder of the Subordinated Debentures or the Indenture Trustee under the Indenture, or executing any trust or power conferred on the Indenture Trustee, (ii) waive any past 32 38 default which is available under the Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Subordinated Debentures shall be due and payable or (iv) consent to any amendment, modification or termination of the Indenture, where such consent shall be required, without, in each case, obtaining the prior approval of the holders of at least 66 2/3% in aggregate stated liquidation preference of all series of Preferred Securities affected thereby, acting as a single class; provided, however, that where a consent under the Indenture would require the consent of each holder affected thereby, no such consent shall be given by the General Partner without the prior consent of each holder of all series of Preferred Securities affected thereby. The General Partner shall not revoke any action previously authorized or approved by a vote of any series of Preferred Securities. The General Partner shall notify all holders of the Preferred Securities of any notice of default received from the Indenture Trustee with respect to the Subordinated Debentures. Any required approval of holders of Preferred Securities may be given at a separate meeting of such holders convened for such purposes, at a meeting of all partners of PECO Energy Capital or pursuant to written consent. PECO Energy Capital will cause a notice of any meeting at which holders of any series of Preferred Securities are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be mailed to each holder of record of such series of Preferred Securities. Each such notice will include a statement setting forth (i) the date of such meeting or the date by which such action is to be taken, (ii) a description of any resolution proposed for adoption at such meeting on which such holders are entitled to vote or of such matter upon which written consent is sought and (iii) instructions for the delivery of proxies or consents. The holders of the Preferred Securities will have no rights to remove or replace the General Partner. MISCELLANEOUS The General Partner is authorized and directed to use its best efforts to manage the affairs of PECO Energy Capital in such a way that PECO Energy Capital would not be deemed to be an "investment company" required to be registered under the 1940 Act or taxed as a corporation for United States federal income tax purposes and so that the Subordinated Debentures will be treated as indebtedness of PECO Energy for federal income tax purposes. In this connection, the General Partner is authorized to take any action not inconsistent with applicable law, the Certificate of Limited Partnership of PECO Energy Capital or the Partnership Agreement, and that does not materially adversely affect the interests of holders of Preferred Securities, that the General Partner determines in its discretion to be necessary or desirable for such purposes. PECO Energy Capital may not borrow money or issue debt or mortgage or pledge any of its assets. DESCRIPTION OF THE SERIES B GUARANTEE The following is a summary of certain provisions of the Series B Guarantee which will be executed and delivered by PECO Energy concurrently with the issuance of the Series B Preferred Securities. The summary is subject to, and qualified by reference to the Payment and Guarantee Agreement, which is filed as an exhibit to the Registration Statement of which this Offering Circular/Prospectus forms a part. GENERAL Under the Series B Guarantee, PECO Energy will agree to pay (i) any accumulated and unpaid Distributions on the Series B Preferred Securities to the extent that PECO Energy Capital has funds on hand legally available therefor, (ii) the redemption price payable with respect to any Series B Preferred Securities called for redemption by PECO Energy Capital to the extent that PECO Energy Capital has funds on hand legally available therefor, (iii) upon a liquidation of PECO Energy Capital, the lesser of (a) the portion of the Partnership Liquidation Distribution applicable to the Series B Preferred Securities and (b) the amount of assets of PECO Energy Capital legally available for distribution to holders of Series B Preferred Securities in liquidation of PECO Energy Capital (collectively, the "Guarantee Payments"). PECO Energy will agree to pay the Guarantee Payments, as and when due, (except to the extent paid by PECO Energy Capital), to the fullest extent permitted by law, regardless of any defense, right of set-off or counterclaim which PECO Energy 33 39 may have or assert against PECO Energy Capital, the General Partner, the Trust or the Trustee. PECO Energy's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by PECO Energy to the holders of Series B Preferred Securities or by causing PECO Energy Capital to pay such amounts to such holders. In addition, the Indenture provides that PECO Energy shall cause the General Partner to remain the general partner of PECO Energy Capital and timely perform all its duties as such (including the duty to pay Distributions on the Preferred Securities), which include, among other things, the General Partner's duties under the Partnership Agreement to directly pay all costs and expenses of PECO Energy Capital (thereby insuring that the amount of PECO Energy's payments on its Subordinated Debentures will be sufficient to allow payment in full to the holders of the Preferred Securities) and the covenant of the General Partner in the Partnership Agreement to at all times maintain a "fair market value net worth" of at least 10% of the total contributions (less redemptions) to PECO Energy Capital. While the assets of the General Partner will not be available for making Distributions on the Preferred Securities, they will be available for payment of the expenses of PECO Energy Capital. Accordingly, the Series B Guarantee and the Indenture, together with the related covenants contained in the Partnership Agreement and PECO Energy's obligations under the Subordinated Debentures, provide for PECO Energy's full and unconditional guarantee of the Preferred Securities as set forth above. STATUS OF THE SERIES B GUARANTEE The Series B Guarantee will constitute an unsecured obligation of PECO Energy and will rank subordinate and junior in right of payment to all general liabilities of PECO Energy. The Series B Guarantee will constitute a guarantee of payment and not of collection. The Series B Guarantee will be held by the General Partner for the benefit of the holders of the Series B Preferred Securities. In the event of the appointment of a Special Representative, the Special Representative may enforce the Series B Guarantee. If no Special Representative has been appointed to enforce the Series B Guarantee, the General Partner has the right to enforce the Series B Guarantee on behalf of the holders of the Series B Preferred Securities. The holders of Preferred Trust Receipts representing not less than 10% in aggregate stated liquidation preference of the Series B Preferred Securities have the right to direct the time, method and place of conducting any proceeding to enforce any remedy available in respect of the Series B Guarantee, including the giving of directions to the General Partner or the Special Representative, as the case may be. If the General Partner or the Special Representative fails to enforce the Series B Guarantee as above provided, any holder of Preferred Trust Receipts representing Series B Preferred Securities may institute a legal proceeding directly against PECO Energy to enforce its rights under the Series B Guarantee without first instituting a legal proceeding against PECO Energy Capital or any other person or entity. The Series B Guarantee will not be discharged except by payment of the Guarantee Payments in full to the extent not paid by PECO Energy Capital and by complete performance of all obligations of PECO Energy contained in the Series B Guarantee. CERTAIN COVENANTS OF PECO ENERGY Under the Series B Guarantee, PECO Energy will covenant that, so long as any Series B Preferred Securities remain outstanding, neither PECO Energy nor any majority-owned subsidiary of PECO Energy shall declare or pay any dividend on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock (other than dividends by a wholly owned subsidiary) if at such time PECO Energy shall be in default with respect to its payment obligations under the Series B Guarantee or there shall have occurred any event that, with the giving of notice or the lapse of time or both, would constitute an Event of Default under the Indenture. AMENDMENTS Except with respect to any changes which do not materially adversely affect the rights of holders of Series B Preferred Securities (in which case no vote will be required), the Series B Guarantee may be amended only with the prior approval of the holders of Preferred Trust Receipts representing not less than 66 2/3% of the aggregate stated liquidation preference of the outstanding Series B Preferred Securities. 34 40 MERGER OF PECO ENERGY So long as the Series B Preferred Securities remain outstanding, PECO Energy will maintain its corporate existence; provided that PECO Energy may consolidate with or merge with or into any other person or sell, convey, transfer or lease all or substantially all its properties and assets to any person if the successor person shall be organized and existing under the laws of the United States or any state thereof or the District of Columbia and shall expressly assume the obligations of PECO Energy under the Series B Guarantee. TERMINATION OF THE SERIES B GUARANTEE The Series B Guarantee will terminate and be of no further force and effect upon full payment of the redemption price of all Series B Preferred Securities or upon full payment of the amounts payable with respect to the Series B Preferred Securities upon liquidation of PECO Energy Capital. The Series B Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of Series B Preferred Securities must restore payments of any sums paid under the Series B Preferred Securities or the Series B Guarantee. DESCRIPTION OF THE SERIES B SUBORDINATED DEBENTURES AND THE INDENTURE The following is a summary of certain terms and provisions of the Series B Subordinated Debentures and the Indenture. The summary is subject to, and is qualified by reference to the Indenture, which is filed as an exhibit to the Registration Statement of which this Offering Circular/Prospectus forms a part. GENERAL The Series B Subordinated Debentures will be unsecured subordinated obligations of PECO Energy issued under the Indenture. The Series B Subordinated Debentures will be in a principal amount equal to the aggregate stated liquidation preference of the Series B Preferred Securities plus the General Partner's concurrent investment in PECO Energy Capital, will bear interest at a rate equal to the Distribution rate on the Series B Preferred Securities payable on the Distribution dates, will have maturity and redemption provisions corresponding to the redemption provisions of the Series B Preferred Securities and will be subject to mandatory redemption upon the dissolution and winding up of PECO Energy Capital. The entire principal amount of the Series B Subordinated Debentures will become due and payable, together with any accrued and unpaid interest thereon, on , 2025. PECO Energy will deliver the Series B Subordinated Debentures to the Exchange Agent (which will receive the Series B Subordinated Debentures on behalf of the Holders of the Depositary Shares) in exchange for the Depositary Shares. The Series B Subordinated Debentures will be delivered by the Exchange Agent to PECO Energy Capital in consideration for the issuance and deposit by PECO Energy Capital of the Series B Preferred Securities with the Trustee under the Trust Agreement. PECO Energy Capital will purchase additional Series B Subordinated Debentures issued by PECO Energy in an amount equal to the contribution made by the General Partner to PECO Energy Capital concurrently with the Exchange. REDEMPTION Except as provided below, the Series B Subordinated Debentures may not be redeemed prior to October 1, 1997. PECO Energy shall have the right to redeem the Series B Subordinated Debentures, in whole or in part, from time to time, on or after October 1, 1997, upon not less than 30 nor more than 60 days' notice, at a redemption price equal to 100% of the aggregate principal amount to be redeemed, plus any accrued and unpaid interest, to the redemption date, including interest accrued during an Extension Period. PECO Energy will also have the right to redeem the Series B Subordinated Debentures at any time upon the occurrence of a Tax Event if certain conditions are met as described under "Description of the Series B Preferred Securities -- Special Event Redemption." The Series B Subordinated Debentures will be subject to mandatory redemption in the event of an Investment Company Act Event, upon the dissolution of PECO Energy Capital or upon redemption of the Series B Preferred Securities. 35 41 If PECO Energy gives a notice of redemption in respect of Series B Subordinated Debentures, then, on or prior to the redemption date, PECO Energy shall deposit with the paying agent funds sufficient to pay the applicable redemption price and will give irrevocable instructions and authority to pay such redemption price. If notice of redemption shall have been given, if required, then the Series B Subordinated Debentures called for redemption shall become due and payable on the redemption date and upon the redemption date, interest will cease to accrue on the Series B Subordinated Debentures called for redemption and such Series B Subordinated Debentures will no longer be deemed to be outstanding. INTEREST The Series B Subordinated Debentures will bear interest at an annual rate of % from the Exchange Date. Interest will be payable monthly in arrears on the last day of each month of each year, commencing on , 1995, to PECO Energy Capital. In addition, PECO Energy is obligated under the Series B Subordinated Debentures to pay on the first interest payment date an amount sufficient to pay the Additional Distribution. PECO Energy will make additional interest payments on any overdue installment of interest on the Series B Subordinated Debentures to PECO Energy Capital at the same rate per annum as the annual rate payable on the Series B Subordinated Debentures. OPTION TO EXTEND INTEREST PAYMENT PERIOD Under the Indenture, PECO Energy shall have the right at any time after payment of the Additional Distribution, so long as an Event of Default under the Indenture has not occurred and is continuing, to extend the interest payment period for all Subordinated Debentures for up to 60 consecutive months; provided that no Extension Period shall extend beyond the stated maturity date or date of redemption of any series of Subordinated Debentures. At the end of the Extension Period, PECO Energy shall pay all interest then accrued and unpaid (together with interest thereon to the extent permitted by applicable law at the rate per annum borne by such Subordinated Debentures). During any such Extension Period, neither PECO Energy nor any majority-owned subsidiary of PECO Energy shall declare or pay any dividend on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock (other than dividends by wholly owned subsidiaries). Prior to the termination of any such Extension Period, PECO Energy may shorten or further extend the interest payment period, provided that such Extension Period, together with all such further extensions thereof, may not exceed 60 consecutive months. Upon the termination of any Extension Period and the payment of all amounts then due, PECO Energy may select a new Extension Period subject to the above requirements. PECO Energy shall give the Indenture Trustee notice of its selection of such extended or shortened interest payment period one business day prior to the earlier of (i) the date PECO Energy has selected to make the interest payment or (ii) the date PECO Energy Capital is required to give notice to the NYSE or other applicable self-regulatory organization of the record date or the date such Distributions are payable, but in any event not less than two business days prior to such record date. PECO Energy shall cause the Indenture Trustee to give such notice of PECO Energy's selection of such extended interest payment period to the holders of the Preferred Securities. SUBORDINATION The Indenture provides that all payments by PECO Energy in respect of the Subordinated Debentures, including the Series B Subordinated Debentures, shall be subordinated to the prior payment in full of all amounts payable on Senior Indebtedness. The term "Senior Indebtedness" means (i) the principal of and premium, if any, in respect of (A) indebtedness of PECO Energy for money borrowed and (B) indebtedness evidenced by securities, debentures, bonds or other similar instruments issued by PECO Energy; (ii) all capital lease obligations of PECO Energy; (iii) all obligations of PECO Energy issued or assumed as the deferred purchase price of property, all conditional sale obligations of PECO Energy and all obligations of PECO Energy under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business); (iv) certain obligations of PECO Energy for the reimbursement of any obligor on any letter of credit, banker's acceptance, security purchase facility or similar credit transaction; (v) all 36 42 obligations of the type referred to in clauses (i) through (iv) of other persons and all dividends of other persons (other than Preferred Securities) for the payment of which, in either case, PECO Energy is responsible or liable as obligor, guarantor or otherwise; and (vi) all obligations of the type referred to in clauses (i) through (v) of other persons secured by any lien on any property or asset of PECO Energy (whether or not such obligation is assumed by PECO Energy), except for any such indebtedness that is by its terms subordinated to or pari passu with the Subordinated Debentures or indebtedness between or among PECO Energy and its affiliates. Upon any payment or distribution of assets or securities of PECO Energy, upon any dissolution or winding up or total or partial liquidation or reorganization of PECO Energy, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or other proceedings, all amounts payable on Senior Indebtedness (including any interest accruing on such Senior Indebtedness subsequent to the commencement of a bankruptcy, insolvency or similar proceeding) shall first be paid in full before PECO Energy Capital (as holder of the Subordinated Debentures), the Indenture Trustee on behalf of such holder or any Special Representative appointed by the holders of the Preferred Securities shall be entitled to receive from PECO Energy any payment of principal of or interest on or any other amounts in respect of the Subordinated Debentures or distribution of any assets or securities. No direct or indirect payment by or on behalf of PECO Energy of principal of or interest on the Subordinated Debentures, whether pursuant to the terms of the Subordinated Debentures or upon acceleration or otherwise, shall be made if, at the time of such payment, there exists (i) a default in the payment of all or any portion of any Senior Indebtedness or (ii) any other default pursuant to which the maturity of Senior Indebtedness has been accelerated and, in either case, requisite notice has been received by the Indenture Trustee and such default shall not have been cured or waived by or on behalf of the holders of such Senior Indebtedness. If the Indenture Trustee, PECO Energy Capital (as holder of the Subordinated Debentures) or any Special Representative appointed by the holders of the Preferred Securities, shall have received any payment on account of the principal of or interest on the Subordinated Debentures when such payment is prohibited and before all amounts payable on, under or in connection with Senior Indebtedness are paid in full, then such payment shall be received and held in trust for the holders of Senior Indebtedness and shall be paid over or delivered first to the holders of the Senior Indebtedness remaining unpaid to the extent necessary to pay such Senior Indebtedness in full. Nothing in the Indenture shall limit the right of the Indenture Trustee, PECO Energy Capital (as holder of the Subordinated Debentures) or the Special Representative to take any action to accelerate the maturity of the Subordinated Debentures or to pursue any rights or remedies against PECO Energy; provided that all Senior Indebtedness shall be paid before PECO Energy Capital (as holder of the Subordinated Debentures) is entitled to receive any payment from PECO Energy of principal of or interest on the Subordinated Debentures. Upon the payment in full of all Senior Indebtedness, PECO Energy Capital (as holder of the Subordinated Debentures) (and any Special Representative appointed by such holders) shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments or distributions of assets of PECO Energy made on such Senior Indebtedness until the Subordinated Debentures shall be paid in full. The Indenture does not limit the aggregate amount of Senior Indebtedness which PECO Energy may issue. CERTAIN COVENANTS OF PECO ENERGY PECO Energy will covenant that it and any majority-owned subsidiary will not declare or pay any dividend on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock (other than dividends by wholly owned subsidiaries) (i) during an Extension Period, (ii) if there shall have occurred any event that, with the giving of notice or the lapse of time or both, would constitute an Event of Default under the Indenture or (iii) if PECO Energy shall be in default with respect to its payment 37 43 obligations under any Guarantee. PECO Energy will also covenant (i) to maintain direct or indirect 100% ownership of the General Partner and will cause the General Partner to maintain 100% ownership of the general partner interests of PECO Energy Capital, (ii) to cause the General Partner to at all times maintain a "fair market net worth" of at least 10% of the total capital contributions (less redemptions) to PECO Energy Capital and to maintain general partner interests representing 3% of all interests in the capital, income, gain, loss, deduction and credit of PECO Energy Capital, (iii) to cause the General Partner to timely perform all of its duties as general partner of PECO Energy Capital (including the duty to pay Distributions on the Series B Preferred Securities), and (iv) to use its reasonable efforts to cause PECO Energy Capital to remain a limited partnership and otherwise continue to be treated as a partnership for United States federal income tax purposes. PECO Energy Capital may not waive compliance or waive any default in compliance by PECO Energy with any covenant or other term in the Indenture without the approval of the Special Representative or without the direction of the holders of 66 2/3% of the aggregate stated liquidation preference of the Preferred Securities. MODIFICATION OF THE INDENTURE The Indenture contains provisions permitting PECO Energy and the Indenture Trustee, with the consent of the Special Representative or PECO Energy Capital at the direction of the holders of not less than 66 2/3% of the aggregate stated liquidation preference of the Preferred Securities to modify the Indenture or any supplemental indenture or the rights of the holders of the Subordinated Debentures issued under the Indenture; provided that no such modification, without the consent of each holder of the Subordinated Debentures affected, may, (i) change the stated maturity date of the principal of, or any installment of principal of or interest, if any, on, the Subordinated Debentures, (ii) reduce the principal amount of, or premium or rate of interest, if any, on, the Subordinated Debentures, (iii) reduce the amount of principal of an original issue discount Subordinated Debenture payable upon acceleration of the maturity thereof, (iv) make the Subordinated Debentures payable in money or securities other than as stated in the Subordinated Debentures, (v) impair the right to institute suit for the enforcement of any payment on or with respect to the Subordinated Debentures, (vi) adversely change the redemption provisions of the Subordinated Debentures, (vii) adversely affect the rights of the holders of the Subordinated Debentures with respect to subordination or (viii) reduce the principal amount of the holders of the Subordinated Debentures that must consent to an amendment of the Indenture. EVENTS OF DEFAULT The following are Events of Default under the Indenture: (i) default for 10 days in payment of any interest on any series of the Subordinated Debentures (other than the payment of interest during an Extension Period); (ii) default in payment of principal of (or premium, if any, on) any Subordinated Debentures; (iii) default for 60 days after notice in the performance of any other covenant or agreement in the Indenture or any series of Subordinated Debentures or (iv) certain events of bankruptcy, insolvency or reorganization of PECO Energy. In case an Event of Default under the Indenture shall occur and be continuing (other than an Event of Default relating to bankruptcy, insolvency or reorganization of PECO Energy, in which case principal and interest on all of the Subordinated Debentures shall become immediately due and payable), the Indenture Trustee, PECO Energy Capital (as holder of the Subordinated Debentures) or the Special Representative may declare the principal of all the Subordinated Debentures to be due and payable. Under certain circumstances, a declaration of acceleration with respect to Subordinated Debentures may be rescinded and past defaults (except, unless theretofore cured, a default in the payment of principal of or interest on the Subordinated Debentures) may be waived only by the Special Representative or by PECO Energy Capital at the direction of the holders of 66 2/3% in aggregate stated liquidation preference of Preferred Securities. PECO Energy is required to furnish to the Indenture Trustee annually a statement as to the performance by PECO Energy of its obligations under the Indenture and as to any default in such performance. 38 44 ENFORCEMENT OF CERTAIN RIGHTS OF HOLDERS OF PREFERRED SECURITIES The holders of the Preferred Securities will have the rights referred to under "Description of the Series B Preferred Securities -- Voting Rights," including the right to appoint a Special Representative authorized to exercise the rights of PECO Energy Capital, as the holder of the Series B Subordinated Debentures, to declare the principal and interest on the Series B Subordinated Debentures due and payable and to enforce the obligations of PECO Energy under the Series B Subordinated Debentures and the Indenture directly against PECO Energy, without first proceeding against PECO Energy Capital or any other person or entity. CONSOLIDATION, MERGER, SALE OR CONVEYANCE The Indenture provides that PECO Energy may not consolidate with or merge with or into, or sell, convey, transfer or lease all or substantially all its assets (either in one transaction or a series of transactions) to, any person, unless, among other things, (i) the successor person shall be organized and existing under the laws of the United States or any state thereof or the District of Columbia, and shall expressly assume by a supplemental indenture all of the obligations of PECO Energy under the Subordinated Debentures and the Indenture and (ii) immediately prior to and after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing. DEFEASANCE AND DISCHARGE Under the terms of the Indenture, PECO Energy will be deemed to have paid and discharged the entire indebtedness of the Series B Subordinated Debentures if PECO Energy irrevocably deposits with the Indenture Trustee or other paying agent, in trust, (i) cash and/or (ii) United States Government Obligations (as defined in the Indenture), which through the payment of interest thereon and principal thereof in accordance with their terms will provide cash in an amount sufficient to pay all the principal of, premium, if any, and interest on, the Subordinated Debentures then outstanding on the dates such payments are due in accordance with the terms of the Series B Subordinated Debentures. INFORMATION CONCERNING THE INDENTURE TRUSTEE Subject to the provisions of the Indenture relating to its duties, the Indenture Trustee will be under no obligation to exercise any of its rights or powers under the Indenture, unless the Indenture Trustee receives security and indemnity reasonably satisfactory to it. Subject to such provision for indemnification, the holders of a majority in principal amount of the Subordinated Debentures then outstanding thereunder or the Special Representative will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Indenture Trustee thereunder, or exercising any trust or power conferred on the Indenture Trustee. The Indenture contains limitations on the right of the Indenture Trustee, as a creditor of PECO Energy, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. In addition, the Indenture Trustee may be deemed to have a conflicting interest and may be required to resign as Indenture Trustee if at the time of default under the Indenture it is a creditor of PECO Energy. An affiliate of Meridian Trust Company, the Trustee under the Indenture, has from time to time engaged in transactions with, or performed services for, PECO Energy and its affiliates in the ordinary course of business. Mr. Joseph F. Paquette, Jr. is Chairman of the Board and a Director of PECO Energy and a Director of Meridian Bancorp, Inc., the parent corporation of the Indenture Trustee. 39 45 DESCRIPTION OF THE DEPOSITARY SHARES The summary of the terms of the Depositary Shares set forth below does not purport to be complete and is subject to, and qualified in its entirety by reference to the provisions of PECO Energy's Amended and Restated Articles of Incorporation and the Deposit Agreement (the "Deposit Agreement") among PECO Energy, First Chicago Trust Company of New York, as depositary (the "Depositary") and Holders from time to time of the Depositary Shares, and copies of which may be obtained from PECO Energy upon request. Each Depositary Share represents a one-fourth interest in a share of $7.96 Cumulative Preferred Stock (the "$7.96 Preferred Stock"). The shares of $7.96 Preferred Stock underlying the Depositary Shares are deposited with the Depositary under the Deposit Agreement. The Depositary Shares are evidenced by Depositary Receipts ("Depositary Receipts") issued by the Depositary under the Deposit Agreement. Subject to the terms of the Deposit Agreement, each owner of a Depositary Share is entitled, through the Depositary, in proportion to the one-fourth interest in a share of $7.96 Preferred Stock underlying such Depositary Share, to all rights and preferences of the $7.96 Preferred Stock (including dividend, voting, redemption and liquidation rights). Since each share of $7.96 Preferred Stock entitles the holder thereof to one vote on matters on which the holders of the $7.96 Preferred Stock are entitled to vote, each Depositary Share, in effect, entitles the Holder thereof to one-fourth of a vote thereon, rather than one full vote. The Depositary acts as registrar and transfer agent with respect to the Depositary Shares. GENERAL All shares of preferred stock of PECO Energy, including the $7.96 Preferred Stock, are of equal rank. The shares of the preferred stock of different series may vary as to (i) annual dividend rate or rates, (ii) redemption price or prices, if any, and any special terms and conditions applicable to redemption, (iii) amount or amounts payable upon any voluntary or involuntary liquidation or winding up of PECO Energy, (iv) terms and amounts of any sinking fund provided for the purchase or redemption of shares, and (v) conversion, participating or other special rights, and qualifications, limitations or restrictions thereof, if any. The authorized capital stock of PECO Energy consists of 15 million shares of preferred stock without par value, issuable in series, 100 million shares of preference stock, issuable in series, and 500 million shares of common stock without par value. DIVIDENDS AND OTHER DISTRIBUTIONS The Depositary distributes all cash dividends or other cash distributions received in respect of the $7.96 Preferred Stock, less any amount required to be withheld, to the record holders of Depositary Receipts representing the related Depositary Shares in proportion to the number of Depositary Shares owned by such holders on the relevant record date, which is the same date as the record date fixed by PECO Energy for the $7.96 Preferred Stock. In the event that the calculation of any such cash dividend or other cash distribution to be paid to any record holder on the aggregate number of Depositary Receipts held by such holder results in an amount which is a fraction of a cent, the amount the Depositary distributes to such record holder is rounded to the next highest whole cent. In the event of a distribution other than in cash, the Depositary is required to distribute property received by it to the record holders of Depositary Receipts entitled thereto, in proportion, as nearly as may be practicable, to the number of Depositary Shares owned by such holders on the relevant record date, unless PECO Energy determines that it is not feasible to make such distribution, in which case PECO Energy may adopt any other method for such distribution as it deems equitable and practicable, including the sale of such property and distribution of the net proceeds from such sale to such holders. The $7.96 Preferred Stock, pari passu with the issued and outstanding preferred stock of PECO Energy, is entitled to dividends when and as declared by the Board of Directors of PECO Energy at the rate of $7.96 (equivalent to $1.99 per annum per Depositary Share), payable quarterly on February 1, May 1, August 1 and November 1. After payment in full of all dividends accrued on the preferred stock, dividends on the common 40 46 stock of PECO Energy or any other stock junior to the preferred stock may be declared and paid as the Board of Directors of PECO Energy determine. Unless dividends on all outstanding shares of preferred stock of all series shall have been paid for all past monthly dividend periods, no dividends shall be paid or declared and no other distribution shall be made on the preference stock or the common stock, and no preference stock or common stock shall be purchased or otherwise acquired for value by PECO Energy. REDEMPTION PROVISIONS The Depositary Shares will be redeemed from the proceeds received by the Depositary resulting from the redemption, in whole or in part, of the $7.96 Preferred Stock held by the Depositary. Whenever PECO Energy redeems any $7.96 Preferred Stock held by the Depositary, the Depositary will redeem as of the same redemption date the number of Depositary Shares representing the $7.96 Preferred Stock so redeemed. The Depositary will mail the notice of redemption no less than 30 nor more than 60 days prior to the date fixed for redemption of the $7.96 Preferred Stock and Depositary Shares to the record Holders of the Depositary Receipts. If less than all of the Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will be selected by lot or pro rata or by any other method determined by PECO Energy in its sole discretion to be equitable. The $7.96 Preferred Stock is not subject to redemption prior to October 1, 1997. Thereafter, the $7.96 Preferred Stock may be redeemed as a whole at any time or in part from time to time by PECO Energy upon not less than 30 days' notice at a price of $100 per share of $7.96 Preferred Stock (equivalent to $25 per Depositary Share) plus accrued and unpaid dividends. The $7.96 Preferred Stock is not entitled to any sinking fund. Notice of redemption having been given as described above, from and after the date fixed for redemption, unless PECO Energy shall have failed to redeem the number of shares of $7.96 Preferred Stock called for redemption, the Depositary Shares so called for redemption will no longer be deemed to be outstanding, and all rights of the Holders of the Depositary Shares will cease, except for the right to receive the monies payable upon such redemption and any money or other property to which the Holders of such Depositary Shares were entitled upon such redemption and surrender to the Depositary of the Depositary Receipts evidencing such Depositary Shares. LIQUIDATION VALUE The amount per share payable on the $7.96 Preferred Stock in the event of any voluntary or involuntary liquidation of PECO Energy is $100 (equivalent to $25 per Depositary Share) plus accrued and unpaid dividends. All shares of PECO Energy preferred stock of all series are of equal rank. VOTING RIGHTS OF $7.96 PREFERRED STOCK Except as hereinafter set forth or when some mandatory provision of law shall be controlling, the holders of preferred stock of PECO Energy, including the Holders of the Depositary Shares, have no voting rights. Holders of preferred stock of PECO Energy are entitled to vote on certain matters relating to (i) authorizing of stock (other than a series of preferred stock) ranking prior to or on a parity with the preferred stock or any security convertible into shares of stock of such kind; (ii) change of the express terms of the preferred stock or of any series thereof in a manner prejudicial to the holders thereof; (iii) issuance of additional shares of preferred stock unless, for any twelve consecutive calendar months within the fifteen calendar months immediately preceding the calendar month within which such additional shares are issued, net earnings applicable to the payment of dividends on the preferred stock and net income before payment of interest charges on indebtedness and after provision for depreciation and taxes shall have been, respectively, at least two times the dividend requirements upon the entire amount of preferred stock to be outstanding immediately after the proposed issue of such additional shares, and at least one and one-half times the aggregate of such dividend requirements and interest charges for such period on the entire amount of 41 47 indebtedness then to be outstanding; (iv) issuance of additional shares of preferred stock, unless the capital of PECO Energy represented by its preference stock and common stock together with its surplus is in the aggregate at least equal to the involuntary liquidating value of the preferred stock to be outstanding immediately after the proposed issue of such additional shares of preferred stock; (v) increase in the total authorized amount of preferred stock of all series; and (vi) merger or consolidation with or into any corporation, or division, unless ordered, exempted, approved, or permitted by the SEC or other federal regulatory authority. Except as otherwise provided in the express terms of any series of preferred stock, the number of authorized shares of preferred stock of any series may be increased without vote or consent of the holders of the outstanding shares of the series so affected, subject to the aggregate limit on the authorized number of shares of preferred stock. With respect to (i), (ii), (iii), and (iv) above, the consent or affirmative vote of the holders of shares of the preferred stock entitled to cast at least two-thirds of the votes which all holders of preferred stock of all series then outstanding are entitled to cast (or of the affected series in the case of a change prejudicial to less than all series) is required; and with respect to (v) and (vi), the consent or affirmative vote of the holders of shares of the preferred stock entitled to cast at least a majority of the votes which all holders of preferred stock of all series then issued and outstanding are entitled to cast is required. Coverage under the more restrictive earnings test of PECO Energy's Amended and Restated Articles of Incorporation relating to dividend requirements and interest charges on all indebtedness and preferred stock for the twelve months ended March 31, 1995 was 2.02. The Board of Directors of PECO Energy is classified into three classes. In each election of Directors, holders of common stock elect an entire class for three-year terms. If and when dividends payable on all shares of the preferred stock are in default in an amount equal to four full quarterly dividends, and until all dividends then in default are paid or declared and set apart for payment, the holders of all shares of preferred stock, voting separately as a class, are entitled to elect the smallest number of Directors necessary to constitute a majority of the full Board of Directors, and the holders of the common stock (and except as otherwise provided by the terms of the preference stock), voting separately as a class, are entitled to elect the remaining Directors. Holders of preferred stock are not entitled to cumulative voting rights in election of Directors. The preferred stock of all series constitutes one class in any vote of shareholders except as stated above, or when some mandatory provision of law is controlling. VOTING PROCEDURES FOR DEPOSITARY SHARES Promptly upon receipt of notice of any meeting at which the holders of the $7.96 Preferred Stock are entitled to vote, the Depositary will mail the information contained in such notice of meeting to the record holders of the Depositary Receipts as of the record date for such meeting. Each such record holder of Depositary Receipts will be entitled to instruct the Depositary as to the exercise of the voting rights pertaining to the amount of the $7.96 Preferred Stock represented by such record holder's Depositary Shares. The Depositary will endeavor, insofar as practicable, to vote the amount of the $7.96 Preferred Stock represented by such Depositary Shares in accordance with such instructions, and PECO Energy will agree to take all action which may be deemed necessary by the Depositary in order to enable the Depositary to do so. The Depositary will abstain from voting any of the $7.96 Preferred Stock to the extent that it does not receive specific instructions from the Holders of Depositary Receipts. Each share of $7.96 Preferred Stock will be entitled to one vote or a fraction thereof for each $100 or fraction thereof of involuntary liquidation value of such share on matters on which the $7.96 Preferred Stock is entitled to vote. WITHDRAWAL OF $7.96 PREFERRED STOCK Upon surrender of Depositary Receipts at the principal office of the Depositary, upon payment of the Depositary's customary charges therefor, and subject to the terms of the Deposit Agreement, the owner of the Depositary Shares evidenced thereby is entitled to delivery of the number of whole shares of the $7.96 Preferred Stock and all money and other property, if any, represented by such Depositary Shares. Owners of Depositary Shares will be entitled to receive whole shares of the $7.96 Preferred Stock on the basis of one 42 48 share of $7.96 Preferred Stock for four Depositary Shares. Fractional interests in the Depositary Shares will not be issued. If the Depositary Receipts delivered by the holder evidence a number of Depositary Shares in excess of the number of Depositary Shares representing the number of whole shares of the $7.96 Preferred Stock to be withdrawn, the Depositary will deliver to such holder, at the same time, a new Depositary Receipt evidencing such excess number of Depositary Shares. Subject to the terms of the Deposit Agreement, holders of the $7.96 Preferred Stock thus withdrawn will thereafter be entitled to deposit such shares under the Deposit Agreement and to receive Depositary Receipts evidencing Depositary Shares therefor. DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN PECO Energy maintains a Dividend Reinvestment and Stock Purchase Plan (as described in a separate prospectus) which permits holders of PECO Energy's common and preferred shares to reinvest cash dividends automatically and make direct investments of up to $50,000 per calendar year in shares of common stock. Holders of Preferred Trust Receipts will not be entitled to participate in PECO Energy's Dividend Reinvestment and Stock Purchase Plan. AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT The form of Depositary Receipt evidencing the Depositary Shares and any provision of the Deposit Agreement may at any time and from time to time be amended by agreement between PECO Energy and the Depositary. Any amendment that shall impose any fees, taxes or charges shall not become effective as to outstanding Depositary Receipts until the expiration of three months after notice of such amendment has been given to the Holders of the outstanding Depositary Receipts. Any amendment which is prejudicial to any substantial existing rights of the Holders of Depositary Shares will not be effective unless such amendment has been approved by the Holders of at least a majority of the Depositary Shares then outstanding. No such amendment may impair the right, subject to the terms of the Deposit Agreement, of any owner of any Depositary Shares to surrender the Depositary Receipt evidencing such Depositary Shares with instructions to the Depositary to deliver to the holder the $7.96 Preferred Stock and all money and other property, if any represented thereby, except in order to comply with mandatory provisions of applicable law. The Deposit Agreement may be terminated by PECO Energy or the Depositary only if all outstanding Depositary Shares relating thereto have been redeemed or there has been a final distribution in respect of the $7.96 Preferred Stock in connection with any liquidation, dissolution or winding up of PECO Energy and such distribution has been distributed to the holders of the related Depositary Receipts. Notwithstanding the foregoing, PECO Energy has the right to terminate the Deposit Agreement upon 30 days' prior written notice to the Holders of the Depositary Receipts and the Depositary if (i) the deposit arrangement evidenced by the Deposit Agreement is in violation of applicable law or becomes separately taxable for federal income tax purposes or (ii) PECO Energy affects a four-for-one split of the $7.96 Preferred Stock. CHARGES OF DEPOSITARY Under the Deposit Agreement, Holders of Depositary Shares are required to pay all transfer and other taxes and governmental charges arising from the existence of the depositary arrangements. PECO Energy will pay charges of the Depositary in connection with any redemption of the $7.96 Preferred Stock. Holders of Depositary Shares pay transfer and other taxes and governmental charges and certain other charges as are provided in the Deposit Agreement to be for their accounts. RESIGNATION AND REMOVAL OF DEPOSITARY The Depositary may resign at any time by delivering to PECO Energy notice of its election to do so, and PECO Energy may at any time remove the Depositary, any such resignation or removal to take effect upon the appointment of a successor depositary and its acceptance of such appointment. Such successor depositary must be appointed within 45 days after delivery of the notice for resignation or removal and must be a bank or trust company having its principal office in the United States of America and having a combined capital and surplus of at least $50,000,000. 43 49 MISCELLANEOUS The Depositary forwards all reports and communications from PECO Energy which are delivered to the Depositary and which PECO Energy is required to furnish to the holders of the $7.96 Preferred Stock. In addition, the Depositary makes available for inspection by Holders of Depositary Receipts at the principal office of the Depositary, and at such other places as it may from time to time deem advisable, any reports and communications received from PECO Energy which are received by the Depositary as the holder of $7.96 Preferred Stock. The obligations of PECO Energy and the Depositary under the Deposit Agreement are limited to performance in good faith of their duties thereunder and neither the Depositary nor PECO Energy assumes any other obligation or will be subject to any other liability under the Deposit Agreement to holders of Depositary Receipts. Neither the Depositary nor PECO Energy will be liable if it is prevented or delayed by law or any circumstance beyond its control in performing its obligations under the Deposit Agreement. The Depositary and PECO Energy will not be obligated to prosecute or defend any legal proceeding in respect of any Depositary Shares or $7.96 Preferred Stock unless satisfactory indemnity is furnished. PECO Energy and the Depositary may rely on written advice of counsel or accountants, on information provided by Holders of Depositary Shares or other persons believed in good faith to be competent to give such information and on documents believed to be genuine and to have been signed or presented by the proper party or parties. UNITED STATES TAXATION In the opinion of Ballard Spahr Andrews & Ingersoll, counsel to PECO Energy, the following are the material United States federal income tax consequences (and certain Pennsylvania tax considerations) of the receipt of Preferred Trust Receipts in exchange for the Depositary Shares pursuant to the Offer and of the ownership and disposition of Preferred Trust Receipts. Unless otherwise stated, this summary deals only with Preferred Trust Receipts held as capital assets by holders who acquire the Preferred Trust Receipts pursuant to the Offer ("Initial Holders"). It does not deal with special classes of holders, such as dealers in securities or currencies, life insurance companies, persons holding Preferred Trust Receipts as a hedge against or which are hedged against currency risks or as a part of a straddle, or persons whose functional currency is not the United States dollar. This summary is based on the Internal Revenue Code of 1986, as amended, Treasury Regulations thereunder and administrative and judicial interpretations thereof, as of the date hereof, all of which are subject to change (possibly on a retroactive basis). ALL HOLDERS OF DEPOSITARY SHARES ARE ADVISED TO CONSULT THEIR TAX ADVISERS AS TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE RECEIPT OF PREFERRED TRUST RECEIPTS FOR DEPOSITARY SHARES AND OF THE OWNERSHIP AND DISPOSITION OF PREFERRED TRUST RECEIPTS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR OTHER LAWS. RECEIPT OF PREFERRED TRUST RECEIPTS FOR DEPOSITARY SHARES The receipt in the Exchange of Preferred Trust Receipts for Depositary Shares pursuant to the Offer will be treated for United States federal income tax purposes as consisting of three transactions: (a) a taxable exchange of Depositary Shares for the underlying Series B Subordinated Debentures followed by (b) a tax-free contribution of the underlying Series B Subordinated Debentures to PECO Energy Capital in exchange for Series B Preferred Securities followed, in turn, by (c) a tax-free deposit of Series B Preferred Securities with the Trust in consideration for the issuance of the Preferred Trust Receipts to the Holders of the Depositary Shares. The receipt of Preferred Trust Receipts for Depositary Shares pursuant to the Offer will be a taxable transaction. In the case of an Initial Holder who actually or constructively owns solely Depositary Shares, or not more than one percent of such stock and not more than one percent of any other class of PECO Energy stock, gain or loss will be recognized in an amount equal to the difference between (a) the fair market value 44 50 on the Exchange Date of the underlying Series B Subordinated Debentures received in the Exchange and (b) the Initial Holder's tax basis in the Depositary Shares exchanged therefor, and will be long-term capital gain or loss if the Depositary Shares have been held for more than one year as of such date. For this purpose, the fair market value of the Series B Subordinated Debentures deemed issued in exchange for Depositary Shares on the Exchange Date will equal the fair market value of the Preferred Trust Receipts on that date. No further gain or loss will be recognized by an Initial Holder on account of the contribution of the underlying Series B Subordinated Debentures to PECO Energy Capital or the deposit of the Series B Preferred Securities with the Trust in consideration for the issuance of the Preferred Trust Receipts. An Initial Holder's aggregate tax basis in his pro rata share of the Series B Preferred Securities (represented by his Preferred Trust Receipts) will be equal to his tax basis for the Depositary Shares surrendered in the Exchange increased by the amount of any gain or reduced by the amount of any loss recognized in the Exchange. Holders of Depositary Shares who actually or constructively own more than one percent of any class of PECO Energy stock are advised to consult their tax advisers as to the income tax consequences of exchanging Depositary Shares. CLASSIFICATION OF PECO ENERGY CAPITAL AND THE TRUST In connection with the issuance of Preferred Trust Receipts, Ballard Spahr Andrews & Ingersoll will render its tax opinion to the effect that, under then current law and assuming full compliance with the terms of the Partnership Agreement and the Trust Agreement, (a) PECO Energy Capital will be classified for United States federal income tax purposes as a partnership and not as an association taxable as a corporation and (b) the Trust will be classified as a grantor trust and not as an association taxable as a corporation. As a consequence, each Securityholder will be considered the owner of a pro rata portion of the Series B Preferred Securities held by the Trust. As a further consequence, each Securityholder will be required to include in gross income his pro rata share of the income accrued on the Series B Subordinated Debentures held by PECO Energy Capital and allocated to the Trust. Such income should not exceed distributions received by the Securityholders on the Preferred Trust Receipts except in limited circumstances described under "-- Potential Extension of Payment Period." No portion of such income will be eligible for the dividends received deduction. ACCRUAL OF ORIGINAL ISSUE DISCOUNT AND PREMIUM The underlying Series B Subordinated Debentures will be considered to have been issued with "original issue discount." PECO Energy Capital will be required to include original issue discount on the Series B Subordinated Debentures in income as it accrues, in accordance with a constant yield method based on a compounding of interest, before the receipt of cash distributions on the Preferred Trust Receipts. Each Securityholder, including a taxpayer who otherwise uses the cash method of accounting, will be required to include his pro rata share of such original issue discount allocated to the Trust. Generally, all of a Securityholder's taxable interest income with respect to the Series B Subordinated Debentures will be accounted for by PECO Energy Capital as "original issue discount" and actual distributions of stated interest will not be separately reported as taxable income. So long as the interest payment period is not extended, cash distributions received by an initial Securityholder for any monthly interest period (assuming no disposition prior to the record date for such distribution) will equal or exceed the sum of the daily accruals of income for such interest period, unless the issue price of the underlying Series B Subordinated Debentures (as defined below) is less than $25. The total amount of "original issue discount" on the underlying Series B Subordinated Debentures will equal the difference between the "issue price" of the Series B Subordinated Debentures and their "stated redemption price at maturity." Because PECO Energy has the right to extend the interest payment period of the Series B Subordinated Debentures, all of the stated interest payments on the Series B Subordinated Debentures will be includible in determining their "stated redemption price at maturity." The "issue price" of each $25 principal amount of the Series B Subordinated Debentures will be equal to the fair market value of the Depositary Shares on the Exchange Date, which may be more or less than $25, with the result that the 45 51 total amount of original issue discount on the underlying Series B Subordinated Debentures may be more or less than the amount of stated interest payable with respect thereto. POTENTIAL EXTENSION OF PAYMENT PERIOD Securityholders will continue to accrue original issue discount with respect to their pro rata share of the underlying Series B Subordinated Debentures during an extended interest payment period, and any Securityholders who dispose of Preferred Trust Receipts prior to the record date for the payment of Distributions following such extended interest payment period will not receive from the Trust any cash related thereto. Under the terms of the Indenture, PECO Energy will be permitted to extend the interest payment period on the Series B Subordinated Debentures up to 60 consecutive months. In the event that PECO Energy exercises this right, PECO Energy may not declare dividends on any of its capital stock during such extended interest period. PECO Energy currently believes that the extension of an interest payment period is unlikely. In the event that the interest payment period is extended, PECO Energy Capital will continue to accrue income, generally equal to the amount of the interest payment due at the end of the extended payment period, over the length of the extended interest payment period. Accrued income will be allocated, but not distributed, to Securityholders of record on the 15th day of each calendar month. As a result, owners of Preferred Trust Receipts during an extended interest payment period will be required to include interest in gross income in advance of the receipt of cash, and any such Securityholders who dispose of Preferred Trust Receipts prior to the record date for the payment of Distributions following such extended interest payment period will include interest in gross income but will not receive any cash related thereto from the Trust. The tax basis of a Series B Preferred Security will be increased by the amount of any interest that is included in income without a receipt of cash, and will be decreased again when and if such cash is subsequently received from PECO Energy and distributed by PECO Energy Capital and the Trust. The subsequent receipt or distribution of such cash will not be included in gross income. TREATMENT OF THE PAYMENT OF THE ADDITIONAL DISTRIBUTION The Additional Distribution payable on the first monthly Distribution date for the Preferred Trust Receipts should be treated as a dividend for United States federal income tax purposes. DISPOSITION OF THE PREFERRED TRUST RECEIPTS Gain or loss will be recognized on a sale, including a redemption for cash, of Preferred Trust Receipts in an amount equal to the difference between the amount realized and the Securityholder's tax basis in his pro rata share of Series B Preferred Securities represented by such Preferred Trust Receipts. Gain or loss recognized by a Securityholder on the sale or exchange of Preferred Trust Receipts held for more than one year generally will be taxable as long-term capital gain or loss. PENNSYLVANIA TAX CONSIDERATIONS In the opinion of Ballard Spahr Andrews & Ingersoll, the Preferred Trust Receipts are exempt from existing personal property taxes in Pennsylvania. UNITED STATES ALIEN HOLDERS For purposes of this discussion, a "United States Alien Holder" is any holder or beneficial owner who or which is (a) a nonresident alien individual or (b) a foreign corporation, partnership, estate or trust, in either case not subject to United States federal income tax on a net income basis in respect of a Series B Preferred Security. Under present United States federal income tax law, subject to the discussion below with respect to backup withholding: (i) Payments by the Trust or any of its paying agents to any United States Alien Holder will not be subject to United States withholding tax provided that (a) the beneficial owner of the Preferred Trust Receipt does not actually or constructively own 10% or more of the total combined voting power of all 46 52 classes of stock of PECO Energy, (b) the beneficial owner of the Preferred Trust Receipt is not a controlled foreign corporation that is related to PECO Energy through stock ownership, and (c) either (A) the beneficial owner of the Preferred Trust Receipt certifies to the Trust or its agent, under penalties of perjury, that it is a United States Alien Holder and provides its name and address or (B) the holder of the Preferred Trust Receipt is a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business (a "financial institution"), and such holder certifies to the Trust or its agent under penalties of perjury that such statement has been received from the beneficial owner by it or by a financial institution between it and the beneficial owner and furnishes the payor with a copy thereof; and (ii) a United States Alien Holder of a Preferred Trust Receipt will not be subject to United States federal income or withholding tax on any gain realized on the Exchange or on the sale or exchange of a Preferred Trust Receipt unless such person is present in the United States for 183 days or more in the taxable year of sale and such person has a "tax home" in the United States or certain other requirements are met. BACKUP WITHHOLDING AND INFORMATION REPORTING In general, information reporting requirements will apply to payments to noncorporate United States holders of the proceeds of the sale of the Preferred Trust Receipts within the United States and "backup withholding" at a rate of 31% will apply to such payments if the seller fails to provide a correct taxpayer identification number. Payments of the proceeds from the sale by a United States Alien Holder of Preferred Securities made to or through a foreign office of a broker will not be subject to information reporting or backup withholding, except that, if the broker is a United States person, a controlled foreign corporation for United States federal tax purposes or a foreign person 50% or more of whose gross income is effectively connected with a United States trade or business for a specified three-year period, information reporting may apply to such payment. Payments of the proceeds from the sale of Preferred Securities to or through the United States office of a broker is subject to information reporting and backup withholding unless the holder or beneficial owner certifies as to its non-United States status or otherwise establishes an exemption from information reporting and backup withholding. LEGAL MATTERS Certain matters of Delaware law relating to the validity of the Series B Preferred Securities and the Preferred Trust Receipts will be passed upon for PECO Energy Capital and the Trust by Richards, Layton & Finger, P.A., Wilmington, Delaware, special Delaware counsel to PECO Energy Capital. The validity of the Series B Guarantee and the Series B Subordinated Debentures will be passed upon on behalf of PECO Energy by Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania. Certain legal matters will be passed upon on behalf of the Dealer Manager by Drinker Biddle & Reath, Philadelphia, Pennsylvania, counsel to the Dealer Manager. Ballard Spahr Andrews & Ingersoll and Drinker Biddle & Reath, will rely on Richards, Layton & Finger, P.A. as to certain matters of Delaware law. EXPERTS The consolidated financial statements and schedules of PECO Energy incorporated by reference in this Offering Circular/Prospectus have been audited by Coopers & Lybrand L.L.P., independent accountants, for the periods indicated in their report thereon which is included in the Annual Report on Form 10-K for the year ended December 31, 1994. The consolidated financial statements and schedules audited by Coopers & Lybrand L.L.P. have been incorporated herein by reference in reliance on their report given on their authority as experts in accounting and auditing. 47 53 Facsimile copies of the Letter of Transmittal will be accepted. Letters of Transmittal, certificates representing Depositary Shares and any other required documents should be sent by each Holder of Depositary Shares or his broker, dealer, commercial bank, trust company or other nominee to the Exchange Agent at one of the addresses as set forth below: THE EXCHANGE AGENT IS: FIRST CHICAGO TRUST COMPANY OF NEW YORK By Hand or Overnight Courier in New York: First Chicago Trust Company of New York 14 Wall Street Tenders and Exchanges 8th Floor -- Suite 4680 -- PECO New York, New York 10005 By Mail: (registered or certified mail recommended) First Chicago Trust Company of New York Tenders and Exchanges Suite 4660 -- PECO P.O. Box 2559 Jersey City, New Jersey 07303-2559 By Facsimile Transmission (For Eligible Institutions Only): (201) 222-4720 or 4721 Confirm Receipt of Notice of Guaranteed Delivery by Telephone: (201) 222-4707 The Information Agent is: Georgeson & Company Inc. Wall Street Plaza New York, New York 10005 Banks and Brokers Call Collect: (212) 440-9800 ALL OTHERS CALL TOLL-FREE: (800) 223-2064 Any questions or requests for assistance or additional copies of this Offering Circular/Prospectus, the Letter of Transmittal or for copies of the Notice of Guaranteed Delivery may be directed to the Information Agent at its telephone number and location set forth above. You may also contact your broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Offer. The Dealer Manager for the Offer is: MERRILL LYNCH & CO. 54 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. PECO Energy's Bylaws provide that PECO Energy is obligated to indemnify directors and officers and other persons designated by the Board of Directors against any liability including any damage, judgment, amount paid in settlement, fine, penalty, cost or expense (including, without limitation, attorneys' fees and disbursements) incurred in connection with any proceeding. The Bylaws provide that no indemnification shall be made where the act or failure to act giving rise to the claim for indemnification is determined by arbitration or otherwise to have constituted willful misconduct or recklessness or attributable to receipt from PECO Energy of a personal benefit to which the recipient is not legally entitled. Section 518 of the Pennsylvania Business Corporation Law of 1988 provides that indemnification pursuant to a bylaw may be granted for any action taken or any failure to take any action, absent a court determination of willful misconduct or recklessness, and may be made whether or not the corporation would have the power to indemnify the person under any other provision of law. Pursuant to the Pennsylvania Business Corporation Law of 1988, PECO Energy's Bylaws provide that directors generally will not be liable for monetary damages in any action whether brought by shareholders directly or in the right of PECO Energy or by third parties unless they fail in the good faith performance of their duties as fiduciaries (the standard of care established by the Pennsylvania Business Corporation Law of 1988), and such failure constitutes self-dealing, willful misconduct or recklessness. Pursuant to the Partnership Agreement, to the fullest extent permitted by applicable law, PECO Energy Capital shall indemnify and hold harmless the General Partner or any Special Representative, any affiliate of the General Partner or any Special Representative or any officers, directors, shareholders, partners, employees, representatives or agents of the General Partner or any Special Representative, or any employee or agent of PECO Energy Capital or its affiliates (each, an "Indemnified Person") from and against any loss, damage or claim incurred by such Indemnified Person by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of PECO Energy Capital and in a manner reasonably believed to be within the scope of authority conferred on such Indemnified Person by the Partnership Agreement, except that no Indemnified Person shall be indemnified for any loss, claim or damage incurred by reason of the Indemnified Persons's gross negligence, willful misconduct or fraud; provided, however, that any such indemnity shall be provided out of and to the extent of PECO Energy Capital's assets only, and no General Partner or limited partner (collectively, "Partners"), any affiliate of a Partner or any officers, directors, shareholders, partners, employees, representatives or agents of a Partner or its respective affiliates, or any employee or agent of PECO Energy Capital or its affiliates or any Special Representative shall have any personal liability on account thereof. To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by an Indemnified Person in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by PECO Energy Capital prior to the final disposition of such claim, demand, action, suit or proceeding pursuant to an undertaking by or on behalf of the Indemnified Person to repay such amount if it shall be determined that the Indemnified Person is not entitled to be indemnified. PECO Energy has purchased directors' and officers' liability insurance. II-1 55 ITEM 21. EXHIBITS
EXHIBIT NUMBERS - ------- 1-1 Form of Dealer Manager Agreement*. 3-1 Amended and Restated Articles of Incorporation of PECO Energy (incorporated by reference to Exhibit 3-1 of PECO Energy's 1993 Annual Report on Form 10-K, File No. 1-1401). 3-2 Bylaws of PECO Energy, adopted February 26, 1990 and amended January 24, 1994 (incorporated by reference to Exhibit 3-2 of PECO Energy's 1993 Annual Report on Form 10-K, File No. 1-1401). 3-3 Certificate of Limited Partnership of PECO Energy Capital, L.P. (incorporated by reference to Registration Statement Nos. 33-53785 and 33-53785-01). 4-1 Amended and Restated Limited Partnership Agreement of PECO Energy Capital (incorporated by reference to Exhibit 10-7 of PECO Energy's 1994 Annual Report on Form 10-K, File No. 1-1401). 4-2 Amendment to Amended and Restated Limited Partnership Agreement of PECO Energy Capital. 4-3 Form of Action of General Partner creating Series B Preferred Securities. 4-4 Form of Series B Preferred Security Certificate (included in Exhibit 4-1 above). 4-5 Subordinated Debenture Indenture (incorporated by reference to Exhibit 4-5 of PECO Energy's 1994 Annual Report on Form 10-K, File No. 1-1401). 4-6 Form of Series B Subordinated Debenture (included in Exhibit 4-7 below). 4-7 Form of First Supplemental Indenture. 4-8 Form of Certificate of Trust. 4-9 Form of Trust Agreement. 4-10 Form of Certificate Representing the Preferred Trust Receipts (included in Exhibit 4-9 above). 4-11 Form of Payment and Guarantee Agreement. 5-1 Opinion of Ballard Spahr Andrews & Ingersoll relating to the legality of the Series B Subordinated Debentures and Series B Guarantees, including consent.* 5-2 Opinion of Richards, Layton & Finger, P.A., relating to the legality of the Preferred Trust Receipts, including consent.* 8 Opinion of Ballard Spahr Andrews & Ingersoll as to tax matters.* 12-1 Computations of PECO Energy's Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividend Requirements for the years ended December 31, 1990-1994 and for the three months ended March 31, 1994 and March 31, 1995 (incorporated by reference to Exhibits 12-1 and 12-2, respectively, of PECO Energy's 1994 Annual Report on Form 10-K, File No. 1-1401 and PECO Energy's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1994 and March 31, 1995). 13 PECO Energy's Annual Report on Form 10-K for the fiscal year ended December 31, 1994 and Quarterly Report on Form 10-Q for the quarter ended March 31, 1995 (incorporated by reference, File No. 1-1401). 21 List of Subsidiaries of PECO Energy. 23-1 Consent of Independent Accountants. 23-2 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5-1).
- --------------- * To be filed by amendment.
II-2 56
EXHIBIT NUMBERS - ------- 23-3 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5-2). 24 Powers of Attorney. 25 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Meridian Trust Company, as Trustee under the First Supplemental Indenture. 99-1 Proposed Form of Letter of Transmittal. 99-2 Proposed Form of Notice of Guaranteed Delivery. 99-3 Proposed Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. 99-4 Proposed Form of Letter to Clients.* 99-5 Form of Exchange Agent Agreement. 99-6 Form of Information Agent Agreement. 99-7 Form of Newspaper Announcement. 99-8 Press Release. 99-9 Proposed Form of Letter to Holders of $7.96 Cumulative Preferred Stock.
- --------------- * To be filed by amendment. ITEM 22. UNDERTAKINGS (1) The undersigned registrants hereby undertake: (a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (b) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (2) The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrants' annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-3 57 (3) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrants pursuant to the foregoing provisions, or otherwise, the Registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit, or proceeding) is asserted by such director, officer of controlling person in connection with the securities being registered, the Registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (4) The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. (5) The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. II-4 58 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant, PECO Energy Capital, L.P., has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Philadelphia, Pennsylvania, on the 5th of July, 1995. PECO Energy Capital, L.P. By: PECO Energy Capital Corp., its general partner By: /s/ J.B. MITCHELL ------------------------------------ J.B. Mitchell President Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE - --------------------------------------------- ---------------------------------- ------------- /s/ J.B. President and Director (Principal July 5, 1995 MITCHELL Executive Officer and Principal - --------------------------------------------- Financial and Accounting Officer) J.B. Mitchell /s/ K.G. Director July 5, 1995 LAWRENCE - --------------------------------------------- K.G. Lawrence /s/ N.E. Director July 5, 1995 DESCANO - --------------------------------------------- N.E. Descano
II-5 59 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant, PECO Energy Company, has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Philadelphia, Commonwealth of Pennsylvania, on the 5th of July, 1995. PECO Energy Company By: /s/ J.F. PAQUETTE, JR. ------------------------------------ J.F. Paquette, Jr. Chairman of the Board Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE - --------------------------------------------- ---------------------------------- ------------- /s/ J.F. PAQUETTE, Chairman of the Board and Director July 5, 1995 JR. - --------------------------------------------- J.F. Paquette, Jr. /s/ C.A. MCNEILL, President and Director July 5, 1995 JR. (Principal Executive Officer) - --------------------------------------------- C.A. McNeill, Jr. /s/ K.G. Senior Vice President -- Finance July 5, 1995 LAWRENCE and Chief Financial Officer - --------------------------------------------- (Principal Financial and K.G. Lawrence Accounting Officer)
This registration statement has also been signed by C.A. McNeill, Jr., Attorney-in-Fact, on behalf of the following Directors on the date indicated: Susan W. Catherwood Joseph C. Ladd M. Walter D'Alessio Edithe J. Levit Richard G. Gilmore Kinnaird R. McKee Richard H. Glanton Joseph J. McLaughlin James A. Hagen John M. Palms Nelson G. Harris Ronald Rubin Robert Subin
By: /s/ C.A. MCNEILL, JR. ---------------------------------- C.A. McNeill, Jr., Attorney-in-Fact II-6 60 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------ ------------------------------------------------------------------------------------ 1-1 Form of Dealer Manager Agreement*. 3-1 Amended and Restated Articles of Incorporation of PECO Energy (incorporated by reference to Exhibit 3-1 of PECO Energy's 1993 Annual Report on Form 10-K, File No. 1-1401). 3-2 Bylaws of PECO Energy, adopted February 26, 1990 and amended January 24, 1994 (incorporated by reference to Exhibit 3-2 of PECO Energy's 1993 Annual Report on Form 10-K, File No. 1-1401). 3-3 Certificate of Limited Partnership of PECO Energy Capital, L.P. (incorporated by reference to Registration Statement Nos. 33-53785 and 33-53785-01). 4-1 Amended and Restated Limited Partnership Agreement of PECO Energy Capital (incorporated by reference to Exhibit 10-7 of PECO Energy's 1994 Annual Report on Form 10-K, File No. 1-1401). 4-2 Amendment to Amended and Restated Limited Partnership Agreement of PECO Energy Capital. 4-3 Form of Action of General Partner creating Series B Preferred Securities. 4-4 Form of Series B Preferred Security Certificate (included in Exhibit 4-1 above). 4-5 Subordinated Debenture Indenture (incorporated by reference to Exhibit 4-5 of PECO Energy's 1994 Annual Report on Form 10-K, File No. 1-1401). 4-6 Form of Series B Subordinated Debenture (included in Exhibit 4-7 below). 4-7 Form of First Supplemental Indenture. 4-8 Form of Certificate of Trust. 4-9 Form of Trust Agreement. 4-10 Form of Certificate Representing the Preferred Trust Receipts (included in Exhibit 4-9 above). 4-11 Form of Payment and Guarantee Agreement. 5-1 Opinion of Ballard Spahr Andrews & Ingersoll relating to the legality of the Series B Subordinated Debentures and Series B Guarantees, including consent.* 5-2 Opinion of Richards, Layton & Finger, P.A., relating to the legality of the Preferred Trust Receipts, including consent.* 8 Opinion of Ballard Spahr Andrews & Ingersoll as to tax matters.* 12-1 Computations of PECO Energy's Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividend Requirements for the years ended December 31, 1990-1994 and for the three months ended March 31, 1994 and March 31, 1995 (incorporated by reference to Exhibits 12-1 and 12-2, respectively, of PECO Energy's 1994 Annual Report on Form 10-K, File No. 1-1401 and PECO Energy's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1994 and March 31, 1995). 13 PECO Energy's Annual Report on Form 10-K for the fiscal year ended December 31, 1994 and Quarterly Report on Form 10-Q for the quarter ended March 31, 1995 (incorporated by reference, File No. 1-1401). 21 List of Subsidiaries of PECO Energy. 23-1 Consent of Independent Accountants. 23-2 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5-1).
- --------------- * To be filed by amendment. 61
EXHIBIT NUMBER DESCRIPTION - ------ ------------------------------------------------------------------------------------ 23-3 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5-2). 24 Powers of Attorney. 25 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Meridian Trust Company, as Trustee under the First Supplemental Indenture. 99-1 Proposed Form of Letter of Transmittal. 99-2 Proposed Form of Notice of Guaranteed Delivery. 99-3 Proposed Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. 99-4 Proposed Form of Letter to Clients.* 99-5 Form of Exchange Agent Agreement. 99-6 Form of Information Agent Agreement. 99-7 Form of Newspaper Announcement. 99-8 Press Release. 99-9 Proposed Form of Letter to Holders of $7.96 Cumulative Preferred Stock.
- --------------- * To be filed by amendment. EX-4.2 2 AMENDMENT NO. 1 TO AMENDED LIMITED PARTNERSHIP 1 EXHIBIT 4-2 AMENDMENT NO. 1 TO THE AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF PECO ENERGY CAPITAL, L.P. This Amendment No. 1 to the Amended and Restated Limited Partnership Agreement of PECO Energy Capital, L.P., a Delaware limited partnership (the "Partnership"), dated as of June __, 1995 (this "Amendment"), is made by and among PECO Energy Capital Corp., as general partner of the Partnership, and the Persons who are limited partners of the Partnership. WHEREAS, PECO Energy Capital Corp. and PECO Energy Company have heretofore formed a limited partnership pursuant to the Delaware Act, by filing a Certificate of Limited Partnership of the Partnership with the Secretary of State of the State of Delaware on May 23, 1994, and entering into a Limited Partnership Agreement of the Partnership, dated as of May 23, 1994 (the "Original Agreement"); WHEREAS, the Original Agreement was amended and restated in its entirety by the Amended and Restated Limited Partnership Agreement of the Partnership, dated as of July 25, 1994 (the "Partnership Agreement"); WHEREAS, upon the admission of one Preferred Partner as a limited partner of the Partnership, the Class A Limited Partner withdrew from the Partnership as a limited partner of the Partnership and has no further interest in the Partnership; WHEREAS, the parties hereto desire to amend the Partnership Agreement as described herein; and WHEREAS, this Amendment does not adversely affect the powers, preferences or special rights of any series of Preferred Partner Interests. NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree to amend the Partnership Agreement as follows: ARTICLE I - AMENDMENTS 1.1 Article I of the Partnership Agreement is hereby amended to add a new definition of "Global Certificate" in its proper alphabetical order to read as follows: "Global Certificate" shall mean a Certificate issued in the form of a typewritten Certificate or Certificates representing the Book Entry Interests to be delivered to a Clearing Agency in accordance with Section 14.04. 2 1.2 Section 2.03 of the Partnership Agreement is hereby amended by inserting "(a)" immediately before the first sentence thereof and by adding a new subsection to said section to be designated as subsection "(b)" to read as follows: (b) In furtherance of the purposes set forth in Section 2.03(a) and without limiting the generality thereof, the Partnership may issue Preferred Partner Interests for consideration other than cash, including Subordinated Debentures, which consideration shall constitute payment for the Preferred Partner Interests so issued. 1.3 The last sentence of Section 3.01 of the Partnership Agreement is hereby deleted in its entirety and replaced with the following: Each Preferred Partner, or its predecessor in interest, will be deemed to have contributed to the capital of the Partnership the amount of the Purchase Price for the Preferred Partner Interests held by it. 1.4 The Partnership Agreement is hereby amended by adding a new Section 14.07 in its proper numerical order to read as follows: Section 14.07. Definitive Certificates on Original Issuance. Notwithstanding anything in this Agreement to the contrary, including, without limitation, Sections 14.04, 14.05 and 14.06, on original issuance, Certificates may but need not be issued to The Depository Trust Company in the form of a Global Certificate or Global Certificates in accordance with Section 14.04, and may but need not be issued to any Person in the form of a Definitive Certificate or Definitive Certificates in accordance with this Section 14.07. Without limiting the generality of the foregoing, in connection with the original issuance of Certificates as Definitive Certificates in accordance with this Section 14.07, (i) a Clearing Agency or a nominee of the Clearing Agency that is a limited partner of the Partnership in accordance with Sections 14.03 and 14.04 with respect to one or more series of Preferred Partner Interests shall continue to be a limited partner of the Partnership notwithstanding the fact that another Person holding a Definitive Certificate issued in accordance with this Section 14.07 has been admitted to the Partnership as a limited partner of the Partnership with respect to one or more series of Preferred Partner Interests, and (ii) Sections 14.04, 14.05 and 14.06 shall be inapplicable 2 3 to a Person holding a Definitive Certificate issued in accordance with this Section 14.07. Any Person receiving a Definitive Certificate in accordance with this Section 14.07 shall be admitted to the Partnership as a Preferred Partner pursuant to Section 2.06. 1.5 Exhibit A to the Partnership Agreement is hereby amended (a) by deleting the reference to "Cede & Co." contained therein and substituting for such reference a "__________," (b) by deleting the reference to "1994" contained in the 31st line of the first paragraph thereof and substituting for such reference "199_," and (c) by deleting the reference to "1994" contained in the last paragraph thereof and substituting for such reference "199_." ARTICLE II - MISCELLANEOUS 2.1 Capitalized Terms. Capitalized terms used herein and not otherwise defined are used as defined in the Partnership Agreement. 2.2 Full Force and Effect. Except to the extent modified hereby, the Partnership Agreement shall remain in full force and effect. 2.3 Successors and Assigns. This Amendment shall be binding upon, and shall enure to the benefit of, the parties hereto and their respective successors and assigns. 2.4 Counterparts. This Amendment may be executed in counterparts, all of which together shall constitute one agreement binding on all parties hereto, notwithstanding that all such parties are not signatories to the original or same counterpart. 2.5 Governing Law. This Agreement shall be interpreted in accordance with the laws of the State of Delaware (without regard to conflict of laws principles), all rights and remedies being governed by such laws. [SIGNATURE PAGE FOLLOWS] 3 4 GENERAL PARTNER: PECO ENERGY CAPITAL CORP. By: ----------------------------- Name: Title: PREFERRED PARTNERS: All Preferred Partners now and hereafter admitted as limited partners of the Partnership pursuant to Powers of Attorney now or hereafter executed in favor of, and delivered to, the General Partner. By: PECO ENERGY CAPITAL CORP. By: ----------------------------- Name: Title: 4 EX-4.3 3 CREATING CUMULATIVE MONTHLY INCOME 1 ACTION BY THE GENERAL PARTNER OF PECO ENERGY CAPITAL, L.P. CREATING THE % CUMULATIVE MONTHLY INCOME PREFERRED SECURITIES, SERIES B Pursuant to Section 13.01 of the Amended and Restated Limited Partnership Agreement of PECO Energy Capital, L.P. dated as of July 25, 1994 (as amended from time to time, the "Partnership Agreement"), PECO Energy Capital Corp., as general partner (the "General Partner"), of PECO Energy Capital, L.P. (the "Partnership"), desiring to state the designations, rights, privileges, restrictions, preferences, voting rights and other terms and conditions of a new series of Preferred Securities, hereby authorizes and establishes such new series of Preferred Securities according to the following terms and conditions (each capitalized term used but not defined herein shall have the meaning set forth in the Partnership Agreement): (a) Designation. ( ) interests with an aggregate liquidation preference of $ of the Preferred Securities of the Partnership, liquidation preference $25 per Preferred Security, are hereby designated as " % Cumulative Monthly Income Preferred Securities, Series B" (hereinafter the "Series B Preferred Securities"). (b) Distributions. (i) Holders of the Series B Preferred Securities shall be entitled to receive, when, as and if declared by the General Partner out of funds on hand held by the Partnership and legally available therefor, cumulative cash distributions at a rate per annum of % of the stated liquidation preference of $25 per Series B Preferred Security. Distributions on the Series B Preferred Securities which accrue from the date of original issue to shall be payable commencing on , 1995. In addition, holders of the Series B Preferred Securities shall be entitled to receive, when, as and if declared by the General Partner out of funds on hand held by the Partnership and legally available therefor a cash distribution at the rate of 7.96% per annum of the stated liquidation preference of $25 per Series B Preferred Security accumulating from August 1, 1995 through , 1995, payable on , 1995. (ii) Distributions on the Series B Preferred Securities must be declared by the General Partner in any calendar year or portion thereof to the extent that the General Partner reasonably anticipates that at the time of payment the Partnership will have, and must be paid by the Partnership to the extent that at the time of proposed payment it has, funds legally available therefor sufficient to permit such payments. Distributions on the Series B Preferred Securities will be deferred if and for so long as PECO Energy Company ("PECO Energy") defers payments to the Partnership on the Series B Debentures (as defined below). Accrued and unpaid distributions on the Series B Preferred Securities will accrue additional distributions ("Additional Distributions") in respect thereof, to the extent permitted by law, at the rate of % per annum of the stated liquidation preference of $25 per Series B Preferred Securities. Such Additional Distributions shall be payable at the time the related deferred distribution is paid, but in any event by the end of such deferral period. Distributions declared on the Series B Preferred Securities will be payable to the holders of Series B Preferred Securities as they appear on the books and records of the Partnership on the relevant record dates, which will be the 15th day of each month. (c) Redemption. (i) The Series B Preferred Securities are subject to redemption at the option of the General Partner, in whole or in part, from time to time, on or after October 1, 1997, at the Redemption Price (as defined below). (ii) Upon redemption or payment at maturity of the % Deferrable Interest Subordinated Debentures due 2025, Series B (the "Series B Debentures") issued by PECO Energy pursuant to a First Supplemental Indenture dated as of , 1995 between PECO Energy and Meridian Trust Company, as Trustee (the "Supplemental Indenture") to the Indenture dated as of July 1, 1994 between PECO Energy and Meridian Trust Company, as Trustee (as supplemented, the "Indenture"), the 2 be applied by the Partnership to redeem the Series B Preferred Securities at the redemption price of $25 per Preferred Security plus accumulated and unpaid distributions (whether or not declared) to the date fixed for redemption, together with any accrued Additional Distributions thereon (the "Redemption Price"). (iii) If a Tax Event (as defined in the Partnership Agreement) shall occur and be continuing, the Series B Preferred Securities will be subject to redemption, at the option of the General Partner, in whole or in part at the Redemption Price within ninety (90) days following the occurrence of such Tax Event. If an Investment Company Act Event shall occur and be continuing, the Series B Preferred Securities will be subject to mandatory redemption in whole at the Redemption Price within ninety (90) days following the occurrence of such Investment Company Act Event. (d) Liquidation Distribution. In the event of any voluntary or involuntary dissolution and winding up of the Partnership, holders of the Series B Preferred Securities at the time outstanding will be entitled to receive out of the assets of the Partnership available for distribution to holders of Preferred Securities, after satisfaction of liabilities to creditors as required by the Delaware Act and before any distribution of assets is made to holders of the general partner interests, but together with holders of every other series of Preferred Securities outstanding, an amount equal to, in the case of holders of Series B Preferred Securities, the aggregate of the stated liquidation preference of $25 per Series B Preferred Security plus accumulated and unpaid distributions and Additional Distributions to the date of payment (the "Liquidation Distribution"). (e) Voting Rights. The holders of the Series B Preferred Securities shall have no voting rights except as provided in the Partnership Agreement. (f) Subordination. The holders of Series B Preferred Securities are deemed, by acceptance of such Securities, to have (i) agreed that the Series B Debentures issued pursuant to the Supplemental Indenture are subordinate and junior in right of payment to all general liabilities as and to the extent provided in the Supplemental Indenture and (ii) agreed that the Guarantee relating to the Series B Preferred Securities is subordinate and junior in right of payment to all general liabilities of PECO Energy. (g) Issuance. The Series B Preferred Securities shall be issued by the Partnership and deposited with PNC Bank, Delaware, as Trustee under a trust agreement among the Trustee and the Partnership in consideration for the transfer to the Partnership of Series B Debentures with an aggregate principal amount equal to the aggregate liquidation preference of the Series B Preferred Securities. IN WITNESS WHEREOF, the General Partner as executed this Action as of the day and year first above written. PECO Energy Capital Corp. By: Name: J. Barry Mitchell Title: President EX-4.7 4 FIRST SUPPLEMENTAL INDENTURE 1 Exhibit 4-7 PECO ENERGY COMPANY AND MERIDIAN TRUST COMPANY, AS TRUSTEE FIRST SUPPLEMENTAL INDENTURE DATED AS OF __________ 1, 1995 TO INDENTURE DATED AS OF JULY 1, 1994 PROVIDING FOR THE ISSUANCE OF _____% DEFERRABLE INTEREST SUBORDINATED DEBENTURES, SERIES B 2 TABLE OF CONTENTS
Page ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE ------------------------------------------ SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ARTICLE 2 THE SERIES B DEBENTURES ----------------------- SECTION 2.01 Form of the Series B Debentures; Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ARTICLE 3 REDEMPTION ---------- SECTION 3.01 Redemption; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 SECTION 3.02. Compliance with Terms of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 ARTICLE 4 EXTENSION PERIOD ---------------- SECTION 4.01 Limitation on Right of Company to Extend Interest Payment Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 ARTICLE 5 CONCERNING THE TRUSTEE ---------------------- SECTION 5.01. Not Responsible for Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 SECTION 5.02. Qualification Under Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 ARTICLE 6 MISCELLANEOUS ------------- SECTION 6.01 Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 SECTION 6.02 Severability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 SECTION 6.03 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 SECTION 6.04 No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 SECTION 6.05. Use of Term "Trustee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 SECTION 6.06. Confirmation of Original Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 SECTION 6.07 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 SECTION 6.08 Multiple Original Copies of this Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 SECTION 6.09 Table of Contents; Headings, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 SECTION 6.10 Benefits of the Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 SECTION 6.11. Date of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(i) 3 FIRST SUPPLEMENTAL INDENTURE, dated as of 1, 1995, by and between PECO Energy Company, a Pennsylvania corporation (the "Company"), and Meridian Trust Company, a Pennsylvania trust company, as trustee (the "Trustee), to an Indenture, dated as of July 1, 1994, by and between the Company and the Trustee (the "Original Indenture") together with this Supplemental Indenture, the "Indenture"). WHEREAS, the Company has formed a wholly owned subsidiary, PECO Energy Capital Corp., which is the general partner of PECO Energy Capital, L.P., a Delaware limited partnership ("PECO Energy Capital"), to issue in series from time to time its limited partner interests ("Preferred Securities") and to loan the proceeds thereof, together with the investment by PECO Energy Capital Corp. in PECO Energy Capital, to the Company and to effect other similar arrangements. WHEREAS, the Company has duly executed and delivered to the Trustee the Original Indenture to provide for the issue of one or more series of deferrable interest subordinated debentures (herein sometimes called the "Debentures"), issuable as in the Indenture provided, and authorized and issued the initial series of Debentures which were designated therein as the 9% Deferrable Interest Subordinated Debentures, Series A; and WHEREAS, the Company desires to effect the exchange of Trust Receipts, each representing a __% Cumulative Monthly Income Preferred Security, Series B of PECO Energy Capital for _______ Depositary Shares, each representing a one-fourth interest in a share of $7.96 Cumulative Preferred Stock of the Company and the Company has authorized the issuance of $_______ aggregate principal amount of its ____% Deferrable Subordinated Debenture, Series B (the "Series B Debentures") under this First Supplemental Indenture for such purpose; WHEREAS, all things necessary to make the Series B Debentures when duly issued and executed by the Company and authenticated and delivered hereunder, the valid obligations of the Company, and to make this Supplemental Indenture a valid and binding agreement of the Company, in accordance with its terms, have been done. NOW THEREFORE: Each of the Company and the Trustee, intending to be legally bound hereby, agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Series B Debentures: 4 ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01 DEFINITIONS. "Additional Payments" means an amount equal to interest on the principal amount of the Series B Debentures at the rate of 7.96% per annum from and including August 1, 1995 through but not including the Issue Date of the Series B Debentures, payable on the first interest payment date for the Series B Debentures. "Exchange Agent" means First Chicago Trust Company of New York in its capacity as the Exchange Agent under an Exchange Agreement dated as of _______, 1995 between the Company and the Exchange Agent. "Issue Date" means _____________, 1995. "Series B Debentures" means any of the Company's _____% Deferrable Interest Subordinated Debentures, Series B issued under this Supplemental Indenture. "Series B Debentureholders" or "Series B Holder" means a Person in whose name a Series B Debenture is registered on the Registrar's books. "Series B Preferred Securities" means the ___% Cumulative Monthly Income Preferred Securities, Series B, representing limited partner interests of PECO Energy Capital. Unless otherwise defined herein, all other capitalized terms used herein have the meanings set forth in the Original Indenture. ARTICLE 2 THE SERIES B DEBENTURES SECTION 2.01 FORM OF THE SERIES B DEBENTURES; DENOMINATIONS. The Series B Debentures and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A attached hereto. The terms and provisions contained in the Series B Debentures, a form of which is annexed hereto as Exhibit A, shall constitute, and are hereby expressly made, a part of this Supplemental Indenture. The Company and the Trustee, by their execution and delivery of this First Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby. 2 5 The Trustee shall authenticate and make available for delivery the Series B Debentures for original issue in the aggregate principal amount of $ upon a Board of Directors resolution and a written order of the Company signed by two Officers of the Company, but without any further action by the Company. Of such amount, (i) $_________ of Series B Debentures shall be delivered to the Exchange Agent in exchange for Depositary Shares and subsequent delivery by the Exchange Agent (acting pursuant to the directions of the holders of such Depositary Shares) to PECO Energy Capital and (ii) $_________ of Series B Debentures shall be delivered to PECO Energy Capital as evidence of the Company's obligation with respect to the loan to the Company of the investment by PECO Energy Capital Corp. in PECO Energy Capital on the date of issuance of the Series B Subordinated Debentures. The Series B Debentures shall be issuable only in registered form without coupons and only in denominations of $25.00 and any integral multiple thereof attached hereto as Exhibit A. ARTICLE 3 REDEMPTION SECTION 3.01 REDEMPTION; NOTICE TO TRUSTEE. (a) The Series B Debentures are subject to redemption prior to maturity as provided in the form thereof attached hereto as Exhibit A. (b) If any or all of the Series B Debentures are to be redeemed pursuant to paragraph (a) above, the Company shall give notice by first class mail, postage prepaid, to the Trustee within 45 days prior to the date of such redemption. Any such notice of redemption shall state the date and price of redemption. SECTION 3.02. COMPLIANCE WITH TERMS OF INDENTURE. In case the Company shall desire to exercise such right to redeem all or any part of said Series B Debentures as hereinbefore provided, it shall comply with all the terms and provisions of Article III of the Original Indenture applicable thereto, and such redemption shall be made under and subject to the terms and provisions of said Article III and in the manner and with the effect therein provided, but at the time or times and at the respective redemption rates and upon mailing of notice, all as hereinbefore set forth in Section 3.01 of this Article. 3 6 ARTICLE 4 EXTENSION PERIOD SECTION 4.01 LIMITATION ON RIGHT OF COMPANY TO EXTEND INTEREST PAYMENT PERIOD. The Company agrees not to exercise its right under Section 4.01(b) of the Original Indenture to extend the interest payment period for the Debentures for up to 60 months until the Additional Payment has been paid in full. The Company also agrees that no extended interest payment period shall extend beyond the stated maturity date or redemption date of the Series B Debentures. ARTICLE 5 CONCERNING THE TRUSTEE The Trustee hereby reaffirms acceptance of the trust herein declared and provided and agrees to perform the same upon the terms and conditions set forth in the Indenture, as supplemented by this First Supplemental Indenture, and upon the following terms and conditions: SECTION 5.01. NOT RESPONSIBLE FOR RECITALS. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this First Supplemental Indenture or the due execution thereof by the Company or for or in respect of the recitals contained herein, all of which recitals are made solely by the Company. SECTION 5.02. QUALIFICATION UNDER TRUST INDENTURE ACT OF 1939. The Trustee hereby acknowledges that the Company proposes to qualify this First Supplemental Indenture under the Trust Indenture Act of 1939, as amended. 4 7 ARTICLE 6 MISCELLANEOUS SECTION 6.01 TRUST INDENTURE ACT CONTROLS. If any provision of this First Supplemental Indenture limits, qualifies or conflicts with the duties imposed by operation of subsection (c) of Section 318 of the TIA, the imposed duties shall control. The provisions of Sections 310 to 317, inclusive, of the TIA that impose duties on any Person (including provisions automatically deemed included in an indenture unless the indenture provides that such provisions are excluded) as a part of and govern this First Supplemental Indenture, except as, and to the extent, they are expressly excluded from this Supplemental Indenture, as permitted by the TIA. SECTION 6.02 SEVERABILITY CLAUSE. If any provision in this First Supplemental Indenture or in the Series B Debentures 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 6.03 GOVERNING LAW. This First Supplemental Indenture and the Series B Debentures shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania as applied to contracts made and performed within the Commonwealth of Pennsylvania, without regard to its principles of conflicts of laws. SECTION 6.04 NO RECOURSE AGAINST OTHERS. No director, officer, employee or stockholder, as such, of the Company shall have any liability for any obligations of the Company under the Series B Debentures or this First Supplemental Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Series B Debenture, each Series B Debentureholder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Series B Debentures. SECTION 6.05. USE OF TERM "TRUSTEE". Unless otherwise clearly required by the context, the term, "Trustee," or any other equivalent term used in this First 5 8 Supplemental Indenture shall be held and construed to mean the trustee under the Indenture for the time being whether the original or a successor trustee. SECTION 6.06. CONFIRMATION OF ORIGINAL INDENTURE. As supplemented by this First Supplemental Indenture, the Original Indenture is in all respects ratified and confirmed, and this First Supplemental Indenture shall be read, taken and construed as a part of the Indenture so that all of the rights, remedies, terms, conditions, covenants and agreements of the Original Indenture shall apply and remain in full force and effect with respect to this First Supplemental Indenture and to the Series B Debentures issued hereunder. SECTION 6.07 SUCCESSORS. All agreements of the Company in this First Supplemental Indenture and the Series B Debentures shall bind its successors and assigns. All agreements of the Trustee in this First Supplemental Indenture all bind its successors and assigns. SECTION 6.08 MULTIPLE ORIGINAL COPIES OF THIS INDENTURE. The parties may sign any number of copies of this First Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Any signed copy shall be sufficient proof of this First Supplemental Indenture. SECTION 6.09 TABLE OF CONTENTS; HEADINGS, ETC. The Table of Contents, Cross-Reference Table, and headings of the Articles and Section of this First Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof. SECTION 6.10 BENEFITS OF THE INDENTURE. Except as expressly provided in Article 10 of the Original Indenture, nothing in this First Supplemental Indenture or in the Series B Debentures, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Series B Holders and the Special Representative, any benefit or any legal or equitable right, remedy or claim under this First Supplemental Indenture. 6 9 SECTION 6.11. DATE OF INDENTURE. This First Supplemental Indenture is dated as of __________ 1, 1995, but was actually executed and delivered on __________ __, 1995. 7 10 SIGNATURES IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed this First Supplemental Indenture on behalf of the respective parties hereto as of the date first above written. PECO ENERGY COMPANY By: ------------------------------- Name: ----------------------------- Title: ---------------------------- MERIDIAN TRUST COMPANY, AS TRUSTEE By: ------------------------------- Name: ----------------------------- Title: ---------------------------- PECO Energy Capital, L.P. By its General Partner, PECO Energy Capital Corp. By --------------------- Solely for the purposes stated in the recitals hereto. 8 11 EXHIBIT A _____% DEFERRABLE INTEREST SUBORDINATED DEBENTURES, SERIES B DUE 2025 No. 1 PECO Energy Company, a Pennsylvania corporation (the "Company"), which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to PECO Energy Capital, L.P. or registered assigns, the principal sum of ______________________________________ __________________________________ Dollars on _______ __, 2025, and to pay interest on said principal sum from __________ ___, 1995 (the "Issue Date") or from the most recent interest payment date (each such date, an "Interest Payment Date") to which interest has been paid or duly provided for, monthly in arrears on the last day of each calendar month of each year commencing __________ 1, 1995 at the rate of ___% per annum), until the principal hereof shall have become due and payable, and on any overdue principal and premium, if any, and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum. The Company also promises to pay to PECO Energy Capital, L.P. or registered assigns on _________, 1995 an amount (the "Additional Payment") equal to interest on the principal amount hereof at the rate of 7.96% per annum from and including August 1, 1995 through but not including the Issue Date. The amount of interest payable on any Interest Payment Date (and the Additional Payment) shall be computed on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on the Series B Debentures is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the person in whose name this Debenture is registered at the close of business on the regular record date for such interest installment, which shall be the fifteenth day of the month of, or in the case of an Interest Payment Date which is on the first Business Day of a month, the fifteenth day of the month next preceding, such Interest Payment Date. Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the registered holders on such A-1 12 regular record date, and may be paid to the person in whose name this Debenture is registered at the close of business on a special record date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to the registered holders of this series of Debentures not less than 10 days prior to such special record date, as more fully provided in the Indenture hereinafter referred to. The principal of (and premium, if any) and the interest on this Debenture shall be payable at the office or agency of the Company maintained for that purpose in Wilmington, Delaware in any coin or currency of the United States of America which at the time of payment is legal tender for payment of public and private debts; provided however, that payment of interest may be made at the option of the Company by check mailed to the registered holder at such address as shall appear in the Debenture Register. Notwithstanding the foregoing, so long as the holder of this Debenture is PECO Energy Capital, L.P. ("PECO Energy Capital") the payment of the principal of (and premium) and interest (including the Additional Payment) in this Debenture will be made at such place and to such account as may be designated by PECO Energy Capital. The indebtedness evidenced by this Debenture is, to the extent provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness, and this Debenture is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Debenture, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on its behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination so provided and (c) appoints the Trustee its attorney-in-fact for any and all such purposes. Each Holder hereof, by its acceptance hereof, hereby waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such Holder upon said provisions. This Debenture is one of a duly authorized series of Debentures of the Company (herein sometimes referred to as the "Series B Debentures"), specified in the Indenture, limited in aggregate principal amount as specified in the Indenture, issued under and pursuant to an Indenture dated as of July 1, 1994, as supplemented by a First Supplemental Indenture, dated as of __________ 1, 1995 (as supplemented, the "Indenture") executed and delivered between the Company and Meridian Trust Company, as trustee (the "Trustee") to which reference is made to the Indenture for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Debentures. By the terms of the A-2 13 Indenture, Debentures are issuable in series which may vary as to amount, date of maturity, rate of interest and in other respects as in the Indenture provided. The Series B Debentures are subject to mandatory redemption prior to maturity at 100% of the principal amount thereof plus accrued interest to the redemption date as follows: (i) in whole upon the dissolution of PECO Energy Capital; and (ii) in whole or in part upon a redemption of the Series B Preferred Securities (as defined in the Indenture), but if in part, in an aggregate principal amount equal to the aggregate stated liquidation preference of the Series B Preferred Securities redeemed. The Series B Debentures are subject to redemption prior to maturity at any time on or after October 1, 1997 at the option of the Company, in whole or in part, at 100% of the principal amount thereof plus accrued interest to the redemption date. In the event of redemption of this Debenture in part only, a new Debenture or Debentures of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Debentures may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Debenture upon compliance by the Company with certain conditions set forth therein. Subject to certain exceptions in the Indenture which require the consent of every Holder, (i) the Indenture or the Series B Debentures may be amended with the written consent of the Holders of a majority in aggregate principal amount of the Series B Debentures at the time outstanding, and (ii) certain defaults or noncompliance with certain provisions may be waived by the written consent of the holders of a majority in aggregate principal amount of the Series B Debentures at the time outstanding. Subject to certain exceptions in the Indenture, without the consent of any Debentureholder, the Company and the Trustee may amend the Indenture or the Debentures to cure any ambiguity, defect or inconsistency, to bind a successor to the A-3 14 obligations of the Indenture, to provide for uncertificated Debentures in addition to certificated Debentures, to comply with any requirements of the Debentures or the Securities and Exchange Commission in connection with the qualification of the Indenture under the TIA, or to make any change that does not adversely affect the rights of any Debentureholder. Amendments bind all Holders and subsequent Holders. No reference herein to the Indenture and no provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest on this Debenture at the time and place and at the rate and in the money herein prescribed. After payment in full of the Additional Payment, the Company shall have the right at any time during the term of the Series B Debentures, from time to time to extend the interest payment period of such Debentures to up to 60 consecutive months (the "Extended Interest Payment Period"), at the end of which period the Company shall pay all interest then accrued and unpaid (together with interest thereon at the rate specified for the Series B Debentures to the extent that payment of such interest is enforceable under applicable law); provided that, during such Extended Interest Payment Period the Company shall not declare or pay any dividend on, redeem or purchase any of its capital stock. Prior to the termination of any such Extended Interest Payment Period, the Company may further extend such Extended Interest Payment Period, provided that such Period together with all such further extensions thereof shall not exceed 60 consecutive months. At the termination of any such Extended Interest Payment Period and upon the payment of all accrued and unpaid interest and any additional amounts then due, the Company may select a new Extended Interest Payment period. As provided in the Indenture and subject to certain limitations therein set forth, this Debenture is transferable by the registered holder hereof on the Debenture Register of the Company, upon surrender of this Debenture for registration of transfer at the office or agency of the Registrar accompanied by a written instrument or instruments of transfer in form satisfactory to the Company or the Trustee duly executed by the registered holder hereof or its attorney duly authorized in writing, and thereupon one or more new Debentures of authorized denominations and for the same aggregate principal amount and series will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto. A-4 15 Prior to presentment for registration of transfer of this Debenture, the Company, the Trustee, any paying agent and any Debenture Registrar may deem and treat the registered holder hereof as the absolute owner hereof (whether or not this Debenture shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Debenture Registrar) for the purpose of receiving payment of or on account of the principal hereof and premium, if any, and interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any payment agent nor any Debenture Registrar shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on this Debenture, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, as such, of the Company or of any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released. Debentures of this series so issued are issuable only in registered form without coupons in denominations of $25 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Debentures of this series are exchangeable for a like aggregate principal amount of Debentures of this series of a different authorized denomination, as requested by the Holder surrendering the same. All terms used in this Debenture which are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Debenture shall not be valid until an authorized officer of the Trustee manually signs the Trustee's Certificate of Authentication below. A-5 16 IN WITNESS WHEREOF, the Company has caused this Debenture to be signed manually or by facsimile by its duly authorized officers and a facsimile of its corporate seal to be affixed hereto or imprinted hereon. PECO ENERGY COMPANY (Seal) By: -------------------------- Name: Title: Attest: ----------------------- Dated: _______ __, 1995 TRUSTEE'S CERTIFICATE OF AUTHENTICATION THIS IS ONE OF THE DEBENTURES REFERRED TO IN THE WITHIN-MENTIONED INDENTURE. MERIDIAN TRUST COMPANY, as Trustee By: -------------------------- Name - ------------------------------ Authorized Signatory A-6 EX-4.8 5 CERTIFICATE OF TRUST OF PECO ENERGY CAPITAL TRUST 1 EXHIBIT 4-8 CERTIFICATE OF TRUST OF PECO ENERGY CAPITAL TRUST I THIS Certificate of Trust of PECO Energy Capital Trust I (the "Trust"), dated as of ____________________________, 1995, is being duly executed and filed by PNC Bank, Delaware, a Delaware banking corporation, as trustee, to form a business trust under the Delaware Business Trust Act (12 Del. C. Section 3801, et seq.). 1. Name. The name of the business trust formed hereby is PECO Energy Capital Trust I. 2. Delaware Trustee. The name and business address of the trustee of the Trust in the State of Delaware are PNC Bank, Delaware, 222 Delaware Avenue, Wilmington, Delaware _________. IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust, has executed this Certificate of Trust as of the date first-above written. PNC Bank, Delaware By: -------------------------------- Name: Title: EX-4.9 6 FORM OF TRUST AGREEMENT 1 Exhibit 4-9 ================================================================================ TRUST AGREEMENT OF PECO ENERGY CAPITAL TRUST I PECO ENERGY CAPITAL, L.P., as Grantor and PNC BANK, DELAWARE as Trustee Dated as of ___________, 1995 ================================================================================ 2 TABLE OF CONTENTS
Page ---- ARTICLE I DEFINITIONS ARTICLE II CREATION OF TRUST SECTION 2.01. Creation of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 SECTION 2.02. Trust Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 SECTION 2.03. Title to Trust Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 SECTION 2.04. Situs of Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 SECTION 2.05. Powers of Trustee Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 SECTION 2.06. Liability of Holders of Receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 ARTICLE III FORM OF RECEIPTS, EXECUTION AND DELIVERY, TRANSFER, AND SURRENDER OF RECEIPTS SECTION 3.01. Form and Transferability of Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 SECTION 3.02. Issuance of Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 SECTION 3.03. Registration, Transfer and Exchange of Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 SECTION 3.04. Lost or Stolen Receipts, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 SECTION 3.05. Cancellation and Destruction of Surrendered Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . 8 ARTICLE IV DISTRIBUTIONS AND OTHER RIGHTS OF HOLDERS OF RECEIPTS SECTION 4.01. Distributions of Monthly Distributions on Preferred Securities . . . . . . . . . . . . . . . . . . . . . 8 SECTION 4.02. Redemptions of Preferred Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 SECTION 4.03. Distributions in Liquidation of Grantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 SECTION 4.04. Fixing of Record Date for Holders of Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 SECTION 4.05. Payment of Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 SECTION 4.06. Special Representative and Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 SECTION 4.07. Changes Affecting Preferred Securities and Reclassifications, Recapitalizations, Etc. . . . . . . . . . . 11 ARTICLE V THE GUARANTEE SECTION 5.01. The Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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Page ---- ARTICLE VI THE TRUSTEE SECTION 6.01. Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 SECTION 6.02. Obligations of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 SECTION 6.03. Resignation and Removal of the Trustee, Appointment of Successor Trustee . . . . . . . . . . . . . . . . 14 SECTION 6.04. Corporate Notices and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 SECTION 6.05. Status of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 SECTION 6.06. Indemnification by the General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 SECTION 6.07. Fees, Charges and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 SECTION 6.08. Appointment of Co-Trustee or Separate Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 ARTICLE VII AMENDMENT AND TERMINATION SECTION 7.01. Supplemental Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 SECTION 7.02. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 ARTICLE VIII MERGER, CONSOLIDATION, ETC. OF GRANTOR SECTION 8.01. Limitation on Permitted Merger Consolidation, Etc. of Grantor . . . . . . . . . . . . . . . . . . . . . . 19 ARTICLE IX MISCELLANEOUS SECTION 9.01. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 SECTION 9.02. Exclusive Benefits of Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 SECTION 9.03. Invalidity of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 SECTION 9.04. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 SECTION 9.05. Trustee's Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 SECTION 9.06. Holders of Receipts Are Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 SECTION 9.07. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 SECTION 9.08. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 SECTION 9.09. Receipts Non-Assessable and Fully Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 SECTION 9.10. No Preemptive Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
ii 4 TRUST AGREEMENT TRUST AGREEMENT, dated as of __________, 1995 (as amended from time to time, the "Trust Agreement") among PECO ENERGY CAPITAL, L.P., a Delaware limited partnership, as grantor, PNC BANK, DELAWARE, a ___________________________, as trustee (the "Trustee"), and joined in by PECO ENERGY CAPITAL CORP., a Delaware corporation and the general partner of the Grantor, not as a grantor, trustee or beneficiary but solely for the purposes stated herein. W I T N E S S E T H: WHEREAS, the Trustee and the Grantor hereby establish the trust under the Delaware Business Trust Act (12 Del. C. Section 3801, et seq.) (as amended from time to time, the "Business Trust Act") and a Certificate of Trust filed with the Secretary of State of the State of Delaware on _______________________, 1995. WHEREAS, the Company proposes to effect the exchange (the "Exchange") of Receipts each representing a ___% Cumulative Monthly Income Preferred Security, Series B, representing a limited partner interest of the Grantor (the "Preferred Securities"), for Depositary Shares (as hereinafter defined),each representing a one-fourth interest in $7.96 Cumulative Preferred Stock of PECO Energy (as hereinafter defined); and WHEREAS, to facilitate the Exchange, PECO Energy requests the Grantor to issue ______ Preferred Securities, to deposit them in trust for the benefit of the holders of the Depositary Shares tendering shares which have been accepted in the Exchange; and WHEREAS, interests in the Trust are to be evidenced by Receipts issued by the Trustee in accordance with this Trust Agreement, which are to be delivered to the Exchange Agent (as hereinafter defined), for distribution to the holders of the Depositary Shares tendering shares which have been accepted in the Exchange; NOW, THEREFORE, in consideration of the premises contained herein and intending to be legally bound hereby, it is agreed by and among the parties hereto as follows: 5 ARTICLE I DEFINITIONS The following definitions shall apply to the respective terms (in the singular and plural forms of such terms) used in this Trust Agreement and the Receipts: "Affiliate" of any specified Person means any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Business Day" means any day other than a day on which banking institutions in the City of New York or the State of Delaware. "Business Trust Act" shall have the meaning set forth in the recitals to this Trust Agreement. "Corporate Office" means the office of the Trustee at which at any particular time its business in respect of matters governed by this Trust Agreement shall be administered, which at the date of this Trust Agreement is located at _______________________________________________. "Depositary Shares" mean receipts issued pursuant to a Deposit Agreement dated as of _______, 1992 among Philadelphia Electric Company (now PECO Energy), First Chicago Trust Company of New York, as Depositary, and the holders of such receipts, evidencing a one-fourth interest in $7.96 Cumulative Preferred Stock of PECO Energy. "Exchange" shall have the meaning set forth in the recitals to this Trust Agreement. "Exchange Agent" means First Chicago Trust Company of New York in its capacity as the Exchange Agent under an Exchange Agreement dated as of _____________, 1995 between PECO Energy and the Exchange Agent to effect the exchange of Depository Shares for Receipts. "General Partner" means PECO Energy Capital Corp., a Delaware corporation, as general partner of the Grantor, and any successor thereto pursuant to the terms of the Partnership Agreement. 2 6 "Grantor" means PECO Energy Capital, L.P., a Delaware limited partnership, and its successors. "Guarantee" means the Payment and Guarantee Agreement dated as of __________, 1995, as amended from time to time with respect to the Preferred Securities delivered by PECO Energy to the Grantor. "Holder" as applied to a Receipt shall mean the Person in whose name a Receipt is registered on the Register maintained by the Registrar for such purposes. "Partnership Agreement" means the Amended and Restated Limited Partnership Agreement of the Grantor dated as of July 25, 1994, as amended from time to time, together with any Action (as defined in the Partnership Agreement) established by the General Partner. "Paying Agent" means the Person from time to time acting as Paying Agent as provided in Section 4.05. "PECO Energy" means PECO Energy Company, a Pennsylvania corporation. "Person" means any individual, general partnership, limited partnership, corporation, limited liability company, joint venture, trust, business trust, cooperative or association and the heirs, executors, administrators, legal representatives, successors and assigns of such Person where the context so admits. "Preferred Securities" means the ___% Cumulative Monthly Income Preferred Securities, Series B, representing limited partner interests of the Grantor, or any Successor Securities issued to the Trust and held by the Trustee from time to time under this Trust Agreement for the benefit of the Holders. "Receipt" shall mean a trust receipt issued hereunder representing that interest in the Trust equal to and represented by a Preferred Security. "Register" shall have the meaning set forth in Section 3.03 of this Trust Agreement. "Registrar" shall mean any bank or trust company appointed to register Receipts and to register transfers thereof as herein provided. "Special Representative" shall have the meaning set forth in Section 13.02(d) of the Partnership Agreement. 3 7 "Successor Securities" shall have the meaning set forth in Section 13.02(e) of the Partnership Agreement. "Tendering Holders" means the holders of the Depositary Shares which have been validly tendered to the Exchange Agent and accepted by the Company for exchange. "Trust" means the trust created and governed by this Trust Agreement. "Trust Agreement" shall mean this Trust Agreement, as the same may be amended, modified, or supplemented from time to time. "Trust Estate" means all right, title and interest of the Trust in and to the Preferred Securities, and all distributions and payments with respect thereto, including payments by PECO Energy under the Guarantee. "Trust Estate" shall not include any amounts paid or payable to the Trustee pursuant to this Trust Agreement, including, without limitation, fees, expenses and indemnities. "Trustee" shall mean PNC Bank, Delaware, a _____________, and any successor as trustee hereunder. ARTICLE II CREATION OF TRUST SECTION 2.01. Creation of Trust. (a) The Trust created hereby shall be known as "PECO Energy Capital Trust I." The Grantor hereby delivers to the Trustee for deposit in the Trust a certificate representing _____ Preferred Securities for the benefit of the Holders. Each Holder is intended by the Grantor to be the beneficial owner of the number of Preferred Securities represented by the Receipt held by such Holder, not to hold an undivided interest in all of the Preferred Securities. To the fullest extent permitted by law, without the need for any other action of any Person, including the Trustee and any other Holder, each Holder shall be entitled to enforce in the name of the Trust the Trust's rights under the Preferred Securities represented by its Receipts. Subject to Section 7.02, this Trust shall be irrevocable. (b) The Trustee hereby acknowledges receipt of the Preferred Securities, registered in the name of the Trust, and its acceptance on behalf of the Trust of the Preferred Securities, and declares that it shall hold the Preferred 4 8 Securities (or any Successor Securities) in the Trust for the benefit of the Holders. SECTION 2.02. Trust Account. The Trustee shall open an account entitled "PECO Energy Capital Trust I - Trust Account." All funds received by the Trustee on behalf of the Trust from the Preferred Securities or pursuant to Article V will be deposited in such account by the Trustee until distributed as provided in Article IV. SECTION 2.03. Title to Trust Property. Legal title to all of the Trust Estate shall be vested at all times in the Trustee. The Holders shall have no right to withdraw Preferred Securities from the Trust. SECTION 2.04. Situs of Trust. The situs of the Trust shall be in Wilmington, Delaware. The Trust's bank account shall be maintained with a bank in the State of Delaware. The Trustee shall cause to be maintained the books and records of the Trust at the Corporate Office. The Trust Estate shall be held in the State of Delaware. Notwithstanding the foregoing, the Trustee may transfer such of the books and records of the Trust to a Co-Trustee appointed pursuant to Section 6.08 or to such agents as it may appoint in accordance with the Section 8.05 hereof, as shall be reasonably necessary (and for so long as may be reasonably necessary) to enable such Co-Trustee or agents to perform the duties and obligations for which such Co-Trustee or agents may be so employed. SECTION 2.05. Powers of Trustee Limited. The Trustee shall have no power to create, assume or incur indebtedness or other liabilities in the name of the Trust other than as contemplated in this Trust Agreement. The Trustee shall have full power to conduct the business of the Trust of holding the Preferred Securities for the Holders and taking the other actions provided by this Trust Agreement. SECTION 2.06. Liability of Holders of Receipts. Holders of Receipts shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. 5 9 ARTICLE III FORM OF RECEIPTS, EXECUTION AND DELIVERY, TRANSFER, AND SURRENDER OF RECEIPTS SECTION 3.01. Form and Transferability of Receipts. (a) Receipts shall be engraved or printed or lithographed with steel-engraved borders and underlying tint and shall be substantially in the form set forth in Exhibit A annexed to this Trust Agreement, with the appropriate insertions, modifications, and omissions, as hereinafter provided. (b) Receipts shall be executed by the Trustee by the manual signature of a duly authorized signatory of the Trustee, provided, however, that such signature may be a facsimile if a Registrar (other than the Trustee) shall have countersigned the Receipts by manual signature of a duly authorized signatory of the Registrar. No Receipt shall be entitled to any benefit under this Trust Agreement or be valid or obligatory for any purpose unless it shall have been executed as provided in the preceding sentence. The Registrar shall record on the Register each Receipt executed as provided above and delivered as hereinafter provided. (c) Receipts shall be in denominations of any whole number of Preferred Securities. All Receipts shall be dated the date of their execution. (d) Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Trust Agreement as may be required by the Trustee or required to comply with any applicable law or regulation or with the rules and regulations of any securities exchange upon which the Receipts may be listed or to conform with any usage with respect thereto. (e) Title to any Receipt that is properly endorsed or accompanied by a properly executed instrument of transfer or endorsement shall be transferable by delivery with the same effect as in the case of a negotiable instrument; provided, however, that until the transfer of a Receipt shall be registered on the Register as provided in Section 3.03, the Trust, the Trustee the Registrar and the Grantor may, notwithstanding any notice to the contrary, treat the Holder thereof at such time as the absolute owner thereof for the purpose of determining the Person entitled to distributions or to any notice provided for in this Trust Agreement and for all other purposes. 6 10 SECTION 3.02. Issuance of Receipts. Upon receipt by the Trustee on behalf of the Trust of a certificate or certificates for the Preferred Securities, subject to the terms and conditions of this Trust Agreement, the Trustee on behalf of the Trust shall execute and deliver the Receipts to the Exchange Agent. SECTION 3.03. Registration, Transfer and Exchange of Receipts. The Trustee shall cause to be kept at the office of the Registrar a register (the "Register") in which, subject to such reasonable regulations as the Trustee and the Registrar may prescribe, the Trustee shall provide for the registration of Receipts and of transfers and exchanges of Receipts as herein provided. The Trustee hereby appoints First Chicago Trust Company of New York as the Registrar. The Registrar shall also act as transfer agent. The Trustee may remove the Registrar and, upon removal or resignation of the Registrar, appoint a successor Registrar. Subject to the terms and conditions of this Trust Agreement, the Registrar shall register the transfers on the Register from time to time of Receipts upon any surrender thereof by the Holder in person or by a duly authorized attorney, properly endorsed or accompanied by a properly executed instrument of transfer or endorsement, together with evidence of the payment of any transfer taxes as may be required by law. Upon such surrender, the Trustee shall execute a new Receipt or Receipts representing the same number of Preferred Securities in accordance with Section 3.01(b) and deliver the same to or upon the order of the Person entitled thereto. At the option of a Holder, Receipts may be exchanged for other Receipts representing the same number of Preferred Securities. Upon surrender of a Receipt or Receipts at the office of the Registrar or such other office as the Trustee may designate for the purpose of effecting an exchange of Receipts, subject to the terms and conditions of this Trust Agreement, the Trustee shall execute and deliver a new Receipt or Receipts in representing the same number of Preferred Securities as the Receipt or Receipts surrendered. As a condition precedent to the registration of the transfer or exchange of any Receipt, the Trustee, may require (i) payment to it of a sum sufficient for the payment of any tax or other governmental charge with respect thereto; (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature; and (iii) compliance with such regulations, if any, as the Trustee may establish not inconsistent with the provisions of this Trust Agreement. No service charge shall be made to a Holder of Receipts for any registration of transfer or exchange of Receipts, but the Trustee or the Registrar shall require payment of a sum 7 11 sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Receipts. Neither the Trustee nor the Registrar shall be required (a) to register the transfer of or exchange any Receipts for a period beginning at the opening of business ten days next preceding any selection of Receipts to be redeemed and ending at the close of business on the day of the mailing a notice of redemption of Receipts or (b) to register the transfer of or exchange for another Receipt any Receipt called or being called for redemption in whole or in part, except as provided in Section 4.02. SECTION 3.04. Lost or Stolen Receipts, Etc. In case any Receipt shall be mutilated or destroyed or lost or stolen and in the absence of notice to the Trustee that such Receipt has been acquired by a bona fide purchaser, the Trustee shall execute and deliver a Receipt of like form and tenor in exchange and substitution for such mutilated Receipt or in lieu of and in substitution for such destroyed, lost or stolen Receipt, provided, however, that the Holder thereof provides the Trustee with (i) evidence satisfactory to the Trustee of such destruction, loss or theft of such Receipt, of the authenticity thereof and of his ownership thereof, (ii) reasonable indemnification satisfactory to the Trustee and (iii) payment of any expense (including fees, charges and expenses of the Trustee) in connection with such execution and delivery. Any duplicate Receipt issued pursuant to this Section 3.04 shall constitute complete and indefeasible evidence of ownership in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Receipt shall be found at any time. SECTION 3.05. Cancellation and Destruction of Surrendered Receipts. All Receipts surrendered to the Trustee shall be cancelled by the Trustee. Except as prohibited by applicable law or regulation, at any time after six years from the date of issuance of any Receipt, the Trustee may destroy such cancelled Receipts. ARTICLE IV DISTRIBUTIONS AND OTHER RIGHTS OF HOLDERS OF RECEIPTS SECTION 4.01. Distributions of Monthly Distributions on Preferred Securities. Whenever the Trust shall receive any cash distribution representing a monthly distribution on the Preferred Securities (whether or not distributed by the Grantor on the regular monthly distribution date therefor) or payment under the Guarantee in respect thereof pursuant to Article V of 8 12 this Agreement, the Trustee shall distribute to Holders of Receipts on the record date fixed pursuant to Section 4.04, such amounts in proportion to the respective numbers of Preferred Securities represented by the Receipts held by such Holders. SECTION 4.02. Redemptions of Preferred Securities. Whenever the Grantor shall elect or is required to redeem Preferred Securities in accordance with the Partnership Agreement, it shall (unless otherwise agreed in writing with the Trustee) give the Trustee not less than 35 days' prior notice thereof. The Trustee shall, as directed by the Grantor, mail, first-class postage prepaid, notice of the redemption of Preferred Securities and the proposed simultaneous redemption of the Receipts to be redeemed in connection herewith, not less than 30 and not more than 60 days prior to the date fixed for redemption (the "Redemption Date") of the Receipts. Such notice shall be mailed to the Holders of the Receipts to be redeemed, at the addresses of such Holders as the same appear on the records of the Trustee. No defect in the notice of redemption or in the mailing or delivery thereof or publication of its contents shall affect the validity of the redemption proceedings. The Grantor shall provide the Trustee with such notice, and each such notice shall state: the Redemption Date; the redemption price at which the Receipts and the Preferred Securities are to be redeemed; that all outstanding Preferred Securities are to be redeemed or, in the case of a redemption of fewer than all outstanding Receipts in connection with a partial redemption of Preferred Securities, the number of such Receipts held by such Holder to be so redeemed; and the place or places where Receipts to be redeemed are to be surrendered for redemption. In case fewer than all the outstanding Receipts are to be redeemed, the Receipts to be redeemed shall be selected by lot or pro rata (as nearly as may be practicable without creating fractional shares) or by any other equitable method determined by the Trustee. The Grantor agrees that if a partial redemption of the Preferred Securities would result in a delisting of the Receipts from any national exchange on which the Receipts are then listed, the Grantor will only redeem the Preferred Securities in whole. On the date of any such redemption of Preferred Securities, provided that the Grantor (or PECO Energy pursuant to the Guarantee) shall then have deposited with the Trustee the aggregate amount payable upon redemption of the Preferred Securities to be redeemed, the Trustee shall redeem (using the funds so deposited with it) Receipts representing the same number of Preferred Securities redeemed by the Grantor. Notice having been mailed by the Trustee as aforesaid, from and after the Redemption Date (unless the Grantor shall have failed to redeem the Preferred Securities to be redeemed by it as 9 13 set forth in the Grantor's notice provided for in this Section 4.02 and PECO Energy shall have failed to pay the redemption price of the Preferred Securities under the Guarantee), the Receipts called for redemption shall be deemed no longer to be outstanding and all rights of the Holders of Receipts (except the right to receive cash upon surrender of Receipts) shall cease and terminate. Upon surrender in accordance with said notice of the Receipts endorsed or assigned for transfer, if the Trustee shall so require, the Holders of such Receipts shall receive for each such Receipt an amount equal to the redemption price for each Preferred Security, in addition to accrued and unpaid distributions thereon to the date fixed for redemption. If fewer than all of the Receipts are called for redemption, the Trustee will deliver to the Holder of such Receipt upon its surrender to the Trustee a new Receipt evidencing the number of Receipts not called for redemption. SECTION 4.03. Distributions in Liquidation of Grantor. Upon receipt by the Trust of any distribution from the Grantor upon the liquidation of the Grantor or any payment under the Guarantee in respect thereof pursuant to Article V of this Trust Agreement, after satisfaction of creditors of the Trust as required by applicable law, the Trustee shall distribute to the Holders of Receipts on the record date fixed pursuant to Section 4.04, such amounts in proportion to the respective number of Preferred Securities which were represented by the Receipts held by such Holders. SECTION 4.04. Fixing of Record Date for Holders of Receipts. Whenever any distribution (other than upon any redemption) shall become payable, or whenever the Trustee shall receive notice of any meeting at which holders of Preferred Securities are entitled to vote or of which holders of Preferred Securities are entitled to notice, the Trustee shall in each such instance fix a record date (which shall be the same date as the record date fixed by the General Partner with respect to the Preferred Securities) for the determination of the Holders of Receipts who shall be entitled (i) to receive such distribution, and (ii) to receive notice of, and to give instructions for the exercise of voting rights at, any such meeting. SECTION 4.05. Payment of Distributions. The Trustee shall appoint one or more Paying Agents for the purpose of paying monthly distributions on, the redemption price of, and distributions in liquidation on the Receipts. The Trustee hereby appoints First Chicago Trust Company of New York to act as Paying Agent and designates the __________ office of the Paying Agent as the place of payment of the redemption price of and to distribution in liquidation on the Receipts. The aforesaid 10 14 appointment and designation shall remain in effect until changed by the Trustee. Payments of monthly distributions on the Receipts shall be payable by check mailed to the addresses of the Holders thereof on the record date therefor. Payments of the redemption price of Receipts and distributions in liquidation shall be made upon surrender of such Receipts at the office of the Paying Agent. SECTION 4.06. Special Representative and Voting Rights. (a) If the holders of the Preferred Partner Interests (as defined in the Partnership Agreement), acting as a single class, are entitled to appoint and authorize a Special Representative pursuant to Section 13.02(d) of the Partnership Agreement, the Trustee shall notify the Holders of the Receipts of such right, request direction of each Holder of a Receipt as to the appointment of a Special Representative and vote the Preferred Securities represented by such Receipt in accordance with such direction. If the General Partner fails to convene a general meeting of the Partnership as required in Section 13.02(d) of the Partnership Agreement, the Trustee shall notify the Holders of the Receipts and, if so directed by the Holders of Receipts representing Preferred Securities constituting at least 10% of the aggregated stated liquidation preference of the outstanding Preferred Partner Interests (as defined in the Partnership Agreement) shall convene such meeting. (b) Upon receipt of notice of any meeting at which the Holders of Preferred Securities are entitled to vote, the Trustee shall, as soon as practicable thereafter, mail to the Holders of Receipts a notice, which shall be provided by the General Partner and which shall contain (i) such information as is contained in such notice of meeting, (ii) a statement that the Holders of Receipts at the close of business on a specified record date fixed pursuant to Section 4.04 will be entitled, subject to any applicable provision of law, the Partnership Agreement, to instruct the Trustee as to the exercise of the voting rights pertaining to the amount of Preferred Securities represented by their respective Receipts, and (iii) a brief statement as to the manner in which such instructions may be given. Upon the written request of a Holder of a Receipt on such record date, the Trustee shall vote or cause to be voted the number of Preferred Securities represented by the Receipts evidenced by such Receipt in accordance with the instructions set forth in such request. The Grantor hereby agrees to take all reasonable action that may be deemed necessary by the Trustee in order to enable the Trustee to vote such Preferred Securities or cause such Preferred Securities to be voted. In the absence of specific instructions from the Holder of a Receipt, the Trustee will abstain from 11 15 voting to the extent of the Preferred Securities represented by such Receipt. SECTION 4.07. Changes Affecting Preferred Securities and Reclassifications, Recapitalizations, Etc. Upon any consolidation, amalgamation, merger, replacement, or conveyance, transfer or lease by the Partnership of its properties and assets as an entirety in accordance with Section 13.02(e) of the Partnership Agreement, the Trustee shall, upon the instructions of the Grantor, treat any Successor Securities or other property (including cash) that shall be received by the Trustee in exchange for or upon conversion of or in respect of the Preferred Securities as new deposited property under this Trust Agreement, and Receipts then outstanding shall thenceforth represent the proportionate interests of Holders thereof in the new deposited property so received in exchange for or upon conversion or in respect of such Preferred Securities. ARTICLE V THE GUARANTEE SECTION 5.01. The Guarantee. In connection with the issuance of the Preferred Securities, PECO Energy has delivered to the General Partner the Guarantee for the benefit of the holders of the Preferred Securities. If the General Partner or the Grantor receives any payment under the Guarantee, the General Partner or the Grantor, as the case may be, will immediately transfer such payment to the Trustee. All rights to enforce the Guarantee shall remain in the Grantor or, upon the appointment of a Special Representative under Section 13.02(d) of the Partnership Agreement, the Special Representative. ARTICLE VI THE TRUSTEE SECTION 6.01. Eligibility. This Trust Agreement shall at all times have a Trustee which is a bank and shall have a combined capital and surplus of at least $50,000,000. If such corporation publishes reports of conditions at least annually, pursuant to law or to the requirements of Federal, State, Territorial or District of Columbia supervising or examining authority, then for the purposes of this Section 6.01, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of conditions so published. 12 16 In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 6.01, the Trustee shall resign immediately in the manner and with the effect specified in Section 6.03. The Trustee shall make available for inspection by Holders of Receipts at the Corporate Office and at such other places as it may from time to time deem advisable during normal business hours any reports and communications received from the Grantor, the General Partner or PECO Energy by the Trustee as the holder of Preferred Securities. Promptly upon request from time to time by the Grantor, the Trustee shall furnish to it a list, at the sole expense of the General Partner, as of a recent date, of the names, addresses and holdings of all Persons in whose names Receipts are registered on the Register. If the Receipts shall be listed on the New York Stock Exchange, the Trustee may, with the approval of the Grantor, appoint a Registrar for registry of such Receipts in accordance with the requirements of such exchange. Such Registrar (which may be the Trustee if so permitted by the requirements of such exchange) may be removed and a substitute registrar appointed by the Trustee upon the request or with the approval of the Grantor. If the Receipts are listed on one or more other stock exchanges, the Trustee will, at the request and sole expense of the General Partner, arrange such facilities for the delivery, transfer, surrender and exchange of such Receipts as may be required by law or applicable stock exchange regulations. SECTION 6.02. Obligations of the Trustee. The Trustee does not assume any obligation nor shall it be subject to any liability under this Trust Agreement or any Receipt to Holders of Receipts other than that it agrees to use good faith in the performance of such duties as are specifically set forth in this Trust Agreement. The Trustee shall not be under any obligation to appear in, prosecute or defend any action, suit or other proceeding with respect to Preferred Securities or Receipts that in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required. The Trustee shall not be liable for any action or any failure to act by it in reliance upon the advice of or information from legal counsel, accountants, any Holder of a Receipt or any other Person believed by it in good faith to be competent to give such advice or information. The Trustee may rely and shall be protected in acting upon any written notice, 13 17 request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee, its parent, Affiliates, or subsidiaries may own, buy, sell, or deal in any class of securities of the Grantor, the General Partner or PECO Energy and its Affiliates and in Receipts or become pecuniarily interested in any transaction in which the Grantor, the General Partner or PECO Energy or its Affiliates may be interested or contract with or lend money to or otherwise act as fully or as freely as if it were not the Trustee hereunder. The Trustee may also act as transfer agent or registrar of any of the securities of the Grantor, the General Partner or PECO Energy and its Affiliates or act in any other capacity for PECO Energy or its Affiliates. The Trustee (or its officers, directors, employees, or agents) makes no representation nor shall it have any responsibility as to the validity of the registration statement pursuant to which the Receipts are registered under the Securities Act, the Preferred Securities, the Guarantee or the Receipts (except for its counter-signatures thereon) or any instruments referred to therein or herein, or as to the correctness of any statement made therein or herein; provided, however, that the Trustee is responsible for its representations in this Trust Agreement. The Trustee assumes no responsibility for the correctness of the description that appears in the Receipts, which can be taken as a statement of the Grantor summarizing certain provisions of this Trust Agreement. Notwithstanding any other provision herein or in the Receipts, the Trustee makes no warranties or representations as to the validity, genuineness or sufficiency of any Preferred Securities or the Guarantee or of the Receipts, as to the validity or sufficiency of this Trust Agreement, as to the value of the Receipts or as to any right, title or interest of the Holders of Receipts, except that the Trustee hereby represents and warrants as follows: (i) the Trustee has been duly organized and is validly existing and in good standing under the laws of the State of Delaware, with full power, authority and legal right under such laws to execute, deliver and carry out the terms of this Trust Agreement; (ii) this Trust Agreement has been duly authorized, executed and delivered by the Trustee; and (iii) this Trust Agreement constitutes a valid and binding obligation of the Trustee; enforceable against the Trustee in accordance with its terms. SECTION 6.03. Resignation and Removal of the Trustee, Appointment of Successor Trustee. The Trustee may at any time resign as Trustee hereunder by notice of its election to do so delivered to the Grantor and the General Partner, such 14 18 resignation to take effect upon the appointment of a successor trustee and its acceptance of such appointment as hereinafter provided. The Trustee may at any time be removed by the Grantor by notice of such removal delivered to the Trustee, such removal to take effect upon the appointment of a successor trustee and its acceptance of such appointment as hereinafter provided. In case at any time the Trustee acting hereunder shall resign or be removed, the Grantor shall, within 45 days after the delivery of the notice of resignation or removal, as the case may be, appoint a successor trustee, which shall be a bank or trust company, or an Affiliate of a bank or trust company, having its principal office in the United States of America and having a combined capital and surplus of at least $50,000,000. If a successor Trustee shall not have been appointed in 45 days, the resigning Trustee may petition a court of competent jurisdiction to appoint a successor trustee. Every successor trustee shall execute and deliver to its predecessor and to the Grantor and the General Partner an instrument in writing accepting its appointment hereunder, and thereupon such successor trustee, without any further act or deed, shall become fully vested with all the rights, powers, duties, and obligations of its predecessor and for all purposes shall be the Trustee under this Trust Agreement, and such predecessor, upon payment of all sums due it and on the written request of the Grantor, shall promptly execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all rights, title and interest in the Preferred Securities and any moneys or property held hereunder to such successor and shall deliver to such successor a list of the Holders of all outstanding Receipts. Any successor depositary shall promptly mail notice of its appointment to the Holders of Receipts. Any Person into or with which the Trustee may be merged, consolidated or converted, or any Person succeeding to the corporate trust business of the Trustee, shall be the successor of such Trustee without the execution or filing of any document or any further act, provided such Person shall be eligible under the provisions of the immediately preceding paragraph. SECTION 6.04. Corporate Notices and Reports. The General Partner agrees that it will deliver to the Trustee, and the Trustee will, promptly after receipt thereof, transmit to the Holders of Receipts, in each case at the address recorded in the Trustee's books, copies of all notices and reports (including financial statements) required by law, by the rules of any national securities exchange upon which the Receipts are listed 15 19 or by the Partnership Agreement to be furnished to holders of Preferred Securities. Such transmission will be at the expense of the General Partner and the General Partner will provide the Trustee with such number of copies of such documents as the Trustee may reasonably request. In addition, the Trustee will transmit to the Holders of Receipts at the Grantor's expense such other documents as may be requested by the Grantor. SECTION 6.05. Status of Trust. It is intended that the Trust shall not be an "investment company" under the Investment Company Act of 1940, as amended, and shall not be an issuer under the federal securities laws or applicable state securities laws, it being expressly understood and agreed that the Trustee is acting only in a ministerial capacity hereunder. SECTION 6.06. Indemnification by the General Partner. To the fullest extent permitted by law, the General Partner agrees to indemnify the Trustee, and any Registrar against, and hold each of them harmless from, any liability, costs and expenses (including reasonable attorneys' fees) that may arise out of or in connection with its acting as Trustee or Registrar, respectively, under this Trust Agreement and the Receipts, except for any liability arising out of negligence, bad faith or willful misconduct on the part of any such Person or Persons. SECTION 6.07. Fees, Charges and Expenses. No fees, charges, and expenses of the Trustee or any Trustee's agent hereunder or of any Registrar shall be payable by any Person other than the General Partner, except for any taxes and other governmental charges and except as provided in this Trust Agreement. If the Trustee incurs fees, charges or expenses for which it is not otherwise liable hereunder at the election of a Holder of a Receipt or other Person, such Holder or other Person will be liable for such fees, charges and expenses. All other fees, charges and expenses of the Trustee and any Trustee's agent hereunder and of any Registrar (including, in each case, fees and expenses of counsel) incident to the performance of their respective obligations hereunder will be paid by the Company from time to time in accordance with the fees schedule delivered upon the date hereof, and such additional fee upon consultation and agreement between the Trustee and the Company as to the amount and nature of such fees, charges and expenses. SECTION 6.08. Appointment of Co-Trustee or Separate Trustee. (a) Notwithstanding any other provisions of this Trust Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any party of the Trust must at the time be located, the Trustee shall have the power and may execute and deliver all instruments to appoint one or more 16 20 Persons to act as co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Trust, and to vest in such Person or Persons, in such capacity and for the benefit of the Holders, such title to the Trust, or any part thereof, and, subject to the other provisions of this Section 6.08, such powers, duties, obligations, rights and trusts as the Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as successor trustee under Section 6.03 and no notice to the Holders of the appointment of any co-trustee or separate trustee shall be required. (b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions: (i) all rights, powers, duties and obligations conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without Trustee joining in such act), except to the extent that under any laws of any jurisdiction in which any particular act or acts are to be performed, the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Trustee; (ii) no Trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and (iii) the Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee. (c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Trust Agreement. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Trust Agreement, specifically including every provision of this Trust Agreement relating to the conduct of, affecting the liability of, or affording protection to, the 17 21 Trustee. Every such instrument shall be filed with the Trustee and a copy thereof given to the Grantor. (d) Any separate trustee or co-trustee may at any time constitute the Trustee as its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect to this Trust Agreement on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. ARTICLE VII AMENDMENT AND TERMINATION SECTION 7.01. Supplemental Trust Agreement. The Grantor or the General Partner may, and the Trustee shall, at any time and from time to time, without the consent of the Holders, enter into one or more agreements supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (a) to evidence the succession of another partnership, corporation or other entity to the Grantor or the General Partner and the assumption by any such successor of the covenants of the Grantor or the General Partner herein contained; or (b) to add to the covenants of the Grantor or the General Partner for the benefit of the Holders, or to surrender any right or power herein conferred upon the Grantor or the General Partner; or (c) to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein or to make any other provisions with respect to matters or questions arising under this Trust Agreement, provided that any such action shall not adversely affect the interests of the Holders; or (d) to cure any ambiguity or correct any mistake. SECTION 7.02. Termination. The Trust Agreement shall terminate on the date that all outstanding Receipts have been redeemed or there has been a final distribution in respect of the Preferred Securities in connection with any liquidation, dissolution or winding up of the Grantor and such distribution has been distributed to the Holders of the Receipts. Except as 18 22 provided in Section 6.06 and Section 6.07, upon termination of this Trust Agreement and the Trust in accordance with the foregoing, the respective obligations and responsibilities of the Trustee, the Grantor and the General Partner created hereby shall terminate. ARTICLE VIII MERGER, CONSOLIDATION, ETC. OF GRANTOR SECTION 8.01. Limitation on Permitted Merger Consolidation, Etc. of Grantor. The Grantor agrees that it will not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entity to any corporation or other entity without the consent of the holders of the Preferred Partner Interests (as defined in the Partnership Agreement) as permitted by Section 13.02(e) of the Partnership Agreement unless the conditions of (iii), (iv) and (vii) of Section 13.02(e) of the Partnership Agreement are met with respect to the Receipts. ARTICLE IX MISCELLANEOUS SECTION 9.01. Counterparts. This Trust Agreement may be executed by the Grantor, the Trustee and the General Partner in separate counterparts, each of which counterparts, when so executed and delivered shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Trust Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Trust Agreement. Copies of this Trust Agreement shall be filed with the Trustee and the Trustee's agents and shall be open to inspection during business hours at the Corporate Office and the respective offices of the Trustee's agents, if any, by any Holder of a Receipt. SECTION 9.02. Exclusive Benefits of Parties. This Trust Agreement is for the exclusive benefit of the parties hereto and the Holders of the Receipts, and their respective successors hereunder, and shall not be deemed to give any legal 19 23 or equitable right, remedy or claim to any other Person whatsoever. SECTION 9.03. Invalidity of Provisions. In case any one or more of the provisions contained in this Trust Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby. SECTION 9.04. Notices. Any notices to be given to the Grantor or the General Partner hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or telex or telecopier confirmed by letter, addressed to the General Partner at ____________________________________, Attention: __________, or at any other place to which the General Partner may have transferred its principal executive office. Any notices to be given to the Trustee hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or telex or telecopier confirmed by letter, addressed to the Trustee at the Corporate Office. Any notices given to any Holder of a Receipt hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by telegram or telex or telecopier confirmed by letter, addressed to such Holder at the address of such record holder as it appears on the books of the Trustee or, if such holder shall have timely filed with the Trustee a written request that notices intended for such holder be mailed to some other address, at the address designated in such request. Delivery of a notice sent by mail, or by telegram or telex or telecopier shall be deemed to be effected at the time when a duly addressed letter containing the same (or a duly addressed letter confirming an earlier notice in the case of a telegram or telex or telecopier message) is deposited, postage prepaid, in a post office letter box. The Trustee may, however, act upon any telegram or telex or telecopier message received by it from the other or from any Holder of a Receipt, notwithstanding that such telegram or telex or telecopier message shall not subsequently be confirmed by letter as aforesaid. SECTION 9.05. Trustee's Agents. The Trustee may from time to time appoint agents to act in any respect for the Trustee for the purposes of this Trust Agreement. The Trustee will notify the General Partner prior to any such action. 20 24 SECTION 9.06. Holders of Receipts Are Parties. Notwithstanding that Holders of Receipts have not executed and delivered this Trust Agreement or any counterpart thereof, the Holders of Receipts from time to time shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance of delivery of Receipts. SECTION 9.07. Governing Law. This Trust Agreement and the Receipts and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, and construed in accordance with, the law of the State of Delaware without giving effect to principles of conflict of laws. SECTION 9.08. Headings. The headings of articles and sections of this Trust Agreement and in the form of the Receipt set forth in Exhibit A hereto have been inserted for convenience only and are not to be regarded as part of this Trust Agreement or to have any bearing upon the meaning or interpretation of any provision contained herein or in the Receipts. SECTION 9.09. Receipts Non-Assessable and Fully Paid. The Holders of the Receipts shall not be personally liable for obligations of the Trust, the interests in the Trust represented by the Receipts shall be non-assessable for any losses or expenses of the Trust or for any reason whatsoever, and the Receipts upon delivery thereof by the Trustee pursuant to this Trust Agreement are and shall be deemed fully paid. SECTION 9.10. No Preemptive Rights. No Holder shall be entitled as a matter of right to subscribe for or purchase, or have any preemptive right with respect to, any part of any new or additional interest in the Trust, whether now or hereafter authorized and whether issued for cash or other consideration or by way of distribution. 21 25 IN WITNESS WHEREOF, the Grantor and the Trustee and the General Partner have duly executed this agreement as of the day and year first above set forth. PECO ENERGY CAPITAL, L.P. By: PECO ENERGY CAPITAL CORP., its general partner By ---------------------------- Authorized Officer PNC BANK, DELAWARE By ---------------------------- Authorized Signatory The General Partner joins in this Trust Agreement solely for the purposes of obligating itself under Section 6.06 and Section 6.07 of the Trust Agreement and not as grantor, trustee or beneficiary. PECO ENERGY CAPITAL CORP. By ---------------------------- Authorized Officer 22 26 EXHIBIT A TRUST RECEIPT Representing a ___% Cumulative Monthly Income Preferred Security, Series B of PECO Energy Capital, L.P. (a Delaware limited partnership) No. _________ ___________ Receipts 1. ________________________________, a ___________ __________________, as Trustee (the "Trustee"), hereby certifies that ______________ is the registered owner of __________ Receipts (the "Receipts"), each representing a ___% Cumulative Income Preferred Security, Series B (the "Preferred Securities") of PECO Energy Capital, L.P., a Delaware limited partnership (the "Grantor"), deposited in trust by the Grantor with the Trustee pursuant to a Trust Agreement of PECO Energy Capital Trust I dated as of __________ (as amended or supplemented from time to time, the "Trust Agreement") among the Grantor, the Trustee and PECO Energy Capital Corp., the general partner of the Grantor (the "General Partner"). Subject to the terms of the Trust Agreement, the Holder of this Receipt is entitled to a full interest in the same number of Preferred Securities held by the Trustee under the Trust Agreement, including the distribution, voting, liquidation, and other rights of the Preferred Securities specified in the Amended and Restated Limited Partnership Agreement of the Grantor, as amended, a copy of which is on file at the Corporate Office. 2. The Trust Agreement. Receipts of which this Receipt is one, are issued upon the terms and conditions set forth in the Trust Agreement. The Trust Agreement (a copy of which is on file at the Corporate Office of the Trustee) sets forth the rights of Holders of Receipts and the rights and duties of the Trustee, the Grantor and the General Partner. The statements made on the face and the reverse of this Receipt are summaries of certain provisions of the Trust Agreement and are subject to the detailed provisions thereof, to which reference is hereby made. In the event of any conflict or discrepancy between the provisions of this Receipt and the provisions of the Trust Agreement, the provisions of the Trust Agreement will govern. Unless otherwise expressly herein provided, all defined terms used herein shall have the meanings ascribed thereto in the Trust Agreement. 3. Distributions of Monthly Distributions on Preferred Securities. Whenever the Trustee shall receive any cash distribution representing a monthly distribution on the Preferred Securities (whether or not distributed by the Grantor on the regular monthly distribution date therefor) or payment by A-1 27 PECO Energy Company ("PECO Energy") under the Payment and Guarantee Agreement dated as of ___________, 1995 (the "Guarantee") in respect thereof, the Trustee shall distribute to record Holders of Receipts on the record date therefor, such amounts in proportion to the respective numbers of Preferred Securities represented by the Receipts held by such Holders. 4. Redemptions of Preferred Securities. Whenever the Grantor shall elect or is required to redeem Preferred Securities in accordance with the Partnership Agreement, it shall (unless otherwise agreed in writing with the Trustee) give the Trustee not less than 35 days' prior notice thereof. The Trustee shall, as directed by the Grantor, mail, first-class postage prepaid, notice of the redemption of Preferred Securities and the proposed simultaneous redemption of the Receipts to be redeemed, not less than 30 and not more than 60 days prior to the date fixed for redemption (the "redemption date") of such Preferred Securities and Receipts. Such notice shall be mailed to the Holders of the Receipts, at the addresses of such Holders as the same appear on the records of the Trustee. No defect in the notice of redemption or in the mailing or delivery thereof or publication of its contents shall affect the validity of the redemption proceedings. In case fewer than all the outstanding Receipts are to be redeemed, the Receipts to be redeemed shall be selected by lot or pro rata (as nearly as may be practicable without creating fractional shares) or by any other equitable method determined by the Grantor. On the date of any such redemption of Preferred Securities, provided that the Grantor (or PECO Energy pursuant to the Guarantee) shall then have deposited with the Trustee the aggregate amount payable upon redemption of the Preferred Securities to be redeemed, the Trustee shall redeem (using the funds so deposited with it) Receipts representing the same number of Preferred Securities to be redeemed by the Grantor. 5. Distributions in Liquidation. Upon receipt by the Trustee of any distribution from the Grantor upon the liquidation of the Grantor or any payment under the Guarantee in respect thereof, after satisfaction of creditors of the Trust required by applicable law, the Trustee shall distribute to record Holders of receipts on the record date therefor, such amounts in proportion to the respective number of Preferred Securities which were represented by the Receipts held by such Holders. 6. Fixing of Record Date for Holders of Receipts. Whenever any distribution (other than upon any redemption) shall become payable, or whenever the Trustee shall receive notice of any meeting at which holders of Preferred Securities are entitled to vote or of which holders of Preferred Securities are entitled to notice, the Trustee shall in each such instance fix a record date (which shall be the same date as the record date fixed by the General Partner with respect to the Preferred Securities) for A-2 28 the determination of the record holders of Receipts who shall be entitled (i) to receive such distribution or (ii) to receive notice of, and to give instructions for the exercise of voting rights at, any such meeting. 7. Payment of Distributions. Payments of monthly distributions on the Receipts shall be payable by check mailed to the addresses of the Holders thereof on the record date therefor. Payments of the redemption price of Receipts and distributions in liquidation shall be made against surrender of such Receipts at the office of First Chicago Trust Company of New York, as the Paying Agent. 8. Special Representative; Voting Rights. (a) If the holders of the Preferred Partner Interests (as defined in the Partnership Agreement), acting as a single class, are entitled to appoint and authorize a Special Representative pursuant to Section 13.02(d) of the Partnership Agreement, the Trustee shall notify the Holders of the Receipts of such right, request direction of each Holder of a Receipt and vote the Preferred Securities represented by such Receipt in accordance with such direction. If the General Partner fails to convene a general meeting of the Partnership as required in Section 13.02(d) of the Partnership Agreement, the Trustee shall notify the Holders of the Receipts and, if so directed by the Holders of Receipts representing Preferred Securities constituting at least 10% of the aggregated stated liquidation preference of the outstanding Preferred Partner Interests (as defined in the Partnership Agreement) shall convene such meeting. (b) Upon receipt of notice of any meeting at which the holders of Preferred Securities are entitled to vote, the Trustee shall, as soon as practicable thereafter, mail to the Holders of Receipts a notice, which shall be provided by the Grantor and which shall contain (i) such information as is contained in such notice of meeting, (ii) a statement that the Holders of Receipts at the close of business on a specified record date therefor will be entitled, subject to any applicable provision of law, the Partnership Agreement, to instruct the Trustee as to the exercise of the voting rights pertaining to the amount of Preferred Securities represented by their respective Receipts, and (iii) a brief statement as to the manner in which such instructions may be given. Upon the written request of a Holder of a Receipt on such record date, the Trustee shall vote or cause to be voted the number of Preferred Securities represented by the Receipts in accordance with the instructions set forth in such request. In the absence of specific instructions from the Holder of a Receipt, the Trustee will abstain from voting to the extent of the Preferred Securities represented by such Receipt. A-3 29 9. Changes Affecting Preferred Securities and Reclassifications, Recapitalizations, Etc. Upon any consolidation, amalgamation, merger, replacement, or conveyance, transfer or lease by the Partnership of its properties and assets an entirety in accordance with Section 13.02(e) of the Partnership Agreement, the Trustee shall, upon the instructions of the Grantor, treat any Successor Securities or other property that shall be received by the Trustee in exchange for or upon conversion of or in respect of the Preferred Securities as new deposited property under this Trust Agreement, and Receipts then outstanding shall thenceforth represent the proportionate interests of Holders thereof in the new deposited property so received in exchange for or upon conversion or in respect of such Preferred Securities. 10. Transfer and Exchange of Receipts. Subject to the terms and conditions of the Trust Agreement, the Trustee shall register the transfer on its books from time to time of Receipts upon any surrender thereof by the Holder in person or by a duly authorized attorney, properly endorsed or accompanied by a properly executed instrument of transfer or endorsement, together with evidence of the payment of any transfer taxes as may be required by law. Upon such surrender, the Trustee shall execute a new Receipt or Receipts representing the same aggregate number of the Receipt or Receipts surrendered and deliver the same to or upon the order of the Person entitled thereto. Upon surrender of a Receipt or Receipts at the Corporate Office or such other office as the Trustee may designate for the purpose of effecting an exchange of Receipts, subject to the terms and conditions of the Trust Agreement, the Trustee shall execute and deliver a new Receipt or Receipts in representing the same number of Preferred Securities as the Receipt or Receipts surrendered. As a condition precedent to the registration of transfer or exchange of any Receipt, the Trustee, may require (i) payment to it of a sum sufficient for the payment of any tax or other governmental charge with respect thereto; (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature; and (iii) compliance with such regulations, if any, as the Trustee may establish not inconsistent with the provisions of the Trust Agreement. The Trustee shall not be required (a) to register the transfer of or exchange any Receipts for a period beginning at the opening of business ten days next preceding any selection of Receipts to be redeemed and ending at the close of business on the day of the mailing a notice of redemption of Receipts or (b) to transfer or exchange for another Receipt any Receipt called or being called for redemption in whole or in part. A-4 30 11. Title to Receipts. It is a condition of this Receipt, and every successive Holder hereof by accepting or holding the same consents and agrees, that title to this Receipt, when properly endorsed or accompanied by a properly executed instrument of transfer or endorsement, is transferable by delivery with the same effect as in the case of a negotiable instrument; provided, however, that until the transfer of this Receipt shall be registered on the books of the Trustee, the Trustee may, notwithstanding any notice to the contrary, treat the Holder hereof at such time as the absolute owner hereof for the purpose of determining the Person entitled to distributions or to any notice provided for in the Trust Agreement and for all other purposes. 12. Reports, Inspection of Transfer Books. The Trustee shall make available for inspection by Holders of Receipts at the Corporate Office and at such other places as it may from time to time deem advisable during normal business hours any reports and communications received by the Trustee as the record holder of Preferred Securities. The Trustee shall keep books at the Corporate Office for the registration and registration of transfer of Receipts, which books at all reasonable times will be open for inspection by the record Holders of Receipts as and to the extent provided by applicable law. 13. Governing Law. The Trust Agreement and this Receipt and all rights thereunder and hereunder and provisions thereof and hereof shall be governed by, and construed in accordance with, the law of the Delaware without giving effect to principles of conflict of laws. 14. Receipt Non-Assessable and Fully Paid. Holders of Receipts shall not be personally liable for obligations of the Trust, the interest in the Trust represented by the Receipts shall be non-assessable for any losses or expenses of the Trust or for any reason whatsoever, and the Receipts upon delivery thereof by the Trustee pursuant to the Trust Agreement are and shall be deemed fully paid. 15. Liability of Holders of Receipts. Holders of Receipts shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. 16. No Preemptive Rights. No Holder shall be entitled as a matter of right to subscribe for or purchase, or have any preemptive right with respect to, any part of any new or additional interest in the Trust, whether now or hereafter A-5 31 authorized and whether issued for cash or other consideration or by way of distribution. This Receipt shall not be entitled to any benefits under the Trust Agreement or be valid or obligatory for any purpose unless this Receipt shall have been executed manually or, if a Registrar for the Receipts (other than the Trustee) shall have been appointed, by facsimile signature of a duly authorized signatory of the Trustee and, if executed by facsimile signature of the Trustee, shall have been countersigned manually by such Registrar by the signature of a duly authorized signatory. THE TRUSTEE IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY PREFERRED SECURITIES. THE TRUSTEE ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE FOREGOING DESCRIPTION WHICH CAN BE TAKEN AS A STATEMENT OF THE GRANTOR SUMMARIZING CERTAIN PROVISIONS OF THE TRUST AGREEMENT. UNLESS EXPRESSLY SET FORTH IN THE TRUST AGREEMENT, THE TRUSTEE MAKES NO WARRANTIES OR REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF PREFERRED SECURITIES OR OF THE RECEIPTS; AS TO THE VALIDITY OR SUFFICIENCY OF THE TRUST AGREEMENT; AS TO THE VALUE OF THE RECEIPTS OR AS TO ANY RIGHT, TITLE OR INTEREST OF THE RECORD HOLDERS OF THE TRUSTEE RECEIPTS IN AND TO THE RECEIPTS. Dated: PNC BANK, DELAWARE, as Trustee, By ---------------------------- Authorized Officer Countersigned by First Chicago Trust Company of New York, as Registrar By -------------------------------- Authorized Officer A-6 32 [FORM OF ASSIGNMENT] FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto ____________________ the within Receipt and all rights and interests represented by the Receipts evidenced thereby, and hereby irrevocably constitutes and appoints ____________________ attorney, to transfer the same on the books of the within-named Trustee, with full power of substitution in the premises. Dated: Signature: ----------------- ------------------------ NOTE: The signature to this assignment must correspond with the name as written upon the face of the Receipt in every particular, without alteration or enlargement, or any change whatever. Signature Guarantee: - ------------------------------ A-7 EX-4.11 7 PAYMENT AND GUARANTEE AGREEMENT 1 PAYMENT AND GUARANTEE AGREEMENT THIS PAYMENT AND GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of , 1995, is executed and delivered by PECO Energy Company, a Pennsylvania corporation (the "Guarantor"), for the benefit of the Holders (as defined below) of the Series B Preferred Securities (as defined below) of PECO Energy Capital, L.P., a Delaware limited partnership ("PECO Energy Capital"), the general partner of which is PECO Energy Capital Corp. (the "General Partner"), a Delaware corporation and a wholly owned subsidiary of the Guarantor. WHEREAS, PECO Energy Capital is issuing on the date hereof $ aggregate stated liquidation preference of limited partner interests of a series designated the % Cumulative Monthly Income Preferred Securities, Series B (the "Series B Preferred Securities"), and the Guarantor desires to enter into this Guarantee Agreement for the benefit of the Holders, as provided herein; WHEREAS, the Guarantor will issue Series B Subordinated Debentures (as defined below) in accordance with the Indenture (as defined below) to PECO Energy Capital in an amount equal to the aggregate stated liquidation preference of the Series B Preferred Securities and the capital contribution of the General Partner to PECO Energy Capital (the "G.P. Capital Contribution"); and WHEREAS, the Guarantor desires to irrevocably and unconditionally agree to the extent set forth herein to pay to the Holders the Guarantee Payments (as defined below) and to make certain other undertakings on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the premises and other consideration, receipt of which is hereby acknowledged, the Guarantor, intending to be legally bound hereby, agrees as follows: ARTICLE I As used in this Guarantee Agreement, each term set forth below, unless the context otherwise requires, shall have the following meaning. Each capitalized term used but not otherwise defined herein shall have the meaning assigned to such term in the Amended and Restated Limited Partnership Agreement of PECO Energy Capital dated as of July 25, 1994 (as amended from time to time, the "Limited Partnership Agreement"). "Guarantee Payments" shall mean the following payments, without duplication, to the extent not paid by PECO Energy Capital: (i) any accumulated and unpaid monthly distributions on the Series B Preferred Securities out of moneys legally available therefor held by PECO Energy Capital, (ii) the Redemption Price (as defined below) payable with respect to any Series B Preferred Securities called for redemption by PECO Energy Capital out of moneys legally available therefor held by PECO Energy Capital, and (iii) upon liquidation of PECO Energy Capital, the lesser of (a) the Liquidation Distribution (as defined below) and (b) the amount of assets of PECO Energy Capital available for distribution to the Holders in liquidation of PECO Energy Capital. "Holders" shall mean the persons or entities in whose name any Series B Preferred Securities are registered on the registration books maintained by the PECO Energy Capital; provided, however, that in determining whether the Holders of the requisite percentage of Series B Preferred Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or any entity owned more than 50% by the Guarantor, either directly or indirectly. "Indenture" shall mean the Indenture, dated as of July 1, 1994, as supplemented by the Supplemental Indenture, between the Guarantor and Meridian Trust Company, pursuant to which the Guarantor has issued and will issue its Deferrable Interest Subordinated Debentures in series. 2 liquidation preference of $25 per Series B Preferred Security and all accumulated and unpaid distributions to the date of payment. "Preferred Trust Receipts" shall mean the trust receipts issued by the Trust each representing a Series B Preferred Security. "Redemption Price" shall mean the aggregate of $25 per Series B Preferred Security and all accumulated and unpaid distributions to the date fixed for redemption. "Special Representative" shall mean any representative of the Holders appointed pursuant to Section 13.02(d) of the Limited Partnership Agreement. "Supplemental Indenture" shall mean the First Supplemental Indenture, dated as of , 1995, between the Guarantor and Meridian Trust Company, pursuant to which the Guarantor has issued its % Deferrable Interest Subordinated Debentures, Series B (the "Series B Subordinated Debentures") in an amount equal to the aggregate stated liquidation preference of the Series B Preferred Securities and the G.P. Capital Contribution. "Trust" shall mean PECO Energy Capital Trust I, a Delaware business trust. "Trustee" shall mean PNC Bank, Delaware or a successor trustee under the Trust Agreement. ARTICLE II SECTION 2.01. The Guarantor hereby irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments, as and when due (except to the extent paid by PECO Energy Capital), to the fullest extent permitted by law, regardless of any defense, right of set-off or counterclaim which the Guarantor may have or assert against PECO Energy Capital, the General Partner, the Trust or the Trustee. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment by the Guarantor to the Holders or by payment of such amounts by PECO Energy Capital to the Holders. Notwithstanding anything to the contrary herein, the Guarantor retains all of its rights under Section of the Supplemental Indenture to extend the interest payment period on the Series B Subordinated Debentures and the Guarantor shall not be obligated hereunder to pay during an Extension Period any monthly distributions on the Series B Preferred Securities which are not paid by PECO Energy Capital during such Extension Period. SECTION 2.02. The Guarantor hereby waives notice of acceptance of this Guarantee Agreement and of any liability to which it applies or may apply, presentment, demand for payment, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. SECTION 2.03. Except as otherwise set forth herein, the obligations, covenants, agreements and duties of the Guarantor under this Guarantee Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the release or waiver, by operation of law or otherwise, of the performance or observance by PECO Energy Capital of any express or implied agreement, covenant, term or condition relating to the Series B Preferred Securities to be performed or observed by PECO Energy Capital; (b) the extension of time for the payment by PECO Energy Capital of all or any portion of the distributions, Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Series B Preferred Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Series B Preferred Securities; (c) any failure, omission, delay or lack of diligence on the part of the Holders or the Special Representative to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders or the Special Representative pursuant to the terms of the Series B Preferred Securities, or any action on the part of PECO Energy Capital granting indulgence or extension of any kind; 3 insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, PECO Energy Capital or any of the assets of PECO Energy Capital; (e) any invalidity of, or defect or deficiency in, any of the Series B Preferred Securities; or (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred. There shall be no obligation to the Holders to give notice to, or obtain the consent of, the Guarantor with respect to the occurrence of any of the foregoing. SECTION 2.04. The Guarantor expressly acknowledges that (i) this Guarantee Agreement will be deposited with the General Partner to be held for the benefit of the Holders; (ii) in the event of the appointment of a Special Representative, the Special Representative may enforce this Guarantee Agreement for such purpose; (iii) if no Special Representative has been appointed, the General Partner has the right to enforce this Guarantee Agreement on behalf of the Holders; (iv) the holders of Preferred Trust Receipts representing not less than 10% in aggregate stated liquidation preference of the Series B Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available in respect of this Guarantee Agreement including the giving of directions to the General Partner or the Special Representative as the case may be; and (v) if the General Partner or the Special Representative fails to enforce this Guarantee Agreement as above provided, any holders of Preferred Trust Receipts representing Series B Preferred Securities may institute a legal proceeding directly against the Guarantor to enforce its rights under this Guarantee Agreement, without first instituting a legal proceeding against PECO Energy Capital or any other person or entity. SECTION 2.05. This is a guarantee of payment and not of collection. The General Partner or Special Representative may enforce this Guarantee Agreement directly against the Guarantor, and the Guarantor will waive any right or remedy to require that any action be brought against PECO Energy Capital or any other person or entity before proceeding against the Guarantor. The Guarantor agrees that this Guarantee Agreement shall not be discharged except by payment of the Guarantee Payments in full (to the extent not paid by PECO Energy Capital) and by complete performance of all obligations of the Guarantor contained in this Guarantee Agreement. SECTION 2.06. The Guarantor will be subrogated to all rights of the Holders against PECO Energy Capital in respect of any amounts paid to the Holders by the Guarantor under this Guarantee Agreement and shall have the right to waive payment by PECO Energy Capital pursuant to Section 2.01; provided, however, that the Guarantor shall not (except to the extent required by mandatory provisions of law) exercise any rights which it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of a payment under this Guarantee Agreement, if, at the time of any such payment, any amounts remain due and unpaid under this Guarantee Agreement. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to pay over such amount to the Holders. SECTION 2.07. The Guarantor acknowledges that its obligations hereunder are independent of the obligations of PECO Energy Capital with respect to the Series B Preferred Securities and that the Guarantor shall be liable as principal and sole debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence of any event referred to in subsections (a) through (f), inclusive, of Section 2.03 hereof. ARTICLE III SECTION 3.01. So long as any Series B Preferred Securities remain outstanding, neither the Guarantor nor any majority-owned subsidiary of the Guarantor shall declare or pay any dividend on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock (other than dividends by a wholly owned subsidiary) if at such time the Guarantor shall be in default with respect to its payment or other obligations hereunder or there shall have occurred any event that, with the giving of notice or the lapse of time 4 shall take all actions necessary to ensure the compliance of its subsidiaries with this Section 3.01. SECTION 3.02. So long as any Series B Preferred Securities are outstanding, the Guarantor agrees to maintain its corporate existence; provided that the Guarantor may consolidate with or merge with or into, or sell, convey, transfer or lease all or substantially all of its assets (either in one transaction or a series of transactions) to, any person, corporation, partnership, limited liability company, joint venture association, joint stock company, trust or unincorporated association if such entity formed by or surviving such consolidation or merger or to which such sale, conveyance, transfer or lease shall have been made, if other than the Guarantor, (i) is organized and existing under the laws of the United States of America or any state thereof or the District of Columbia, and (ii) shall expressly assume all the obligations of the Guarantor under this Guarantee Agreement. SECTION 3.03. This Guarantee Agreement will constitute an unsecured obligation of the Guarantor and will rank subordinate and junior in right of payment to all general liabilities of the Guarantor. ARTICLE IV This Guarantee Agreement shall terminate and be of no further force and effect upon full payment of the Redemption Price of all Series B Preferred Securities or upon full payment of the amounts payable to the Holders upon liquidation of PECO Energy Capital; provided, however, that this Guarantee Agreement shall continue to be effective or shall be reinstated, as the case may be, if at any time the Holders must restore payments of any sums paid under the Series B Preferred Securities or under this Guarantee Agreement for any reason whatsoever. ARTICLE V SECTION 5.01. All guarantees and agreements contained in this Guarantee Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders. Except as provided in Section 3.02, the Guarantor may not assign its obligations hereunder without the prior approval of the Holders of not less than 66 2/3% of the aggregate stated liquidation preference of all Series B Preferred Securities then outstanding. SECTION 5.02. This Guarantee Agreement may only be amended by a written instrument executed by the Guarantor; provided that, so long as any of the Series B Preferred Securities remain outstanding, any amendment that [materially] adversely affects the Holders, any termination of this Guarantee Agreement and any waiver of compliance with any covenant hereunder shall be effected only with the prior approval of the holders of Preferred Trust Receipts representing not less than 66 2/3% of the aggregate liquidation preference of all Series B Preferred Securities then outstanding. SECTION 5.03. All notices, requests or other communications required or permitted to be given hereunder to the Guarantor shall be deemed given if in writing and delivered personally or by recognized overnight courier or express mail service or by facsimile transmission (confirmed in writing) or by registered or certified mail (return receipt requested), addressed to the Guarantor at the following address (or at such other address as shall be specified by like notice to the Holders): PECO Energy Company 2301 Market Street P.O. Box 8699 Philadelphia, Pennsylvania 19101 Facsimile No.: (215) 841-5743 Attention: Treasurer 5 given hereunder to the Holders shall be deemed given if in writing and delivered by the Guarantor in the same manner as notices sent by PECO Energy Capital to the Holders. SECTION 5.04. This Guarantee Agreement is solely for the benefit of the Holders and is not separately transferable from the Series B Preferred Securities. SECTION 5.05. This Guarantee Agreement shall be governed by and construed and interpreted in accordance with the laws of the Commonwealth of Pennsylvania without giving effect to the conflict of law principles thereof. THIS GUARANTEE AGREEMENT is executed as of the day and year first above written. PECO ENERGY COMPANY By: Name: Title: EX-21 8 PECO ENERGY CO. SUB. AND STATE OF INCORPORATION 1 PECO ENERGY COMPANY SUBSIDIARIES AND STATE OF INCORPORATION PECO Energy Power Company (Pennsylvania) Susquehanna Power Company (Maryland) Susquehanna Electric Company (Maryland) Adwin Equipment Company (Pennsylvania) Adwin Investment Company (Pennsylvania) Adwin Realty Company (Pennsylvania) Eastern Pennsylvania Development Company (Pennsylvania) Eastern Pennsylvania Exploration Company (Pennsylvania) Energy Performance Services, Inc. (Pennsylvania) PECO Energy Capital Corp. (Delaware) PECO Gas Supply Company (Pennsylvania) The Proprietors of the Susquehanna Canal (Inactive) (Maryland)
EX-23.1 9 CONSENT OF INDEPENDENT ACCOUNTANTS 1 EXHIBIT 23-1 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the inclusion in this registration statement on Form S-4, with respect to the offer to exchange Trust Receipts for up to 5,400,000 depositary shares each representing a one-fourth interest in a share of $7.96 Cumulative Preferred Stock, of our report dated January 30, 1995, on our audits of the consolidated financial statements and financial statement schedule of PECO Energy Company. We also consent to the reference to our firm under the caption "Experts." COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania June 30, 1995 EX-24 10 POWERS OF ATTORNEY 1 PECO ENERGY COMPANY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS That I, SUSAN W. CATHERWOOD of BRYN MAWR, PA, do hereby appoint J. F. PAQUETTE, JR., C. A. MC NEILL, JR., and K. G. LAWRENCE, or either of them, attorney for me and in my name and on my behalf to sign the Registration Statement, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933, in connection with the registration of the securities of this Company, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: May 22, 1995 /s/ SUSAN W. CATHERWOOD Susan W. Catherwood
2 PECO ENERGY COMPANY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS That I, M. WALTER D'ALESSIO of PHILADELPHIA, PA, do hereby appoint J. F. PAQUETTE, JR., C. A. MC NEILL, JR., and K. G. LAWRENCE, or either of them, attorney for me and in my name and on my behalf to sign the Registration Statement, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933, in connection with the registration of the securities of this Company, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: May 22, 1995 /s/ M. WALTER D'ALESSIO M. Walter D'Alessio 3 PECO ENERGY COMPANY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS That I, RICHARD G. GILMORE of SARASOTA, FL, do hereby appoint J. F. PAQUETTE, JR., C. A. MC NEILL, JR., and K. G. LAWRENCE, or either of them, attorney for me and in my name and on my behalf to sign the Registration Statement, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933, in connection with the registration of the securities of this Company, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: May 22, 1995 /s/ RICHARD G. GILMORE Richard G. Gilmore 4 PECO ENERGY COMPANY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS That I, RICHARD H. GLANTON of PHILADELPHIA, PA, do hereby appoint J. F. PAQUETTE, JR., C. A. MC NEILL, JR., and K. G. LAWRENCE, or either of them, attorney for me and in my name and on my behalf to sign the Registration Statement, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933, in connection with the registration of the securities of this Company, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: May 22, 1995 /s/ RICHARD H. GLANTON Richard H. Glanton 5 PECO ENERGY COMPANY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS That I, JAMES A. HAGEN of VILLANOVA, PA, do hereby appoint J. F. PAQUETTE, JR., C. A. MC NEILL, JR., and K. G. LAWRENCE, or either of them, attorney for me and in my name and on my behalf to sign the Registration Statement, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933, in connection with the registration of the securities of this Company, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: May 22, 1995 /s/ JAMES A. HAGEN James A. Hagen 6 PECO ENERGY COMPANY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS That I, NELSON G. HARRIS of LAFAYETTE HILL, PA, do hereby appoint J. F. PAQUETTE, JR., C. A. MC NEILL, JR., and K. G. LAWRENCE, or either of them, attorney for me and in my name and on my behalf to sign the Registration Statement, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933, in connection with the registration of the securities of this Company, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: May 22, 1995 /s/ NELSON G. HARRIS Nelson G. Harris 7 PECO ENERGY COMPANY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS That I, JOSEPH C. LADD of ROSEMONT, PA, do hereby appoint J. F. PAQUETTE, JR., C. A. MC NEILL, JR., and K. G. LAWRENCE, or either of them, attorney for me and in my name and on my behalf to sign the Registration Statement, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933, in connection with the registration of the securities of this Company, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: May 22, 1995 /s/ JOSEPH C. LADD Joseph C. Ladd 8 PECO ENERGY COMPANY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS That I, EDITHE J. LEVIT of PHILADELPHIA, PA, do hereby appoint J. F. PAQUETTE, JR., C. A. MC NEILL, JR., and K. G. LAWRENCE, or either of them, attorney for me and in my name and on my behalf to sign the Registration Statement, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933, in connection with the registration of the securities of this Company, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: May 22, 1995 /s/ EDITHE J. LEVIT Edithe J. Levit 9 PECO ENERGY COMPANY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS That I, KINNAIRD R. MCKEE of OXFORD, MD, do hereby appoint J. F. PAQUETTE, JR., C. A. MC NEILL, JR., and K. G. LAWRENCE, or either of them, attorney for me and in my name and on my behalf to sign the Registration Statement, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933, in connection with the registration of the securities of this Company, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: May 22, 1995 /s/ KINNAIRD R. MC KEE Kinnaird R. McKee 10 PECO ENERGY COMPANY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS That I, JOSEPH J. MCLAUGHLIN of ROSEMONT, PA, do hereby appoint J. F. PAQUETTE, JR., C. A. MC NEILL, JR., and K. G. LAWRENCE, or either of them, attorney for me and in my name and on my behalf to sign the Registration Statement, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933, in connection with the registration of the securities of this Company, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: May 22, 1995 /s/ JOSEPH J. MC LAUGHLIN Joseph J. McLaughlin 11 PECO ENERGY COMPANY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS That I, DR. JOHN M. PALMS of COLUMBIA, SC, do hereby appoint J. F. PAQUETTE, JR., C. A. MC NEILL, JR., and K. G. LAWRENCE, or either of them, attorney for me and in my name and on my behalf to sign the Registration Statement, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933, in connection with the registration of the securities of this Company, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: May 22, 1995 /s/ JOHN M. PALMS (L.S.) Dr. John M. Palms 12 PECO ENERGY COMPANY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS That I, RONALD RUBIN of NARBERTH, PA, do hereby appoint J. F. PAQUETTE, JR., C. A. MC NEILL, JR., and K. G. LAWRENCE, or either of them, attorney for me and in my name and on my behalf to sign the Registration Statement, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933, in connection with the registration of the securities of this Company, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: May 22, 1995 /s/ RONALD RUBIN Ronald Rubin 13 PECO ENERGY COMPANY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS That I, ROBERT SUBIN of BLUE BELL, PA, do hereby appoint J. F. PAQUETTE, JR., C. A. MC NEILL, JR., and K. G. LAWRENCE, or either of them, attorney for me and in my name and on my behalf to sign the Registration Statement, and any amendments thereto, of PECO ENERGY COMPANY to be filed with the Securities and Exchange Commission under the Securities Act of 1933, in connection with the registration of the securities of this Company, and generally to do and perform all things necessary to be done in the premises as fully and effectually in all respects as I could do if personally present. Dated: May 22, 1995 /s/ ROBERT SUBIN Robert Subin EX-25 11 STATEMENT OF ELIGIBILITY UNDER TRUST INDENTURE ACT 1 EXHIBIT 25 =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE _________________________________ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ____ MERIDIAN TRUST COMPANY --------------------------------------------------- (Exact name of Trustee as specified in its charter) Pennsylvania 23-2332649 - ------------------------------ ------------------- (jurisdiction of incorporation (I.R.S. Employer of organization if not a U.S. Identification No.) national bank) 35 North Sixth Street Reading, Pennsylvania 19601 - --------------------- ----------- (Address of principal (Zip Code) executive offices) Michael G. Ruppel 35 North Sixth Street Reading, PA 19601 (610)655-3151 --------------------------------------------------------- (Name, address and telephone number of agent for service) PECO ENERGY COMPANY --------------------------------------------------- (Exact name of obligor as specified in its charter) Pennsylvania 23-0970240 - -------------------------------- ------------------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 2301 Market Street Philadelphia, Pennsylvania 19101 - -------------------------- ----------- (Address of principal (Zip Code) executive offices) DEBT SECURITIES ----------------------------------- (Title of the indenture securities) =============================================================================== 2 Item 1. General Information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. Federal Reserve Bank (3rd District), Ten Independence Mall, Philadelphia, Pennsylvania 19105. Department of Banking, Commonwealth of Pennsylvania, 333 Market Street, Harrisburg, Pennsylvania 17120. (b) Whether it is authorized to exercise corporate trust powers. The Trustee is authorized to exercise corporate trust powers. Item 2. Affiliations with Obligor. If the Obligor is an affiliate of the Trustee, describe each such affiliation. The Obligor is not an affiliate of the Trustee (or any of its affiliates, including Meridian Bancorp, Inc.). Item 3. Voting Securities of the Trustee. Furnish the following information as to each class of voting securities of the Trustee:
As of June 15, 1995 - ------------------------------------------------------------------------------------------------------------ Col. A Col. B Title of class Amount outstanding *Common Capital Stock - Par Value $1.00 *300,000 Shares - ------------------------------------------------------------------------------------------------------------
* All voting securities of the Trustee are owned by Meridian Asset Management, Inc., a Pennsylvania business corporation, all of whose voting securities are owned by Meridian Bancorp, Inc., a Pennsylvania business corporation. Item 4. Trusteeship under Other Indentures. If the Trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the Obligor are outstanding, furnish the following information: (a) Title of the securities outstanding under each such other indenture.* -2- 3
Indenture Security Amount --------- -------- ------ Indenture, dated 9% Deferrable Interest $228,092,784 as of July 1, 1994 Subordinated Debentures, Series A
* There are currently outstanding under this indenture $228,092,784 aggregate principal amount of 9% Deferrable Interest Subordinated Debentures, Series A. (b) A brief statement of the facts relied upon as a basis for the claim that no conflicting interest within the meaning of Section 310(b)(1) of the Act arises as a result of the trusteeship under any such other indenture, including a statement as to how the indenture securities will rank as compared with the securities issued under such other indenture. No conflicting interest within the meaning of Section 310(b)(1) of the Act arises because there is currently no event of default in existence under this indenture or the indenture described in Item 4(a) above, this indenture is supplemental to the indenture described in Item 4(a) above and the securities issuable under this indenture and the indenture described in Item 4(a) above (and all securities issuable thereunder) are wholly unsecured and rank equally. Item 5. Interlocking Directorates and Similar Relationships with the Obligor or Underwriters. If the Trustee or any of the directors or executive officers of the Trustee is a director, officer, partner, employee, appointee, or representative of the Obligor or of any Underwriter for the Obligor, identify each such person having any such connection and state the nature of each such connection. Mr. Joseph F. Paquette, Jr. is Chairman of the Board and a director of the Obligor and a director of Meridian Bancorp, Inc., the parent corporation of the Trustee. (See Note on page 8.) Item 6. Voting Securities of the Trustee Owned by the Obligor or its Officials. Furnish the following information as to the voting securities of the Trustee owned beneficially by the Obligor and each director, partner and executive officer of the Obligor:
As of June 15, 1995 - ----------------------------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D Percentage of voting securities represented Amount owned by amount given in Name of owner Title of class beneficially Col. C * * * * - -----------------------------------------------------------------------------------------------------
* The amount of voting securities of the Trustee (or any of its affiliates, including Meridian Bancorp, Inc.) owned beneficially by the Obligor and its directors, partners and executive officers, taken as a -3- 4 group, does not exceed one percent of the outstanding voting securities of the Trustee (or any of its affiliates, including Meridian Bancorp, Inc.). (See Note on page 8.) Item 7. Voting Securities of the Trustee Owned by Underwriters or their Officials. Furnish the following information as to the voting securities of the Trustee owned beneficially by each Underwriter for the Obligor and each director, partner and executive officer of each such Underwriter:
As of June 15, 1995 - ------------------------------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D Percentage of voting securities represented Amount owned by amount given in Name of owner Title of class beneficially Col. C * * * * - -------------------------------------------------------------------------------------------------------
* The amount of voting securities of the Trustee (or any of its affiliates, including Meridian Bancorp, Inc.) owned beneficially by each Underwriter for the Obligor and its directors, partners and executive officers, taken as a group, does not exceed one percent of the outstanding voting securities of the Trustee (or any of its affiliates, including Meridian Bancorp, Inc.). (See Note on page 8.) Item 8. Securities of the Obligor Owned or Held by the Trustee. Furnish the following information as to securities of the Obligor owned beneficially or held as collateral security for obligations in default by the Trustee:
As of June 15, 1995 - ----------------------------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D Amount owned beneficially or held Whether the securities as collateral security Percent of class are voting or non- for obligations in represented by amount Title of class voting securities default given in Col. C * * * * - -----------------------------------------------------------------------------------------------------
* The Trustee (or any of its affiliates, including Meridian Bancorp, Inc.) does not own beneficially or hold as collateral security for obligations in default more than one percent of any class of outstanding securities of the Obligor. (See Note on page 8.) Item 9. Securities of Underwriters Owned or Held by the Trustee. If the Trustee owns beneficially or holds as collateral security for obligations in default any securities of an Underwriter for the -4- 5 Obligor, furnish the following information as to each class of securities of such Underwriter any of which are so owned or held by the Trustee:
As of June 15, 1995 - ------------------------------------------------------------------------------------------------------ Col. A Col. B Col. C Col. D Amount owned beneficially or held as collateral security Percent of class Title of issuer and for obligations in represented by amount title of class Amount outstanding default by Trustee given in Col. C * * * * - ------------------------------------------------------------------------------------------------------
* The Trustee (or any of its affiliates, including Meridian Bancorp, Inc.) does not own beneficially or hold as collateral security for obligations in default more than one percent of any class of any securities of an Underwriter for the Obligor. (See Note on page 8.) Item 10. Ownership or Holdings by the Trustee of Voting Securities of Certain Affiliates or Security Holders of the Obligor. If the Trustee owns beneficially or holds as collateral security for obligations in default voting securities of a person who, to the knowledge of the Trustee (1) owns 10 percent or more of the voting securities of the Obligor or (2) is an affiliate, other than a subsidiary, of the Obligor, furnish the following information as to the voting securities of such person:
As of June 15, 1995 - ----------------------------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D Amount owned beneficially or held as collateral security Percent of class Title of issuer and for obligations in represented by amount title of class Amount outstanding default by Trustee given in Col. C * * * * - -----------------------------------------------------------------------------------------------------
* The Trustee (or any of its affiliates, including Meridian Bancorp, Inc.) does not own beneficially or hold as collateral security for obligations in default more than one percent of the voting securities of any person who, to the knowledge of the Trustee (or any of its affiliates, including Meridian Bancorp, Inc.), (1) owns 10 percent or more of the voting securities of the Obligor or (2) is an affiliate, other than a subsidiary, of the Obligor. (See Note on page 8.) Item 11. Ownership or Holdings by the Trustee of any Securities of a Person owning 50 Percent or More of the Voting Securities of the Obligor. If the Trustee owns beneficially or holds as collateral security for obligations in default any securities of a person who, to the knowledge -5- 6 of the Trustee, owns 50 percent or more of the voting securities of the Obligor, furnish the following information as to each class of securities of such person any of which are so owned or held by the Trustee: As of June 15, 1995
- ---------------------------------------------------------------------------------------------------- Col. A Col. B Col. C Col. D Amount owned beneficially or held as collateral security Percent of class Title of issuer and for obligations in represented by amount title of class Amount outstanding default by Trustee given in Col. C * * * * - ----------------------------------------------------------------------------------------------------
* The Trustee (or any of its affiliates, including Meridian Bancorp, Inc.) does not own beneficially or hold as collateral security for obligations in default more than one percent of any securities of a person who, to the knowledge of the Trustee (or any of its affiliates, including Meridian Bancorp, Inc.), owns 50 percent or more of the voting securities of the Obligor. (See Note on page 8.) Item 12. Indebtedness of the Obligor to the Trustee. Except as noted on the instructions, if the Obligor is indebted to the Trustee, furnish the following information: As of June 15, 1995
- ---------------------------------------------------------------------------------------------- Col. A Col. B Col. C Nature of indebtedness Amount outstanding Date due $10,000 Letter of Credit $10,000 June 30, 1995 - ----------------------------------------------------------------------------------------------
Meridian Bank, an affiliate of the Trustee, has established the foregoing letter of credit totaling $10,000, which may be drawn upon by the Obligor. As of June 15, 1995, there was $10,000 outstanding on this letter of credit. Item 13. Defaults by the Obligor. (a) State whether there is or has been a default with respect to the securities under this indenture. Explain the nature of any such default. There is not nor has there been a default with respect to the securities under this indenture. (See Note on page 8.) (b) If the Trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the Obligor are -6- 7 outstanding, or is trustee for more than one outstanding series of securities under the indenture, state whether there has been a default under any such indenture or series, identify the indenture or series affected, and explain the nature of any such default. There has not been a default under the indenture described in Item 4(a) above or under any outstanding securities under this indenture. (See Note on page 8.) Item 14. Affiliations with the Underwriters. If any Underwriter is an affiliate of the Trustee, describe each such affiliation. No Underwriter for the Obligor is an affiliate of the Trustee. (See Note on page 8.) Item 15. Foreign Trustee. Identify the order or rule pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act. Not applicable. Item 16. List of Exhibits. List below all exhibits filed as part of this statement of eligibility and qualification. 1. A copy of the articles of incorporation of the Trustee as now in effect (incorporated by reference to Exhibit 1 to Form T-1 filed in Form S-3 Registration Statement of The Bell Telephone Company of Pennsylvania (Reg. No. 33- 43712)). 2. Certificate of authority of the Trustee to commence business (incorporated by reference to Exhibit 2 to Form T-1 filed in Form S-3 Registration Statement of The Bell Telephone Company of Pennsylvania (Reg. No. 33-43712)). 3. Authorization of the Trustee to exercise corporate trust powers (incorporated by reference to Exhibit 3 to Form T-1 filed in Form S-3 Registration Statement of The Bell Telephone Company of Pennsylvania (Reg. No. 33-43712)). 4. A copy of the existing by-laws of the Trustee (incorporated by reference to Exhibit 4 to Form T-1 filed in Form S-3 Registration Statement of The Bell Telephone Company of Pennsylvania (Reg. No. 33-43712)). 5. A copy of the indenture referred to in Item 4, if the Obligor is in default. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act. 7. A copy of the latest report of condition of the Trustee as of the close of business on March 31, 1995, published pursuant -7- 8 to law or the requirement of its supervising or examining authority. NOTE Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base responsive answers to Items 5, 6, 7, 8, 9, 10, 11, 13 and 14, the answers to said Items are based on incomplete information. Items 5, 6, 7, 8, 9, 10, 11, 13 and 14 may, however, be considered correct unless amended by an amendment to this Form T-1. In answering any items in this Statement of Eligibility that related to matters peculiarly within the knowledge of the Obligor, or its directors or officers, or an Underwriter for the Obligor (Items 5, 6, 7, 8, 9, 10, 11 and 13 particularly), the Trustee has relied upon information furnished to it by the Obligor and such Underwriter and the Trustee disclaims responsibility for the accuracy or completeness of such information. -8- 9 SIGNATURE Pursuant to the requirement of the Trust Indenture Act of 1939, the Trustee, Meridian Trust Company, a corporation organized and existing under the laws of the Commonwealth of Pennsylvania, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Reading and the Commonwealth of Pennsylvania, on the 30th day of June, 1995. MERIDIAN TRUST COMPANY By:/s/ Michael G. Ruppel ------------------------------------ Name: Michael G. Ruppel Title: Relationship Officer 10 EXHIBIT 6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of 1939 and in connection with the proposed issuance of PECO Energy Company Debt Securities, we hereby consent that reports of examinations by federal, state, territorial, or district authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. MERIDIAN TRUST COMPANY By:/s/ Michael G. Ruppel ------------------------------------ Name: Michael G. Ruppel Title: Relationship Officer Dated: June 30, 1995 11 EXHIBIT T-1-6 SCHEDULE RC - BALANCE SHEET FROM REPORT OF CONDITION Consolidating domestic and foreign subsidiaries of MERIDIAN TRUST COMPANY of MALVERN in the state of PENNSYLVANIA at the close of business on March 31, 1995 filed in response to call made by Comptroller of the Currency, under title 12, United States Code, Section 161 Charter Number 540 Comptroller of the Currency Northeastern District SCHEDULE RC -- BALANCE SHEET
Thousands of Dollars ----------- ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin(1)(2) . . . . . . . . . . . . $ 5 Interest-Bearing Balances(3) . . . . . . . . . . . . . . . . . . . . . . . . . . 480 Securities Held-to-maturity securities (from Schedule RC-B, column A) . . . . . . . . . . . 705 Available-for-sale securities (from Schedule RC-B, column D) . . . . . . . . . . 0 Federal funds sold and securities purchased under agreements to resell: Federal funds sold(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 Securities purchased under agreements to resell(4) . . . . . . . . . . . . . . . 0 Loans and lease financing receivables: Loans and leases, net of unearned income (from Schedule RC-C) $134 LESS: Allowance for loan and lease losses 0 LESS: Allocated transfer risk reserve 0 ------ Loans and leases, net of unearned income, allowance and reserve (item 4.a minus 4.b and 4.c) . . . . . . . . . . . . . 134 Trading assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 Premises and fixed assets (including capitalized leases) . . . . . . . . . . . . . . . . . 1,005 Other real estate owned (from Schedule RC-M) . . . . . . . . . . . . . . . . . . . . . . . 0 Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) . . . . . . . . . . . . . . . . . . . 0 Customers' liability to this bank on acceptances outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 Intangible assets (from Schedule RC-M) . . . . . . . . . . . . . . . . . . . . . . . . . . 0 Other assets (from Schedule RC-F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,463 ------------ Total Assets (sum of items 1 through 11) . . . . . . . . . . . . . . . . . . . $ 8,792 ============ Losses deferred pursuant to 12 U.S.C. 1823(j) . . . . . . . . . . . . . . . . . 0 Total assets and losses deferred pursuant to 12 U.S.C. 1823(j) (sum of items 12.a and 12.b) . . . . . . . . . . . . . . . . . . . . . . . 8,792
(1) Includes cash items in process of collection and unposted debits. (2) The amount reported in this item must be greater than or equal to the sum of Schedule RC-M, items 3.a and 3.b. (3) Includes time certificates of deposit not held for trading. (4) Report "term federal funds sold" in Schedule RC, item 4.a "Loans and leases, net of unearned income," and in Schedule RC-C, part 1. (5) Report securities purchased under agreements to resell that involve the receipt of immediately available funds and mature in one business day or roll over under a continuing contract in Schedule RC, item 3.a, "Federal funds sold." 12 Schedule RC -- Continued
LIABILITIES Deposits: In domestic offices (sum of totals of columns A and C from Schedule RC-E) .................................. 0 Noninterest-bearing(1) ............................................................................ $ 0 Interest-bearing .................................................................................. 0 In foreign offices, Edge and Agreement subsidiaries, and IBFs ................................................. Noninterest-bearing ....................................................................................... Interest-bearing .......................................................................................... Federal funds purchased and securities sold under agreements to repurchase: Federal funds purchased (2) ................................................................................ 0 Securities sold under agreements to repurchase(3) .......................................................... 0 Demand notes issued to U.S. Treasury ....................................................................... 0 Trading liabilities ........................................................................................ 0 Other borrowed money With original maturity of one year or less ................................................................. 0 With original maturity of more than one year ............................................................... 0 Mortgage indebtedness and obligations under capitalized leases ................................................ 0 Bank's liability on acceptances executed and outstanding ...................................................... 0 Subordinated notes and debentures ............................................................................. 0 Other liabilities (from Schedule RC-G) ........................................................................ 5,225 Total liabilities (sum of items 13 through 20) ................................................................ 5,225 Limited-life preferred stock and related surplus .............................................................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus ................................................................. 0 Common Stock ................................................................................................. 300 Surplus (exclude all surplus related to preferred stock) ...................................................... 478 Undivided profits and capital reserves ..................................................................... 2,789 Net unrealized holding gains (losses) on available-for-sale securities ..................................... 0 Cumulative foreign currency translation adjustments ........................................................... Total equity capital (sum of items 23 through 27) .......................................................... 3,567 Losses deferred pursuant to 12 U.S.C. 1823(j) .............................................................. 0 Total equity capital and losses deferred pursuant to 12 U.S.C. 1823(j) (sum of items 28.a and 28.b) .................................................................................................. 3,567 Total liabilities, limited-life preferred stock, equity capital, and losses deferred pursuant to 12 U.S.C. 1823(j) (sum of items 21, 22, and 28.c) ............................................................. 8,792 Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by independent external Number auditors as of any date during 1994 ....................................................................... 2
1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank 2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4 = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 5 = Review of the bank's financial statements by external auditors 6 = Compilation of the bank's financial statements by external auditors 7 = Other audit procedures (excluding tax preparation work) 8 = No external audit work - -------------- (1) Includes total demand deposits and noninterest-bearing time and saving deposits. (2) Report "term federal funds purchased" in Schedule RC, item 16, "Other borrowed money." (3) Report securities sold under agreements to repurchase that involve the receipt of immediately available funds and mature in one business day or roll over under a continuing contract in Schedule RC, item 14.a, "Federal funds purchased." EX-99.1 12 LETTER OF TRANSMITTAL 1 Exhibit 99-1 LETTER OF TRANSMITTAL To Tender Depositary Shares (the "Depositary Shares") each representing a 1/4 share interest in a share of $7.96 Cumulative Preferred Stock of PECO ENERGY COMPANY Pursuant to the offer by PECO ENERGY COMPANY to exchange Trust Receipts each representing a ____% Cumulative Monthly Income Preferred Security, Series B ("Series B Preferred Securities") of PECO Energy Capital, L.P., for up to 5,400,000 Depositary Shares This Letter of Transmittal relates to the offer by PECO Energy Company ("PECO Energy") to effect the exchange of Trust Receipts (the "Preferred Trust Receipts"), each representing a __% Cumulative Monthly Income Preferred Security, Series B (the "Series B Preferred Securities") of PECO Energy Capital, L.P. ("PECO Energy Capital"). The exchange of Preferred Trust Receipts for Depositary Shares will be effected by (a) the tendering of the Depositary Shares to FIRST CHICAGO TRUST COMPANY OF NEW YORK (the "Exchange Agent"), (b) the delivery by PECO Energy of its __% Deferrable Interest Subordinated Debentures, Series B (the "Series B Subordinated Debentures") to the Exchange Agent, which will receive the Series B Subordinated Debentures on behalf of the holders ("Holders") of Depositary Shares validly tendered and accepted, in exchange for the Depositary Shares, (c) the delivery by the Exchange Agent (acting pursuant to the directions of the holders of the Depositary Shares) of the Series B to PECO Energy Capital in consideration for the issuance and deposit by PECO Energy Capital of the Series B Preferred Securities with PECO Energy Capital Trust I (the "Trust") under a Trust Agreement, and (d) the issuance and delivery by the Trust of the Preferred Trust Receipts to the Exchange Agent for distribution, either in certificated form or through the facilities of a depository, to each holder. The offer is for up to 5,400,000 Depositary Shares, unless reduced by PECO Energy in its sole discretion. If more than 5,400,000 or Depositary Shares are validly tendered, acceptance of Depositary Shares of each tendering holder will be pro rated. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON _____, 1995, UNLESS THE OFFER IS EXTENDED. 2 The Exchange Agent for the Offer is: FIRST CHICAGO TRUST COMPANY OF NEW YORK By Hand or Overnight Courier: First Chicago Trust Company of New York Tenders & Exchanges 14 Wall Street 8th Floor, Suite 4680-PECO New York, New York 10005 By Mail: (Registered or Certified Mail Recommended) First Chicago Trust Company of New York Tenders & Exchanges Suite 4660-PECO P.O. Box 2559 Jersey City, New Jersey 07303-2559 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE OFFERING CIRCULAR/PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO GEORGESON & COMPANY INC., THE INFORMATION AGENT FOR THE EXCHANGE OFFER, AT WALL STREET PLAZA, NEW YORK, NEW YORK 10005, TELEPHONE (800) 223-2064 (TOLL-FREE) OR (212) 440-9800 (COLLECT). ---------------- This Letter of Transmittal is to be completed by holders of Depositary Shares, (i) if certificates for Depositary Shares are to be forwarded herewith; (ii) unless an Agent's Message (as defined in the accompanying Offering Circular/Prospectus of PECO Energy and PECO Energy Capital dated ________, 1995 (the "Offering Circular/Prospectus")) is utilized, if tenders of Depositary Shares are to be made by book-entry transfer into the account of the Exchange Agent at The Depository Trust Company ("DTC") pursuant to the procedures described under "The Offer-Procedures for Tendering" in the Offering Circular/Prospectus; (iii) if tenders of Depositary Shares are to be made by book-entry transfer into the account of First Chicago Trust Company of New York, as Exchange Agent (the "Exchange Agent") at Philadelphia Depository Trust Company or Midwest Securities Trust Company (collectively with DTC, the "Depositories" and each individually, a "Depository")' or (iv) holders of Depositary Shares who tender shares by book-entry transfer are referred to herein as "Book-Entry Shareholders." Any holder of Depositary Shares who submits this Letter of Transmittal and tenders Depositary Shares in accordance with the instructions contained herein prior to the Expiration Date (as defined in the Offering Circular/Prospectus) will thereby have directed the Exchange Agent to deliver the Series B Subordinated Debentures to PECO Energy Capital which will deposit the Series B Preferred Securities in the Trust with PNC Bank, Delaware, as Trustee, which will issue the Preferred Trust Receipts to such Holder, all as set forth in the Offering Circular/Prospectus. Tenders of Depositary Shares pursuant to this Letter of Transmittal are subject to withdrawal as described in the Offering Circular/Prospectus under the caption "The Offer--Withdrawal of Tenders". 2 3 DESCRIPTION OF DEPOSITARY SHARES TENDERED - --------------------------------------------------------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF DEPOSITARY SHARES TENDERED REGISTERED HOLDER(S) (ATTACH ADDITIONAL LIST IF (PLEASE FILL IN, IF BLANK) NECESSARY) - --------------------------------------------------------------------------------------------------------------------------------- TOTAL NUMBER OF NUMBER OF DEPOSITARY DEPOSITARY CERTIFICATE SHARES REPRESENTED SHARES NUMBER(S)* BY CERTIFICATE(S)* TENDERED** - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- TOTAL SHARES - ---------------------------------------------------------------------------------------------------------------------------------
* Need not be completed by Holders tendering by book-entry transfer. ** Unless otherwise indicated, the holder will be deemed to have tendered the full number of Depositary Shares represented by the tendered certificates. See Instruction 4. / / CHECK HERE IF TENDERED DEPOSITARY SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT A DEPOSITORY AND COMPLETE THE FOLLOWING: Name of Tendering Institution ------------------------------- Account No. ------------------------------------------------- Transaction Code No. ---------------------------------------- / / CHECK HERE IF TENDERED DEPOSITARY SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name(s) of Tendering Shareholder(s) ------------------------- Date of Execution of Notice of Guaranteed Delivery ----------------------------------------- Name of Institution which Guaranteed Delivery ----------------------------------------- 3 4 If delivery by book-entry transfer: Name of Tendering Institution ----------------------------- Account No. ------------------------------------------------- Transaction Code No. -------------------------------------- ------------ SOLICITED TENDERS (SEE INSTRUCTION 11) PECO Energy will pay to any Soliciting Dealer, as defined in Instruction 11, a solicitation fee of $0.__ per Depositary Share validly tendered and accepted for exchange pursuant to the Offer (as herein defined). The undersigned represents that the Soliciting Dealer which solicited and obtained this tender is: Name of Firm: --------------------------------------------------- (Please Print) Name of Individual Broker or Financial Consultant: -------------- - ---------------------------------------------------------------- Identification Number (if known): ------------------------------- Address: -------------------------------------------------------- - ---------------------------------------------------------------- (Include Zip Code) The acceptance of compensation by such Soliciting Dealer will constitute a representation by it that: (i) it has complied with the applicable requirements of the Securities Exchange Act of 1934 and the applicable rules and regulations thereunder in connection with such solicitations; (ii) it is entitled to such compensation for such solicitation under the terms and conditions of the Offer; (iii) in soliciting tenders of Depositary Shares, it has used no soliciting materials other than those furnished by PECO Energy and PECO Energy Capital; and (iv) if it is a foreign broker or dealer not eligible for membership in the National Association of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's Rules of Fair Practice in making solicitations outside the United States to the same extent as though it were an NASD member. If tendered Depositary Shares are being delivered by book-entry transfer made to an account maintained by the Exchange Agent with a Depository, the Soliciting Dealer must return a Notice of Solicited Tenders to the Exchange Agent to receive a solicitation fee. SOLICITING DEALERS ARE NOT ENTITLED TO A SOLICITATION FEE FOR DEPOSITARY SHARES BENEFICIALLY OWNED BY SUCH SOLICITING DEALER. 4 5 NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY First Chicago Trust Company of New York: Pursuant to the offer by PECO Energy Company ("PECO Energy"), the undersigned hereby tenders to PECO Energy each of the above-described Depositary Shares, each representing a one-fourth (l/4) share interest in PECO Energy's $7.96 Cumulative Preferred Stock, $100 liquidation preference, in exchange for trust receipts (the "Preferred Trust Receipts"), issued by PECO Energy Capital Trust I (the "Trust") with PNC Bank, Delaware, as Trustee, (the "Trustee") each representing a ___% Cumulative Monthly Income Preferred Security, Series B (the "Series B Preferred Securities") of PECO Energy Capital, L.P. ("PECO Energy Capital") on the basis of one Preferred Trust Receipt for each Depositary Share validly tendered and accepted. PECO Energy offers to effect exchange of Preferred Trust Receipts for up to 5,400,000 Depositary Shares (the "Exchange"), upon the terms and subject to the conditions set forth in the Offering Circular/Prospectus, receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, together with the Offering Circular/Prospectus, constitute the "Offer"). Depositary Shares not accepted for exchange because of proration or for any other reason will be returned. The Preferred Trust Receipts will be issued in either book-entry form through the facilities of a Depository or in certificated form, depending on whether the Depositary Shares are tendered in certificated form or by book-entry transfer. Distributions, redemption price and stated liquidation preference on the Series B Preferred Securities, and ultimately the Preferred Trust Receipts, will be paid from corresponding payments on ___% Deferrable Interest Subordinated Debentures, Series B (the "Series B Subordinated Debentures") issued by PECO Energy in consideration for the issuance and deposit by PECO Energy Capital of the Series B Preferred Securities. The mechanics of the Exchange actually involve a simultaneous two-step process. In step one, the undersigned, as holder of the Depositary Shares, exchanges the Depositary Shares for the Series B Subordinated Debentures of PECO Energy. In step two, the undersigned directs the Exchange Agent to deliver the Series B Subordinated Debentures to PECO Energy Capital upon issuance and deposit by PECO Energy Capital of the Series B Preferred Securities the Trust and the issuance by the Trustee of Preferred Trust Receipts to the undersigned. Though the mechanics of the Exchange involve the undersigned receiving Series B Subordinated Debentures and exchanging Series B Subordinated Debentures for the Preferred Trust Receipts, the Exchange will appear to the undersigned as a one-step transaction where the Depositary Shares are exchanged directly for the Preferred Trust Receipts. The two-step process will be effected simultaneously by use of the Exchange Agent as described in the next paragraph. The undersigned acknowledges that it has no right to retain Series B Subordinated Debentures. Subject to and effective upon acceptance for exchange of the Depositary Shares tendered herewith, the undersigned hereby sells, assigns and transfers to or upon the order of PECO Energy, all right, title and interest in and to all the Depositary Shares that are being tendered hereby and appoints the Exchange Agent the true and lawful agent and attorney-in-fact of the undersigned with respect to such Depositary Shares, with full power of substitution (such power of attorney, being deemed to be an irrevocable power coupled with an interest), to (a) accept depositary receipts for such Depositary Shares or assign or transfer ownership of such Depositary Shares on the account books maintained by the Depository which holds the Depositary Shares, together, in any such case, with all accompanying evidences of transfer and authenticity, for deposit by the Depository into the account of 5 6 the Exchange Agent, (b) present such Depositary Shares for transfer on the books of PECO Energy, (c) accept the Series B Subordinated Debentures from PECO Energy in exchange for the Depositary Shares, (d) deliver the Series B Subordinated Debentures to PECO Energy Capital, (e) deposit the Preferred Trust Receipts into the account of the undersigned, or issue certificates for Preferred Trust Receipts and (f) receive all benefits and otherwise exercise all rights of beneficial ownership of such Depositary Shares, all in accordance with the terms of the Offer. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, assign and transfer the Depositary Shares tendered hereby and to acquire Preferred Trust Receipts issuable upon the exchange of such tendered Depositary Shares and that, when the undersigned's Depositary Shares are accepted for exchange, PECO Energy will acquire good and unencumbered title to such tendered Depositary Shares, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim. The undersigned will, upon request, execute and deliver any additional documents deemed by PECO Energy Capital to be necessary or desirable to complete the exchange, assignment and transfer of tendered Depositary Shares or transfer ownership of such Depositary Shares. All authority herein conferred or agreed to be conferred shall survive the death, bankruptcy or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, legal representatives, successors, assigns, executors and administrators of the undersigned. Except as stated in the Offer, this tender is irrevocable. The undersigned understands that tenders of Depositary Shares pursuant to any one of the procedures described in "The Offer Procedures for Tendering" of the Offering Circular/Prospectus and in the instructions hereto will constitute agreements between the undersigned and PECO Energy Capital upon the terms and subject to the conditions of the Offer. Unless otherwise indicated under "Special Exchange Instructions", please cause Preferred Trust Receipts to be issued to me in certificated form or by crediting the account of the undersigned at the Depository which held my Depositary Shares, and return any Depositary Shares not tendered or not accepted for exchange, in the name(s) of the undersigned (and, in the case of Depositary Shares tendered by book-entry transfer, by credit to the account at the Depository where my Depositary Shares were held). Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail any certificates for Depositary Shares not tendered or not accepted for exchange (and accompanying documents, as appropriate), to the undersigned at the address shown below the undersigned's signature(s). If both "Special Exchange Instructions" and "Special Delivery Instructions" are completed, please cause the Preferred Trust Receipts to be issued, and return any Depositary Shares not tendered or not accepted for exchange, in the name(s) of, and deliver any certificates for such Depositary Shares to, the person(s) so indicated. 6 7 SPECIAL EXCHANGE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5 AND 7) To be completed ONLY if certificates representing Preferred To be completed ONLY if certificates for Depositary Trust Receipts are to be issued, or certificates for Depositary Shares not tendered or not accepted for exchange, are Shares not tendered or not accepted for exchange are to be to be mailed to someone other than the undersigned, or issued, in the name of someone other than the undersigned. to the undersigned at an address other than that shown below the undersigned's signature(s). Issue / / certificates for Depositary Shares to: Mail / / certificates for Depositary Shares to: Issue / / certificates for Preferred Trust Receipts in name of: Name --------------------------- (Please Print) Name ---------------------------------- ------------------------------- (Please Print) Address -------------------------------------- ------------------------ Address ------------------------------- ------------------------------- (Zip Code) -------------------------------------- (Zip Code) -------------------------------------- (Taxpayer Identification No.)
7 8 SIGN HERE (PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Signature(s) of Owner(s) Dated , 1995 -------------------------------------------------------------- Name(s) ------------------------------------------------------------------ ------------------------------------------------------------------------- (Please Print) Capacity (full title) ---------------------------------------------------- Address ------------------------------------------------------------------ ------------------------------------------------------------------------- (Include Zip Code) Area Code and Telephone No. ---------------------------------------------- (Must be signed by registered holder(s) exactly as name(s) appear(s) on certificate(s) for Depositary Shares or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.) GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) Authorized Signature ---------------------------------------------------- Name -------------------------------------------------------------------- Title ------------------------------------------------------------------- Address ----------------------------------------------------------------- Name of Firm ------------------------------------------------------------ Area Code and Telephone Number ------------------------------------------ Dated , 1995 -------------------------------------------------------------- 8 9 PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK Name(s) as shown above on certificate(s) for Depositary Shares (if joint ownership, list first and circle the name of the person or entity whose number you enter in Part I below). Address (if holder does not complete, signature in Part III below will constitute a certification that the address on the reverse hereof is correct). City, State, and Zip Code Part I - PLEASE PROVIDE YOUR TIN IN Social Security Number THE BOX AT RIGHT AND CERTIFY BY OR Substitute SIGNING AND DATING BELOW -------------------- Form W-9 Employer Identification Number Department of the Treasury TIN Applied for / / Internal Revenue Service Payer's Request for Part II - Taxpayer For Payees exempt from backup Identification withholding, write "Exempt" here. Number (TIN)
Part III - Certification. Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and (2) I am not subject to backup withholding because (a) I am exempt from backup withholding, (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. Certification Instructions. You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of under reporting interest or dividends on your tax return. However, if you have been notified by the IRS that you are no longer subject to backup withholding, do not cross item (2). SIGNATURE DATE ---------------------------- ------------------------------ 9 10 YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART I OF SUBSTITUTE FORM W-9 CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and either (a) I have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer Identification Number within 60 days, thirty-one (31) percent of all reportable payments made to me will be withheld until I provide a properly certified Taxpayer Identification Number to the Exchange Agent. ------------------------------------------- ------------------------ Signature Date INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER I. GUARANTEE OF SIGNATURES No signature guarantee is required on this Letter of Transmittal (i) if tendered Depositary Shares are registered in the name(s) of the undersigned and the Preferred Trust Receipts to be issued in exchange therefor are to be issued (and any Depositary Shares not tendered or not accepted for exchange are to be returned) in the name of the registered holder(s) (which term, for the purposes described herein, shall include any participant in a Depository whose name appears on a security listing as the owner of Depositary Shares) and (ii) such holder(s) have not completed the instruction entitled "Special Exchange Instructions" or "Special Delivery Instructions" on this Letter of Transmittal. If the tendered Depositary Shares are registered in the name(s) of someone other than the undersigned or if the Preferred Trust Receipts to be issued in exchange therefor are to be issued (or Depositary Shares not tendered or not accepted for exchange are to be returned) in the name of any other person, such tendered Depositary Shares must be endorsed or accompanied by written instruments of transfer in form satisfactory to the Exchange Agent and duly executed by the registered holder, and the signature on the endorsement or instrument of transfer must be guaranteed by a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program or the Stock Exchange Medallion Program (any of the foregoing hereinafter referred to as an "Eligible Institution"). See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND DEPOSITARY SHARES. Depositary receipts for all physically delivered Depositary Shares, or confirmation of any book-entry transfer to the Exchange Agent's account at a Depository of Depositary Shares tendered by book-entry transfer (a "Book-Entry Confirmation"), as well as (i) a properly completed and duly executed copy of this Letter of Transmittal, and any other documents required by this Letter of Transmittal, or (2) an Agent's Message in connection with a book-entry transfer, must be received by the Exchange Agent at either of the addresses set forth herein prior to the Expiration Date. If a holder of Depositary Shares desires to participate in the Offer and time will not permit this Letter of Transmittal or Depositary Shares to reach the Exchange Agent before the Expiration Date or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected if the Exchange Agent has received at its office prior to the Expiration Date, a 10 11 Notice of Guaranteed Delivery from an Eligible Institution setting forth the name and address of the tendering Holder, the name(s) in which the Depositary Shares are registered and, if the Depositary Shares are held in certificated form, the certificate numbers of the Depositary Shares to be tendered, and stating that the tender is being made thereby and guaranteeing that within three New York Stock Exchange, Inc. ("NYSE") trading days after the date of execution of such Notice of Guaranteed Delivery by the Eligible Institution, the Depositary Shares in proper form for transfer together with a properly completed and duly executed Letter of Transmittal (and any other required documents), or a confirmation of book-entry transfer of such Depositary Shares into the Exchange Agent's account at the applicable Depository, along with a Letter of Transmittal (and any other required documents) or, in the case of DTC, an Agent's Message, will be delivered by such Eligible Institution. Unless the Depositary Shares being tendered by the above-described method are deposited with the Exchange Agent within the time period set forth above or a confirmation of book entry transfer of such Depositary Shares into the Exchange Agent's account at a Depository in accordance with such Depository's procedures (accompanied or preceded by a properly completed Letter of Transmittal and any other required documents), or in accordance with DTC's Automated Tender Offer Program ("ATOP") procedures (along with an Agent's message), is received, PECO Energy Capital may, at its option, reject the tender. The method of delivery of Depositary Shares and all other required documents, including delivery through a Depository, is at the option and risk of the tendering shareholder. If certificates for Depositary Shares are sent by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery. No alternative, conditional or contingent tenders will be accepted, and no fractional Depositary Shares will be accepted for exchange. By executing this Letter of Transmittal, the tendering holder waives any right to receive any notice of the acceptance of the Depositary Shares for exchange. 3. INADEQUATE SPACE. If the space provided herein is inadequate, the certificate numbers and/or the number of Depositary Shares should be listed on a separate signed schedule attached hereto. 4. PARTIAL TENDERS. (Not applicable to Book-Entry Shareholders). If fewer than all the Depositary Shares represented by any certificate delivered to the Exchange Agent are to be tendered, fill in the number of Depositary Shares which are to be tendered in the box entitled "Number of Shares Tendered." In such case, a new certificate for the remainder of the Depositary Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the appropriate box on this Letter of Transmittal, as promptly as practicable following the Expiration Date. All Depositary Shares represented by certificates delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. 5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder(s) of the Depositary Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates without alteration enlargement or any change whatsoever. 11 12 If any of the Depositary Shares tendered hereby are held of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the Depositary Shares tendered hereby are registered in different names on different certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. If this Letter of Transmittal is signed by the registered holder(s) of the Depositary Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless Preferred Trust Receipts issued in exchange therefor are to be issued, or Depositary Shares not tendered or not exchanged are to be returned, in the name of any person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Depositary Shares tendered hereby, certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Depositary Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Exchange Agent of the authority of such person so to act must be submitted. 6. STOCK TRANSFER TAXES. PECO Energy will pay all stock transfer taxes, if any, applicable to the exchange of any Depositary Shares pursuant to the Offer. If, however, Depositary Shares not tendered or accepted for exchange are to be issued in the name of any person other than the registered holder of the Depositary Shares tendered or if a transfer tax is imposed for any reason other than the exchange of Depositary Shares pursuant to the Offer, then the amount of any such transfer taxes (whether imposed on the registered holder or any other Persons) will be payable by the holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. 7. SPECIAL EXCHANGE AND DELIVERY INSTRUCTIONS. If any Depositary Shares not tendered or not accepted for exchange are to be issued or to be returned to, a person other than the person(s) signing this Letter of Transmittal or certificates for Depositary Shares not tendered or not accepted for exchange are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal at an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. 8. SUBSTITUTE FORM W-9. Under the federal income tax laws, the Exchange Agent may be required to withhold 31% of the amount of any payments made to certain shareholders pursuant to the Offer. In order to avoid such backup withholding, each 12 13 tendering shareholder, and, if applicable, each other payee, must provide such shareholder's or payee's correct taxpayer identification number and certify that such holder of Depositary Shares or payee is not subject to such backup withholding by completing the Substitute Form W-9 set forth above. In general, if a holder of Depositary Shares or payee is an individual, the taxpayer identification number is the Social Security number of such individual. Certain holders of Depositary Shares or payees (including, among others, all corporations and certain foreign individual(s) are not subject to these backup withholding and reporting requirements. In order to satisfy the Exchange Agent that a foreign individual qualifies as an exempt recipient, such holder of Depositary Shares or payee must submit a statement, signed under penalties of perjury, attesting to that individual's exempt status. Such statements can be obtained from the Exchange Agent. For further information concerning backup withholding and instructions for completing the Substitute Form W-9 (including how to obtain a taxpayer identification number if you do not have one and how to complete the Substitute Form W-9 if Shares are held in more than one name), consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. 9. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by PECO Energy Capital from time to time in accordance with, and subject to the limitations described in, the Offering Circular/Prospectus, provided that acceptance of Depositary Shares validly tendered in the Offer is subject to the condition that as of the Expiration Date there be at least 400 record or beneficial holders of Preferred Trust Receipts to be issued in exchange of such Depositary Shares, which condition may not be waived. 10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance or additional copies of the Offering Circular/Prospectus and this Letter of Transmittal may be obtained from the Information Agent at its telephone number set forth below. 11. SOLICITED TENDERS. PECO Energy will pay to a Soliciting Dealer (as defined herein) a solicitation fee of $0.__ per Depositary Share validly tendered and accepted for exchange pursuant to the Offer. For purposes of this Instruction 11, "Soliciting Dealer" includes (i) any broker or dealer in securities, including the Dealer Manager in its capacity as a dealer or broker, who is a member of any national securities exchange or of the National Association of Securities Dealers, Inc. (the "NASD"), (ii) any foreign broker or dealer not eligible for membership in the NASD who agrees to conform to the NASD's Rules of Fair Practice in soliciting tenders outside the United States to the same extent as though it were an NASD member, or (iii) any bank or trust company, any one of whom has solicited and obtained a tender pursuant to the Offer. No Solicitation Fee shall be payable to a Soliciting Dealer with respect to the tender of Depositary Shares by a holder unless the Letter of Transmittal accompanying such tender designates such Soliciting Dealer as such in the box captioned "Solicited Tenders". If tendered Depositary Shares are being delivered by book-entry transfer made to an account maintained by the Exchange Agent with a Depository, the Soliciting Dealer must return a Notice of Solicited Tenders to the Exchange Agent within three New York Stock Exchange trading days after the Expiration Date in order to receive a Solicitation Fee. No Solicitation Fee shall be payable to a Soliciting Dealer in respect of Depositary Shares (i) beneficially owned by such Soliciting Dealer or (ii) registered in the name of 13 14 such Soliciting Dealer unless such Depositary Shares are held by such Soliciting Dealer as nominee and such Depositary Shares are being tendered for the benefit of one or more beneficial owners identified on the Letter of Transmittal or the Notice of Solicited Tenders. No Solicitation Fee shall be payable to the Soliciting Dealer with respect to the tender of Depositary Shares by the holder of record, for the benefit of the beneficial owner, unless the beneficial owner has designated such Soliciting Dealer. 14 15 The Information Agent for the Offer is: Georgeson & Company Inc. Wall Street Plaza New York, New York 10005 Banks and Brokers Call Collect: (212)440-9800 All Others Call Toll-Free:(800) 223-2064 The Dealer Manager for the Offer is: MERRILL LYNCH & CO. World Financial Center 250 Vesey Street North Tower New York, New York 10281-1201 (212) 449-4913 July __, 1995 15 EX-99.2 13 NOTICE OF GUARANTEED DELIVERY 1 Exhibit 99-2 NOTICE OF GUARANTEED DELIVERY This form, or a form substantially equivalent to this form, must be used to accept the Offer (as defined below) if (i) Depositary Shares each representing a one-fourth (1/4) interest in PECO Energy Company ("PECO Energy") $7.96 Cumulative Preferred Stock (the "Depositary Shares") cannot be delivered to the Exchange Agent by the Expiration Date (as defined in the Offering Circular/Prospectus of PECO Energy and PECO Energy Capital, L.P. dated ____ __, 1995 (the "Offering Circular/Prospectus")), (ii) the procedure for book-entry transfer of Depositary Shares (as set out in the Offering Circular/Prospectus) cannot be completed by the Expiration Date or (iii) the Letter of Transmittal or Agent's Message and all other required documents cannot be delivered to the Exchange Agent prior to the Expiration Date. This form, properly completed and duly executed, may be delivered by hand or facsimile transmission or mail to the Exchange Agent. See the Offering Circular/Prospectus. TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, EXCHANGE AGENT By Hand or Overnight By Mail: Courier: (registered or certified mail recommended) First Chicago Trust Company of New York First Chicago Trust Company of New Tenders & Exchanges York 14 Wall Street Tenders & Exchanges 8th Floor, Suite 4680 - PECO Suite 4660 - PECO New York, New York 10005 P.O. Box 2559 Jersey City, NJ 07303-2559 By Facsimile Transmission: Confirm Receipt of Notice (For Eligible Institutions Only) of Guaranteed Delivery by Telephone: (201) 222-4270 or 4721 (201) 222-4707
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. 2 Ladies and Gentlemen: The undersigned hereby tenders to PECO Energy Company upon the terms and conditions set forth in the Offering Circular/Prospectus dated July __, 1995 and the related Letter of Transmittal (which constitute the "Offer"), receipt of which is hereby acknowledged, the number of Depositary Shares set forth below, pursuant to the guaranteed delivery procedure set forth in the Offering Circular/Prospectus. Number of shares of Depositary SIGN HERE Preferred tendered: ---------------------------------- Certificate Nos. (if available) ---------------------------------- ----------------------------------- (Signature(s)) ----------------------------------- ----------------------------------- (Name(s)) (Please Print) If Depositary Shares will be ----------------------------------- tendered by book-entry transfer: (Address) ----------------------------------- Name of Tendering Institution: (Zip Code) ---- ----------------------------------- ----------------------------------- ----------------------------------- (Area Code and Telephone No.) Account No. ------------------------
GUARANTEE (Not to be used for signature guarantee) The undersigned, a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office branch or agency in the United States, guarantees (a) that the above named-person(s) own(s) the Depositary Shares "tendered" hereby as such term is defined within Rule 14e-4 under the Securities Exchange Act of 1934, as amended, (b) that such tender of Depositary Shares complies with Rule 14e-4 and (c) to deliver to the Exchange Agent either the Depositary Shares tendered hereby, in proper form for transfer, or confirmation of the book-entry transfer of the Depositary Shares tendered hereby into the account of the Exchange Agent at The Depository Trust Company ("DTC"), Midwest Securities Trust Company or Philadelphia Depository Trust Company, in each case together with a properly completed and duly executed Letter(s) of Transmittal (or facsimile(s) thereof, with any required signature guarantees (or in the case of DTC, an 2 3 Agent's Message (as defined in the Offering Circular/Prospectus)) and any other required documents within three New York Stock Exchange trade days after the date of execution of this Notice. -------------------------------------- (Name of Firm) -------------------------------------- (Authorized Signature) -------------------------------------- (Name) -------------------------------------- (Address) -------------------------------------- (Zip Code) -------------------------------------- (Area Code and Telephone No.) Dated: --------------------------
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. 3 EX-99.3 14 OFFER TO EXCHANGE PREFERRED TRUST RECEIPTS 1 Exhibit 99-3 PECO ENERGY COMPANY OFFER TO EXCHANGE PREFERRED TRUST RECEIPTS EACH REPRESENTING A ___% CUMULATIVE MONTHLY INCOME PREFERRED SECURITY, SERIES B OF PECO ENERGY CAPITAL, L.P. (stated liquidation preference $25 per Preferred Security) FOR UP TO 5,400,000 OUTSTANDING DEPOSITARY SHARES EACH REPRESENTING A 1/4 INTEREST IN A SHARE OF $7.96 CUMULATIVE PREFERRED STOCK OF PECO ENERGY COMPANY July __, 1995 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees We have been appointed by PECO Energy Company, a Pennsylvania corporation ("PECO Energy") and PECO Energy Capital, L.P., a Delaware limited partnership ("PECO Energy Capital"), to act as Dealer Manager in connection with the offer by PECO Energy to exchange, upon the terms and subject to the conditions set forth in the Offering Circular/Prospectus referred to below and the related Letter of Transmittal (which together constitute the "Offer"), Trust Receipts (the "Preferred Trust Receipts"), each representing a ____% Cumulative Monthly Income Preferred Security, Series B ("Series B Preferred Securities"), representing a limited partner interest issued by PECO Energy Capital, L.P., for up to 5,400,000 of outstanding Depositary Shares, each representing a one-fourth (1/4) interest in PECO Energy's $7.96 Cumulative Preferred Stock (the "Depositary Shares"), that are validly tendered and accepted for exchange pursuant to the Offer. In connection with the Offer, PECO Energy will deposit with PECO Energy Capital as partnership assets its ____% Deferrable Interest Subordinated Debentures, Series B, due 2025 as set forth in the Offering Circular/Prospectus referred to below. Pursuant to the Offer, exchanges will be made on the basis of one Preferred Trust Receipt for each Depositary Share validly tendered and accepted for exchange in the Offer. Depositary Shares not accepted for exchange because of proration or any other reason will be returned. The Exchange Agent, on behalf of PECO Energy, will accept for exchange all Depositary Shares validly tendered and not withdrawn, up to 5,400,000 shares (or, if decreased as described in the Offering Circular/Prospectus, such lesser number as PECO Energy may elect to exchange pursuant to the Offer), upon the terms and subject to the conditions of the Offer, including 2 the provisions thereof relating to proration described in the Offering Circular/Prospectus dated July __, 1995 (the "Offering Circular/Prospectus"). PECO Energy will upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and necessary costs and expenses incurred by them in forwarding materials to their customers. PECO Energy will pay all stock transfer taxes applicable to the acceptance of Depositary Shares pursuant to the Offer, subject to Instruction 6 of the Letter of Transmittal. Soliciting Dealers should take care to ensure proper record-keeping to document their entitlement to any solicitation fee. Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from, the Information Agent or the undersigned at the addresses and telephone numbers set forth in the back cover of the Offering Circular/Prospectus. For your information and for forwarding to your clients for whom you hold Depositary Shares registered in your name or in the name of your nominee, we are enclosing the following documents: 1. Offering/Circular Prospectus dated July __, 1995; 2. Letter of Transmittal for your use and for the information of your clients, together with GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 providing information relating to backup federal income tax withholding; 3. Notice of Guaranteed Delivery to be used to accept the Offer if the Depositary Shares and all other required documents cannot be delivered to the Exchange Agent by the Expiration Date (as defined in the Offering/Circular Prospectus), or the book-entry transfer of the Depositary Shares cannot be completed by the Expiration Date; 4. A form of letter that may be sent to your clients of whose accounts you hold Depositary Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions and designation of Soliciting Dealer with regard to the Offer; and 5. Return envelope addressed to FIRST CHICAGO TRUST COMPANY OF NEW YORK, the Exchange Agent. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON _____, 1995, UNLESS THE OFFER IS EXTENDED. NO RECOMMENDATION TO HOLDERS OF DEPOSITARY SHARES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING IN THE OFFER IS MADE BY PECO ENERGY, THE BOARD OF DIRECTORS OF PECO ENERGY, PECO ENERGY CAPITAL OR ITS GENERAL 2 3 PARTNER. HOLDERS OF DEPOSITARY SHARES ARE URGED TO CONSULT THEIR FINANCIAL AND TAX ADVISERS IN MAKING THEIR DECISIONS ON WHAT ACTION TO TAKE IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES. PECO Energy will pay a solicitation fee of $____ per Depositary Share (the "Solicitation Fee") for any Depositary Shares tendered by physically delivering depositary receipts which are accepted for exchange and exchanged pursuant to the Offer and covered by a Letter of Transmittal which designates, as having solicited and obtained the tender, the name of (i) any broker or dealer in securities, including the Dealer Manager in its capacity as a broker or dealer, which is a member of any national securities exchange or of the National Association of Securities Dealers, Inc. (the "NASD"), (ii) any foreign broker or dealer not eligible for membership in the NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting tenders outside the United States to the same extent as though it were an NASD member, or (iii) any bank or trust company (each of which is referred to herein as a "Soliciting Dealer"). No Solicitation Fee shall be payable to a Soliciting Dealer with respect to the tender of depositary receipts evidencing Depositary Shares by a holder unless the Letter of Transmittal accompanying such tender designates such Soliciting Dealer as such in the box captioned "Solicited Tenders". If tendered Depositary Shares are being delivered by book-entry transfer made to an account maintained by the Exchange Agent with DTC, the Soliciting Dealer must return a Notice of Solicited Tenders to the Exchange Agent within three New York Stock Exchange trading days after the Expiration Date in order to receive a Solicitation Fee. No Solicitation Fee shall be payable to a Soliciting Dealer in respect of Depositary Shares (i) beneficially owned by such Soliciting Dealer or (ii) registered in the name of such Soliciting Dealer unless such Depositary Shares are held by such Soliciting Dealer as nominee and such Depositary Shares are being tendered for the benefit of one or more beneficial owners identified on the Letter of Transmittal or the Notice of Solicited Tenders. No Solicitation Fee shall be payable to the Soliciting Dealer with respect to the tender of Depositary Shares by the holder of record, for the benefit of the beneficial owner, unless the beneficial owner has designated such Soliciting Dealer. No Solicitation Fee shall be payable to a Soliciting Dealer if such Soliciting Dealer is required for any reason to transfer any portion of such fee to a tendering holder (other than itself). No broker, dealer, bank, trust company or fiduciary shall be deemed to be the agent of PECO Energy, the Exchange Agent, the Information Agent or the Dealer Manager for purposes of the Offer. Very truly yours, Merrill Lynch & Co. 3 4 NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE AGENT OF PECO ENERGY, PECO ENERGY CAPITAL, THE GENERAL PARTNER OF PECO ENERGY CAPITAL, THE DEALER MANAGER, THE INFORMATION AGENT OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. 4 5 NOTICE OF SOLICITED TENDERS Listed below are the number of Depositary Shares whose tender you have solicited. All Depositary Shares beneficially owned by a beneficial owner, whether in one account or several, and in however many capacities, must be aggregated for purposes of completing the tables below. Any questions as to what constitutes beneficial ownership should be directed to the Exchange Agent. If the space below is inadequate, list the Depositary Shares in a separate signed schedule and affix the list to this Notice of Solicited Tenders. Please do not complete the sections of the table headed "TO BE COMPLETED ONLY BY EXCHANGE AGENT." ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO THE EXCHANGE AGENT AT THE ADDRESS SET FORTH ON THE BACK COVER OF THE OFFERING CIRCULAR/PROSPECTUS. ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO THE INFORMATION AGENT AT THE TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THE OFFERING CIRCULAR/PROSPECTUS. SOLICITED TENDERS OF DEPOSITARY SHARES NOT BENEFICIALLY OWNED BY SOLICITING DEALER
TO BE COMPLETED TO BE COMPLETED TO BE COMPLETED TO BE COMPLETED BY THE SOLICITING BY THE SOLICITING ONLY BY ONLY BY DEALER DEALER EXCHANGE AGENT EXCHANGE AGENT ----------------- ----------------- --------------- --------------- NUMBER OF SHARES NUMBER OF SHARES FEE BENEFICIAL OWNERS TENDERED VOI TICKET NUMBER* ACCEPTED $0.__ PER SHARE ----------------- ---------------- ------------------ --------------- --------------- Beneficial Owner No. 1 . . . ---------- ---------- ---------- ---------- Beneficial Owner No. 2 . . . ---------- ---------- ---------- ---------- Beneficial Owner No. 3 . . . ---------- ---------- ---------- ---------- Beneficial Owner No. 4 . . . ---------- ---------- ---------- ---------- Beneficial Owner No. 5 . . . ---------- ---------- ---------- ---------- Total . . . . . . . . ---------- ---------- ---------- ----------
- ------------------- * Complete if Depositary Shares delivered by book-entry transfer. All questions as to the validity, form and eligibility (including time of receipt) of Notices of Solicited Tenders will be determined by the Exchange Agent, in its sole discretion, which determination will be final and binding. Neither the Exchange Agent nor any other person will be under any duty to give notification of any defects or irregularities in any Notice of Solicited Tenders or incur any liability for failure to give such notification. The undersigned hereby confirms that: (i) it has complied with the applicable requirements of the Securities Exchange Act of 1934, and the 6 applicable rules and regulations thereunder, in connection with such solicitation; (ii) it is entitled to such compensation for such solicitation under the terms and conditions of the Offering Circular/Prospectus; (iii) in soliciting tenders of Depositary Shares, it has used no soliciting materials other than those furnished by PECO Energy or PECO Energy Capital; and (iv) if it is a foreign broker or dealer not eligible for membership in the NASD, it has agreed to conform to the NASD's Rules of Fair Practice in making solicitations outside the United States to the same extent as though it were an NASD member. - --------------------------- ------------------------------ Printed Firm Name Address ------------------------------ City, State and Zip Code - --------------------------- ------------------------------ Authorized Signature Area Code and Telephone Number
2 EX-99.5 15 DEPOSITARY AGREEMENT EXCHANGE OFFER 1 Exhibit 99-5 DEPOSITARY AGREEMENT EXCHANGE OFFER July __, 1995 If by mail: First Chicago Trust Company of New York Tenders & Exchanges P. O. Box 2507 - Suite 4660 Jersey City, NJ 07303-2507 Attn: If by hand or overnight delivery: First Chicago Trust Company of New York Tenders & Exchanges 14 Wall Street - Suite 4680, 8th Floor New York, NY 10005 Attn: Ladies and Gentlemen: PECO Energy Company ("PECO Energy") is offering to effect the exchange of Trust Receipts ("Preferred Trust Receipts"), each representing a ____% Cumulative Monthly Income Preferred Security, Series B representing a limited partner interest issued by PECO Energy Capital, L.P. ("PECO Energy Capital") for up to 5,400,000 Depositary Shares (the "Depositary Shares") each representing a one-fourth interest in a share of $7.96 Cumulative Preferred Stock of PECO Energy, upon the terms and conditions set forth in the Offering Circular/Prospectus and the Letter of Transmittal annexed as Exhibit A and B, respectively (collectively, the "Offering Documents"). PECO Energy hereby appoints you to act as Exchange Agent in connection with the offer, as described in the Offering Documents (the "Offer"). The Offer is being made by PECO Energy to holders of 5,600,000 Depositary Shares commencing on or about _______________, 1995. The Letter of Transmittal that will accompany the Offering Circular/Prospectus is to be used by the holders of Depositary Shares to accept the Offer, and contains instructions with respect to the delivery of certificates or book-entry transfer for Depositary Shares tendered. 2 First Chicago Trust Company of New York July ___, 1995 Page 2 In carrying out your duties as Exchange Agent in connection with the Offer, you are to act in accordance with the following: 1. The Offer shall expire at 12:00 midnight, New York time on _______________, 1995 (the "Initial Expiration Date"), or at any subsequent time to which PECO Energy may extend the Offer. PECO Energy expressly reserves the right to extend the Offer from time-to-time. The Offer may be extended by PECO Energy giving written notice to you before _______________, 1995. The later of the Initial Expiration Date or the latest time and date to which the Offer may be so extended is herein referred to as the "Expiration Date." 2. You will establish a Book Entry Account with DTC and the various other Depositories (as defined in the Offering Documents) for the Depositary Shares for purposes of the Offer by _______________, 1995 and any financial institution that is a participant in any of the Depositories may make book-entry delivery of the Depositary Shares by causing the Depository to transfer such Depositary Shares into the account maintained by you pursuant to this Paragraph in accordance with procedures for such transfer. However, although delivery of the Depositary Shares may be effected through book-entry transfer, the Letter of Transmittal, or in the case of book-entry transfer through DTC, an Agent's Message, with any required signature guarantees and any other documents must, in any case, be received by you in order for Depositary Shares to be properly tendered. 3. You are to examine the Letters of Transmittal, Agent's Messages (as defined in the Offering Documents), certificates representing the Depositary Shares and the other documents delivered or mailed to you in connection with the Offer to ascertain whether they are completed and executed in accordance with instructions set forth in the Letter of Transmittal. In each case where the Letter of Transmittal has been improperly filled out or executed or, for any other reason, is not in proper form, or the certificates for Depositary Shares or the book-entry confirmations, as the case may be, accompanying such Letter of Transmittal are not in proper form for transfer (as required by the aforesaid instructions), or if 3 First Chicago Trust Company of New York July ___, 1995 Page 3 some other irregularity in connection with any tender of Depositary Shares exists, you shall endeavor to take such action as may be necessary to cause such irregularity to be corrected. With the written approval of an Officer of PECO Energy, or any party designated by PECO Energy, you are authorized to waive irregularities in connection with the acceptance of the Offer. PECO Energy has reserved the absolute right to reject any or all offers which it determines do not comply with the terms of the Offer, which determination shall be final and binding. Unless waived by PECO Energy, all Depositary Shares must be tendered in accordance with the terms and conditions set forth in the Offering Documents. 4. If a shareholder desires to tender Depositary Shares pursuant to the Offer and such shareholder's certificates for Depositary Shares are not immediately available or time will not permit all required documents to reach you on or prior to the Expiration Date or the procedure for book-entry tender cannot be completed on a timely basis, such Depositary Shares may nevertheless be tendered if all the following conditions are satisfied: (i) the tender is made by or through an Eligible Institution (as defined in the Offering Circular/Prospectus); (ii) a properly completed and duly executed Notice of Guaranteed Delivery is received by you as provided below on or prior to the Expiration Date; and (iii) the certificates for all tendered Depositary Shares, in proper form for transfer (or a book-entry confirmation), together with a properly completed and duly executed Letter of Transmittal or an Agent's Message, in the case of a book-entry transfer effected through DTC's Automated Tender Offer Program ("ATOP") and any other documents required by the Letter of Transmittal are received by you within three New York Stock Exchange ("NYSE") trading 4 First Chicago Trust Company of New York July ___, 1995 Page 4 days after the date of execution of the Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by letter, telegram, or facsimile transmission to you and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery. Notwithstanding any other provisions hereof, exchange for Depositary Shares exchanged pursuant to the Offer will, in all cases, be made only after timely receipt by you of certificates for such Shares (or a book-entry confirmation), a properly completed and duly executed Letter of Transmittal and any other documents required by the Letter of Transmittal or, in the case of a book-entry transfer through DTC's ATOP procedure, an Agent's Message. 5. On each business day up to the Expiration Date, you shall advise by telephone, not later than 5:00 P.M., New York City time, and on the Expiration Date, as promptly thereafter as may be practicable, Diann Sweeney of PECO Energy (215) 841-6996) and ___________________, of Merrill Lynch & Co. at (212) _______ and such other persons as Ms. Sweeney may direct, of the number of Depositary Shares which have been tendered, the number about which you have questions concerning validity, form, eligibility (including timeliness of receipt) and the cumulative number of Depositary Shares tendered through the time of such telephone call. Promptly thereafter (but no later than the close of the next day), you shall confirm such information to each of the above persons in writing, to be transmitted by facsimile. You shall take all responsible action with respect to the Offer as may from time to time be requested by PECO Energy. You are authorized to cooperate with and furnish information, including, without limitation, the names and addresses of registered holders of tendered Depositary Shares to Merrill Lynch & Co., Georgeson & Company Inc., any of their representatives or any other organization (or its representatives) designated from time to time by PECO Energy, in any manner reasonably requested by any of them in connection with the Offer and tenders thereunder. 5 First Chicago Trust Company of New York July ___, 1995 Page 5 6. Any Letters of Transmittal received after the Expiration Date shall be stamped by you as of the date and time of receipt thereof and preserved by you as permanent records until you are otherwise instructed by PECO Energy. 7. You shall follow and act upon any amendments, modifications or supplements to these instructions, and upon any further written instructions in connection with the Offer, any of which may be given to you by PECO Energy or such other persons as it may authorize. 8. PECO Energy will exchange shares duly tendered on the terms and subject to the conditions set forth in the Offering Documents. 9. PECO Energy shall deposit or cause to be deposited with you, as agent for tendering holders of the Depositary Shares, within a reasonable time after PECO Energy's acceptance for exchange of the Depositary Shares, the ___% Deferrable Interest Subordinated Debentures, Series B ("Series B Debentures") of PECO Energy, which are to be deposited by you with PECO Energy Capital in accordance with the instructions of PECO Energy and in exchange for Depositary Shares tendered and accepted for exchange. 10. As soon as practicable following acceptance of Depositary Shares tendered for exchange, you shall make payment in accordance with the terms of the Offer to any broker or dealer that is a member of the national securities exchange in the United States or of the National Association of Securities Dealers, Inc., or to any foreign broker or dealer not eligible for membership in such Association that agrees to conform to the Rules of Fair Practice of such Association in soliciting tenders in the United States, or to any commercial bank or trust company located in the United States whose name appears in the appropriate space in the Letter of Transmittal, subject to the conditions set forth in the Offering Documents, of a solicitation fee of __________ for each Depositary Share validly tendered for exchange. The payment is subject to a maximum solicitation fee of $__________ in respect of shares tendered by or on behalf of any shareholder that were owned of 6 First Chicago Trust Company of New York July ___, 1995 Page 6 record by such shareholder on the date the Offer is made. Federal funds will be deposited with you on the date checks are mailed. PECO Energy will wire funds to First National Bank of Chicago ABA #07100-0001-3 for the account of First Chicago Trust Company of New York Cash Funding Account #93-00007. A list of brokers, dealers and banks entitled to payment should be prepared by you detailing name, address, number of shares tendered and fee payable. You shall not make payment unless the aforesaid list (or adjusted list) is approved by PECO Energy. 11. Shares tendered pursuant to the Offer are irrevocable, except that shares tendered pursuant to the Offer may be withdrawn at any time prior to __________, 1995, and unless theretofore exchanged by PECO Energy, may also be withdrawn at any time after __________, 1995, if not accepted for exchange. 12. PECO Energy shall not be required to exchange any shares tendered if (i) the Exchange shall not result in at least 400 record or beneficial holders of Preferred Trust Receipts to be issued in exchange for such Depositary Shares (ii) fewer than 2,800,000 Depositary Shares are tendered for exchange or (iii) if any of the other conditions set forth in the Offering Documents are not satisfied. Notice of any decision by PECO Energy not to exchange any Depositary Shares tendered shall be given in writing by PECO Energy to you. 13. If, pursuant to the Offer, PECO Energy does not accept for exchange all or part of the shares tendered, you shall promptly return the deposited certificates for Depositary Shares, with any related required documents and the Letter of Transmittal relating thereto that are in your possession, to the persons who deposited the same, together with a notice explaining the reasons for their return. 14. Certificates for unexchanged or new Depositary Shares shall be forwarded by (i) first class mail under a blanket surety bond protecting you and 7 First Chicago Trust Company of New York July ___, 1995 Page 7 PECO Energy from loss or liability arising out of the non-receipt or non-delivery of such certificates for shares, or (ii) by registered mail insured separately for the replacement value of such certificates for Depositary Shares. 15. As Exchange Agent and Depository hereunder, you: (a) shall have no duties or obligations other than those specifically set forth herein; (b) will be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness of any certificates or the shares represented thereby deposited with you hereunder, and will not be required to and will make representation as to the validity, value or genuineness of the Offer; (c) shall not be obligated to take any legal action hereunder which might, in your judgement, involve any expense or liability, unless you shall have been furnished with such indemnity as shall be reasonably satisfactory to you; (d) may rely on and shall be protected in acting in reliance upon any certificate, instrument, opinion, notice, letter, telegram or other document or security delivered to you and believed by you to be genuine and to have been signed by the proper party or parties; (e) may rely on and shall be protected in acting upon written instructions from [ ] of PECO Energy; (f) may consult counsel satisfactory to you (including counsel for PECO Energy) and the opinion of each counsel shall be full and complete authorization and protection in respect to any action taken, suffered or omitted by you hereunder in good faith and in accordance with the opinion of such counsel; and (g) shall not be called upon at any time to advise any person tendering hereunder as to 8 First Chicago Trust Company of New York July ___, 1995 Page 8 the wisdom of making such tender or as to the market value or decline or appreciation in market value of any share. 16. You agree that upon receipt thereof you will deliver the Preferred Trust Receipts on a one for one basis for each Depositary Share validly tendered and accepted for exchange to the holders of such Depositary Shares. 17. PECO Energy covenants and agrees to indemnify and hold you harmless against any loss, liability or expense incurred on your part arising out of or in connection with the administration of your duties hereunder, including the cost and expenses of defending yourself against any claim or liability, provided, that such covenant and agreement does not extend to, and you shall not be indemnified with respect to, such costs, expenses, losses and damages incurred or suffered by you as a result of, or arising out of, your negligence, bad faith or willful failure to perform your obligations hereunder. Promptly after you have received any written assertion of a claim or have been served with summons or other first legal process giving information as to the nature and basis of the claim, you shall notify PECO Energy, by letter or by facsimile transmission confirmed by letter, of the written assertion of such claim against you or of any action commenced against you or of the service of any summons on you, or other first legal process giving information as to the nature and basis of the claim. In no case shall PECO Energy be liable under this indemnity with respect to any action, proceeding, suit or claim against you unless PECO Energy shall be notified by you as set forth in this Section 17, but failure so to notify PECO Energy shall not relieve PECO Energy of any liability which it may otherwise have on account of this Agreement. PECO Energy will be entitled to participate at its own expense in the defense of any such claim. If PECO Energy so elects at any time after receipt of such notices and agrees in writing that such claim is a claim for which you are entitled to be indemnified and held harmless hereunder or if you in such notice request and PECO Energy agrees, PECO Energy will assume the defense of any suit brought to 9 First Chicago Trust Company of New York July ___, 1995 Page 9 enforce any such claim. In the event PECO Energy assumes the defense of any such suit, PECO Energy may select counsel of its own choosing for such purpose and PECO Energy will not be liable for the fees and expenses of any additional counsel thereafter retained by you. PECO Energy shall not be liable for any settlement of any such claim effected without its prior written consent. 18. This agreement and appointment as Exchange Agent and Depository shall be construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such state, and shall inure to the benefit of, and the obligations created hereby shall be binding upon, the successors and assigns of the parties hereto. THIS AGREEMENT MAY NOT BE MODIFIED ORALLY. 19. You will arrange to comply with IRS regulations with regard to due diligence in obtaining a certified Tax Identification Number (TIN). We understand that you are required to deduct 31% on payments (a) to holders who have not supplied their correct TIN and the required certification and (b) to holders who you have been instructed by the IRS to deduct. You will forward appropriate funds to the IRS. On or before January 31, 1996, you will issue a Form 1099B to each holder of Depositary Shares whose Depositary Shares are tendered and accepted. You are further instructed as follows: U.S. Citizens: A substitute Form W-9 must be properly completed and delivered to you prior to payment, otherwise 31% of the gross payment must be deducted as described above. Foreign Shareholders: Form W-8 must be properly completed and delivered to you prior to payment, otherwise 31% of the gross payment must be deducted as described above. NOTE: YOU MAY CONSULT WITH (NAME) (TELEPHONE NUMBER), BEFORE MAKING THE REQUIRED DEDUCTION, IF YOU DEEM IT NECESSARY, FOR ANY CLARIFICATION, INTERPRETATION, ETC. 10 First Chicago Trust Company of New York July ___, 1995 Page 10 Should any issue arise regarding federal income tax reporting or withholding, you will take such action as PECO Energy instructs you in writing. 20. It is understood and agreed that the securities, money, assets or property (the "Property") to be deposited with or received by you from PECO Energy or pursuant to Section 9 and Section 16 hereof as Depositary constitute a special, segregated account, held solely for the benefit of PECO Energy and shareholders tendering Depositary Shares, as their interests may appear, and the Property shall not be commingled with the securities, money, assets or properties of you or any other person, firm, corporation or entity. You hereby waive any and all rights of lien, attachment or set-off whatsoever, if any, against the Property so to be deposited, whether such rights arise by reason of statutory or common law, by contract or otherwise. 21. For services rendered as Depository hereunder, you shall be entitled to a fee of $_______, together with other reasonable and customary expenses. 22. Unless terminated earlier by the parties hereto in writing, this Agreement shall terminate 30 days after expiration of the Offer, as may be extended by PECO Energy from time to time. Upon any termination of this Agreement, you shall promptly deliver to PECO Energy any certificates, funds or property then held by you as Depository under this Agreement, and after such time any party entitled to such certificates, funds or property shall look solely to PECO Energy and not the Depository therefore, and all liability of the Depository with respect thereto shall cease, provided, however, that the Depositary, before being required to make such delivery to PECO Energy, may at the expense of PECO Energy cause to be published in a newspaper of general circulation in the City of New York, or mail to each person who has tendered Depositary Shares but not received payment, or both, notice that such certificates, funds or property remain unclaimed and that after a date specified therein, which shall not be less than 30 days from the date of publication or mailing, any unclaimed balance of such certificates, funds or property will be delivered 11 First Chicago Trust Company of New York July ___, 1995 Page 11 to PECO Energy. 23. If any provision of this Agreement shall be held illegal, invalid or unenforceable by any court, this Agreement shall be construed and enforced as if such provision had not been contained herein and shall be deemed an agreement between us to the full extent permitted by applicable law. 24. This Agreement may be executed in separate counterparts, each of which when executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Please acknowledge receipt of this agreement and confirm the arrangements herein provided by signing and returning the enclosed copy. Sincerely, PECO ENERGY COMPANY By: --------------------------- Name: Title: ACCEPTED AS OF -------------------- FIRST CHICAGO TRUST COMPANY OF NEW YORK By: ------------------------------- Name: Title: EX-99.6 16 LETTER OF AGREEMENT 1 Exhibit 99-6 ________, 1995 PECO Energy Company P.O. Box 8699 Philadelphia, PA 19101 LETTER OF AGREEMENT This Letter of Agreement (the "Agreement") sets forth the terms and conditions under which Georgeson & Company, Inc. ("Georgeson") has been retained by PECO Energy Company, a Pennsylvania corporation (the "Company") as Information Agent for the Company's offer to exchange up to 5,400,000 depositary shares, each representing a one-fourth interest in a share of $7.96 Cumulative Preferred Stock of the Company in a transaction pursuant to which participants in the offer will ultimately receive Trust Receipts, each representing a ____% Cumulative Monthly Income Preferred Security, Series B, representing limited partner interests issued by PECO Energy Capital, L.P., a limited partnership formed under the laws of the State of Delaware (the "Offer"). The term of the Agreement shall be for the term of the Offer, including any extensions thereof. 1. During the term of the Agreement, Georgeson will: provide advice and consultation with respect to the planning and execution of the Offer, assist in the preparation and placement of newspaper advertisements, assist in the distribution of the documents relating to the Offer to brokers, banks, nominees, institutional investors and other shareholders and investment community accounts, answer collect telephone inquiries from shareholders (including beneficial holders) and their representatives and if requested, call individuals who are beneficial or registered holders. Georgeson also agrees that it will only communicate or distribute to brokers, banks, nominees, institutional investors and other shareholders (including beneficial holders) and investment community accounts information which is in conformity with the Offering Circular/Prospectus for the Offer, the exhibits thereto or the documents incorporated by reference therein. 2 Page 2 2. The Company will pay Georgeson a fee of $_________, of which half is payable in advance in accordance with the enclosed invoice and the balance thereof at the expiration of the Offer, plus an additional fee to be mutually agreed upon if the Offer is extended more than fifteen days beyond the initial expiration date. Georgeson will also charge an additional fee of _____ for each telephone call received from or made to individuals who are registered holders or NOBO holders. In addition, the Company will reimburse Georgeson for reasonable costs and expenses incurred by Georgeson in fulfilling the Agreement, including but not limited to: expenses incurred by Georgeson in the preparation and placement of newspaper advertisements (including typesetting and space charges), postage and freight charges incurred by Georgeson in the delivery of documents, charges for production of shareholder lists (paper, computer cards, etc.), statistical analyses, mailing labels or other forms of information requested by the Company or its agents and other expenses or disbursements authorized by the Company or its agents, provided that any expenses in an amount over $3,000 shall be approved in advance by the Company. 3. If requested, Georgeson will check, itemize and pay, on behalf of the Company, from funds provided by Georgeson, the charges of brokers and banks for forwarding material relating to the Offer to beneficial owners. To ensure that Georgeson has sufficient funds in the Company's account relating to the Offer to pay these bills promptly, the Company hereby agrees to provide Georgeson, at the time Georgeson completes the initial delivery of this material, with a preliminary payment equal to 75% of the anticipated broker and bank charges for distributing this material. For this service, the Company will pay Georgeson Five dollars and fifty cents ($5.50) for each broker and bank invoice paid by Georgeson. If the Company prefers to pay these bills directly, this provision should be stricken out and initialed by an authorized signatory of the Company and returned to Georgeson. 4. Georgeson hereby agrees not to make any representations or warranties that are not included in the documents relating to the Offer. 3 Page 3 5. The Company agrees to indemnify and hold Georgeson harmless against any loss, damage, expense (including, without limitation, legal and other related fees and expenses), liability or claim arising out of Georgeson's fulfillment of the Agreement (except for any loss, damage, expense, liability or claim arising out of Georgeson's own negligence or misconduct or a breach of this Agreement). At its election, the Company may assume the defense of any such action. Georgeson hereby agrees to advise the Company of any such liability or claim promptly after receipt of any notice thereof. The indemnification contained in this paragraph will survive the term of the Agreement. 6. Georgeson agrees to preserve the confidentiality of all non-public information provided by the Company or its agents for use by Georgeson in providing services under this Agreement and any information developed by Georgeson based upon such non-public information. 7. This Agreement shall be interpreted in accordance with the laws of the Commonwealth of Pennsylvania, without regard to conflict of laws principles. By executing the Agreement below the undersigned agrees to be bound by its terms. Sincerely, GEORGESON & COMPANY INC. By: -------------------------- Name: Title: Date: ACCEPTED: PECO ENERGY COMPANY By: --------------------------- Name: Title: Date: EX-99.7 17 NOTICE OF OFFER TO HOLDERS OF PECO ENERGY CO. 1 Exhibit 99-7 This is neither an offer to exchange or to sell nor a solicitation of an offer to exchange or buy any of these securities. This Offer is made only by the Offering Circular/Prospectus and the related Letter of Transmittal and the Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of these securities in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities or blue sky laws of such jurisdiction. In any jurisdiction where the securities or blue sky laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on behalf of PECO Energy Company by Merrill Lynch & Co. or one or more other brokers or dealers which are licensed under the laws of such jurisdiction. NOTICE OF OFFER TO HOLDERS OF DEPOSITARY SHARES EACH REPRESENTING A ONE-FOURTH INTEREST IN A SHARE OF PECO ENERGY COMPANY OF $7.96 CUMULATIVE PREFERRED STOCK PECO Energy Company, a Pennsylvania corporation ("PECO Energy"), is offering , upon the terms and subject to the conditions set forth in its Offering Circular / Prospectus dated July ___, 1995 (the "Offering Circular / Prospectus") and the accompanying Letter of Transmittal (the "Letter of Transmittal" which, together with the Offering Circular / Prospectus constitute the "Offer"), to effect the exchange of Trust Receipts ("TOPrS" or "Preferred Trust Receipts"), each representing a % Cumulative Monthly Income Preferred Security, Series B, representing a limited partner interest of PECO Energy Capital, L.P., a limited partnership formed under the laws of the State of Delaware ("PECO Energy Capital"), for up to 5,400,000 Depositary Shares (the "Depositary Shares"), each representing a one-fourth interest in a share of $7.96 Cumulative Preferred Stock of PECO Energy. Exchanges will be made on the basis of one Preferred Trust Receipt for each Depositary Share validly tendered and accepted for exchange in the Offer. Depositary Shares validly tendered and not accepted for exchange because of proration will be returned. In connection with the Offer, PECO Energy will issue its ___% Deferrable Interest Subordinated Debentures, Series B ("Series B Subordinated Debentures") which will be delivered to the Exchange Agent (on behalf of the holders of the Depositary Shares) and the Exchange Agent will deposit the Series B Subordinated Debentures with PECO Energy Capital in consideration for PECO Energy Capital issuing the Series B Preferred Securities as set forth in the Offering Circular / Prospectus. THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON ______, 1995 UNLESS EXTENDED. NO RECOMMENDATION TO HOLDERS OF DEPOSITARY SHARES TO TENDER OR REFRAIN FROM TENDERING IN THE OFFER IS MADE BY THE BOARD OF DIRECTORS OF PECO ENERGY, PECO ENERGY, THE GENERAL PARTNER OF PECO ENERGY CAPITAL OR PECO ENERGY CAPITAL. EACH HOLDER OF DEPOSITARY SHARES MUST MAKE ITS OWN DECISION ON WHAT ACTION TO TAKE IN LIGHT OF ITS OWN PARTICULAR CIRCUMSTANCES. Upon the terms and conditions of the Offer, including the provisions relating to proration described in the Offering Circular / Prospectus, PECO Energy will accept for exchange up to 5,400,000 Depositary Shares validly tendered and not withdrawn prior to 12:00 midnight, New York City time on, _______, 1995, or if the Offer is extended by PECO Energy, in its sole discretion, the latest date and time to which the Offer has been extended (the "Expiration Date"). Tenders of Depositary Shares pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless accepted for exchange by PECO Energy, may be withdrawn at any time after 40 business days after _____, 1995. Depositary shares not accepted because of proration will be returned to the tendering holders at PECO Energy's expense as promptly as practicable following the Expiration Date. Subject to the next sentence, PECO Energy expressly reserves the right to extend, amend or modify the terms of the Offer, and not accept for exchange any Depositary Shares, at any time prior to the Expiration Date for any reason, including (without limitation) if holders tender fewer than 2,800,000 Depositary Shares (which condition may be waived by PECO Energy). In addition, acceptance of Depositary Shares validly tendered in the Offer is subject to the condition that there be at least 400 record or beneficial owners of Preferred Trust Receipts to be issued in exchange for Depositary Shares, which condition may not be waived. The purpose of the Offer is to reduce the after-tax financing costs of PECO Energy through the replacement of Depositary Shares with Preferred Trust Receipts. 2 The Offering Circular / Prospectus and Letter of Transmittal contain important information which should be read before any actions are taken by holders of Depositary Shares. Tenders may be made only by a properly completed and executed Letter of Transmittal or Agent's Message (as described in the Offering Circular / Prospectus). PECO Energy will pay to Soliciting Dealers (as defined in the Offering Circular / Prospectus) designated by the registered or beneficial owner, as appropriate, of the Depositary Shares, a solicitation fee of $ per Depositary Share validly tendered and accepted for exchange pursuant to the Offer, subject to certain conditions. Soliciting Dealers are not entitled to a solicitation fee for Depositary Shares beneficially owned by such Soliciting Dealer. The information required to be disclosed by paragraph (d)(1) of Rule 13e-4 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offering Circular / Prospectus and is incorporated herein by reference. The Offering Circular / Prospectus and the related Letter of Transmittal are first being sent to holders of Depositary Shares on ____, 1995 and are being furnished to brokers, dealers, banks and similar persons whose name or whose nominees appear on the lists of holders of the Depositary Shares or , if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Depositary Shares. Any questions or requests for assistance may be directed to the Information Agent and the Dealer Manager at the addresses and telephone numbers set forth below. Requests for copies of the Offering Circular / Prospectus or of the Letter of Transmittal or the Notice of Guaranteed Delivery may be directed to Georgeson & Company, Inc., the Information Agent at (800) 223-2064, and copies will be forwarded promptly at PECO Energy's expense. Shareholders may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Offer. The Information Agent for this Offer is: GEORGESON & COMPANY, INC. Wall Street Plaza New York, New York, 10005 Banks and Brokers Call Collect: (212) 440-9800 or All Others Call Toll Free: (800) 223-2064 The Dealer Manger for the Offer is: MERRILL LYNCH & CO. World Financial Center North Tower New York, New York 10281-1305 Call Collect: (212) 236-4723 July ____, 1995 "TOPrS" is a service mark of Merrill Lynch & Co. EX-99.8 18 PRESS RELEASE 1 Exhibit 99-8 FOR IMMEDIATE RELEASE July 5, 1995 CONTACT: Michael Wood, (215) 841-4125 Carol Rath Gosser, (215) 841-4126 PECO ENERGY COMPANY ANNOUNCES THE FILING OF A REGISTRATION STATEMENT FOR AN OFFER TO EXCHANGE TRUST RECEIPTS ("TOPrS")(SM) PECO Energy Company announced today that it is filing a registration statement for an offer to exchange Trust Receipts ("TOPrS")(SM) each representing a ___% Cumulative Monthly Income Preferred Security, Series B representing a limited partner interest issued by PECO Energy Capital, L.P. for up to 5,400,000 outstanding Depositary Shares each representing a one-fourth interest in a share of $7.96 Cumulative Preferred Stock of PECO Energy Company. Exchanges will be made on the basis of one Trust Receipt for each Depositary Share validly tendered and accepted for exchange in the offer, subject to, among other conditions, at least 2,800,000 Depositary Shares being validly tendered. Any Depositary Shares not accepted for exchange because of proration or otherwise will be returned. PECO Energy Capital, L.P. is a finance subsidiary of PECO Energy which was created solely for the purpose of issuing one or more series of its Preferred Securities constituting limited partner interests. The only assets of PECO Energy Capital are related series of subordinated debentures of PECO Energy issued concurrently with the Preferred Securities. The exchange offer will allow PECO Energy Company to reduce its after-tax financing cost, since interest paid on the Series B Subordinated Debentures is deductible, while dividends paid on the Depositary Shares are not. The dealer manager for the exchange offer is Merrill Lynch & Co. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES WILL BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. TOPrS MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED AND NO EXCHANGE OFFER WILL BE MADE, PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY OR EXCHANGE NOR SHALL THERE BE ANY SALE OF SUCH SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION, SALE OR EXCHANGE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAW OF ANY SUCH STATE. THE EXCHANGE OFFER WILL BE MADE ONLY BY MEANS OF A PROSPECTUS. EX-99.9 19 LETTER TO HOLDERS OF DEPOSITARY SHARES 1 Exhibit 99-9 July __, 1995 To Holders of Depositary Shares, each representing a 1/4 interest in $7.96 Cumulative Preferred Stock of PECO Energy Company PECO Energy Company, a Pennsylvania corporation ("PECO Energy"), proposes, upon the terms and subject to the conditions set forth in the Offering Circular/Prospectus and the accompanying Letter of Transmittal (the "Letter of Transmittal" which, together with this Offering Circular/Prospectus, constitute the "Offer") enclosed herewith, to exchange Trust Receipts, each representing a __________% Cumulative Monthly Income Preferred Security, Series B, representing a limited partner interest issued by PECO Energy Capital, L.P., a limited partnership formed under the laws of the State of Delaware ("PECO Energy Capital"), for up to 5,400,000 depositary shares (the "Depositary Shares"), each representing a one-fourth interest in a share of $7.96 Cumulative Preferred Stock of PECO Energy. Depositary Shares not accepted for exchange because of proration or otherwise will be returned. In connection with the Offer, PECO Energy will deposit with PECO Energy Capital as PECO Energy Capital assets its ________% Deferrable Interest Subordinated Debentures, Series B due 2025. The Offer is explained in detail in the enclosed Offering Circular/Prospectus and Letter of Transmittal. If you want to tender your shares and to participate in the Offer, the instructions for tendering are also set forth in detail in the enclosed materials. I encourage you to read these materials carefully before making any decision with respect to the Offer. No recommendation to any stockholder to tender or to refrain from tendering in the Offer is made by PECO Energy, its board of directors, PECO Energy Capital or its general partner. Very truly yours Corbin A. McNeill, Jr. PECO Energy Company President and Chief Executive -----END PRIVACY-ENHANCED MESSAGE-----